Why we don’t have enough roads: P600 million overpricing of Macapagal section

MANILA, Philippines–Have you ever wondered why Metro Manila has not added enough new roads to ease traffic? One reason: mind-boggling overpricing.

Twelve former executives of the Public Estates Authority (PEA) and a private contractor have been found guilty of padding the cost of a 2.3-kilometer section of the 5.1-km asphalt road that then President Gloria Macapagal-Arroyo named after her late father.

In a briefing, Assistant Ombudsman reported that the Sandiganbayan released on Thursday its promulgation order that found former PEA directors guilty beyond reasonable doubt of awarding a bloated contract to Jesusito Legaspi for the construction of the President Diosdado Macapagal Highway in Pasay and Parañaque.

Legaspi is the owner of JD Legaspi Construction, which jacked up the price of the project from P731.44 million to P1.1 billion. He was found to have received a P837-million windfall from the project.

Rafanan said the Sandiganbayan punished the PEA board members with imprisonment from a minimum of 6 years and 1 month to a maximum of 8 years, including perpetual disqualification from office.

Those found guilty were ordered to jointly or separately reimburse the government the cost of the improper contract-price adjustment and the cost of seaside drive extension totaling P100,016,794.74, according to Rafanan.

“The court found the PEA board (guilty) of implementing (the project) through simplified bidding despite lack of funds (of JD Legaspi) and approved variation orders for contract price adjustment and final bill of quantities, without the required presidential approval, which has resulted in overpriced payments,” Rafanan said.

The case was filed by the Office of the Ombudsman in 2003, a year before the PEA was abolished and its functions transferred to the Philippine Reclamation Authority and the Department of Finance.

“This is one development the office welcomes,” Rafanan said.

The PEA board of directors found guilty of violating Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act, were Manuel Virina Jr., Jaime Millan, Bernardo Viray, Theron Victor Lacson, Rafael Pocholo Zorilla, Cristina Mortel, Frisco Francisco San Juan, Carmelita de Leon Chan, Daniel Dayang, Salvador Malvarosa, Leo Padilla and Elpidio Damaso.

What went before

 

The construction of the President Diosdado Macapagal Boulevard started in 2000 and was completed on April 5, 2002.

In September 2002, the Inquirer published a series of exposés on the alleged overpricing of the P1.1-billion highway, a 5.1-kilometer asphalt road at the Manila Bay reclamation area running parallel to Roxas Boulevard.

It was allegedly overpriced by P600 million, according to Sulficio O. Tagud Jr., a director of the Public Estates Authority (PEA), a government agency that served primarily as the clearing house for all reclamation projects in the country.

The road was built by three firms—Jesusito D. Legaspi Construction (JDLC), Shoemart Inc. (SM) and DM Wenceslao Consortium.

Tagud said SM built 1,426 meters of road and a 100-meter bridge at P132.4 million, which was less than the cost estimate of P264.3 million.

DM Wenceslao built 1,186 meters of road and a 55-meter bridge at P164.7 million, also below the cost estimate of P186.9 million. JDLC, he said, built 2,313 meters of road and a 42-meter bridge “with payments made, and still counting, at a staggering amount of P837.3 million. The original cost estimate was P292 million.

On Nov. 30, 2002, President Gloria Macapagal-Arroyo ordered the abolition of the PEA.

On June 5, 2003, the Office of the Ombudsman approved the filing of graft charges against 20 officials of the PEA, six from the Commission on Audit (COA) and the president of JDLC. The respondents from the PEA included members of its board of directors during the Estrada and Macapagal administrations.

Respondents from the Estrada-appointed board were led by then PEA Chair Francisco San Juan, with Carlos Doble, Carmelita de Leon, Daniel Dayan, Salvador Malbarosa, Leo Padilla and Elpidio Damaso.

Respondents from the Macapagal-appointed board were then Chair Ernest Villareal, Benjamin Cariño, Joemari Gerochi, Angelito Villanueva, Martin Sanciego Jr., Rodolfo Tuazon (a former Western Samar congressman), Ernesto Enriquez, Jaime Millan, Manuel Beriña, Bernardo Viray, Theron Victor Lacson, Raphael Pocholo Zorilla and Cristina Amposta Mortel.

Manuela de la Paz, Arturo Layug, Benilda Mendoza, Epifanio Pureza, Jose G. Capistrano and Ma. Cecilia de la Rama were the respondents from the COA.

Jesusito D. Legaspi is the only private respondent in the complaint.

On Jan. 12, 2005, the Supreme Court paved the way for the prosecution of Doble, a former PEA general manager, when the tribunal’s Second Division upheld the Sandiganbayan’s decision to deny Doble’s motion to quash the information filed against him before the Sandiganbayan.

When the trial in the antigraft court started on Jan. 21, 2005, PEA executives accused in the case pleaded not guilty.–With a report from, Gil C. Cabacungan, Inquirer Research