POSTSCRIPT / June 15, 2008 / Sunday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

Share This
Twitter

Who got overprice in SCTEx project?

CLARK FIELD — If you think the cancelled $320-million Chinese government-funded NBN/ZTE deal was one of the most scandalous foreign-assisted projects in recent memory, think again.

Immediately before this was the unfinished multibillion-peso NorthRail project, also Chinese-funded and overseen by the Bases Conversion Development Authority.

And before NorthRail was the Subic-Clark-Tarlac Expressway (SCTEx), another BCDA project funded by a loan from the Japan Bank for International Cooperation that will cost taxpayers a whopping P30 billion upon completion next year.

The SCTEx itself is now hounded by allegations that it was overpriced by more than P5 billion. If this was with the knowledge of the JBIC, project consultants and Filipino officials is still being determined from documents.

* * *

OVERPRICING: We have noted in Postscript that while the SCTEx is supposed to serve Clark, it is unusual that the 93.77-kilometer expressway does not have an interchange, ramp or exit in this former American base turned into an industrial-tourism complex.

The explanation of most people in the know is that the P21.5 billion earlier borrowed for the ambitious expressway had run out, because some well-connected individuals bit off big commissions or payoffs made possible through overpricing.

Sources familiar with the deal said the overprice stemmed from unauthorized design changes, rigged bidding, reduction of works and collusion among some of the parties.

* * *

FUNDS RUN OUT: When the project was drawn up in 2001, the cost of the entire expressway as certified by the BCDA, NEDA-ICC and the Japanese consultant, Pacific Consultants International, was just P15 billion.

That figure grew to P18 billion in 2003 despite reduction of works — the dropping of the interchanges in Porac, Floridablanca and the Friendship Gate in Mabalacat.  But next thing we knew, the figure being whispered was suddenly P21.5 billion!

Like water bring poured into dry lahar, the P21.5 billion sunk into the project still proved to be inadequate even after the removal of the three vital interchanges, including that one in Clark itself.

With this excuse, the proponents now want to get another loan from Japan. How much? First, the proposed new loan was said to be for P7 billion, but lately that figure has grown to P8 billion — for a total project cost of P29.5 billion!

Don’t be surprised if one morning we hear BCDA saying that the ambitious infrastructure would cost at least P30 billion. To keep in step with the rising cost of everything, including graft?

* * *

PACKAGES: In 2005, when the project was bid out, the cost was already P21 billion broken in two packages: Package 1, Subic-Clark (P12 billion); and Package 2, Clark-Tarlac (P9 billion).

Critics said the first overprice occurred at that time allegedly with the consent or knowledge of JBIC and the Japanese government, plus the grudging approval of BCDA.

The NEDA reportedly then pre-approved the two winning general contractors: Kajima-Obayashi-Japan Steel-Mitsubishi (KOJM) Joint Venture for Package 1, and Hazama-Taisei-Nippon Steel (HTN) Joint Venture for Package 2.

They said it was strange that Hazama was allowed to bid despite submitting allegedly fake documents and widespread reports that it was at that time already insolvent, if not bankrupt.

A third bidder, Maeda-Toyo-Ishikawajima–Harima (MTI) Joint Venture, was also allowed to participate, only to lose in both bids but after being rewarded with a certain percentage of the total project cost. That, the critics said, was the second overprice.

* * *

REBIDDING: Because of the substantial variance of the bids from the original contract price, the NEDA-ICC and the Solicitor General recommended the re-bidding of the entire project, a move reportedly approved and ordered by President Gloria Arroyo no less.

For some reason, however, BCDA officials were able to “convince” the President, NEDA, the Solicitior General and the JBIC not to rebid the project and just proceed with the award of the allegedly overpriced contracts.

As work started, change orders amounting to P2 billion were reportedly approved by BCDA management through a certain General Lena, said to be a project manager.

Thus, when the SCTEx had a soft opening last Holy Week, the total cost had already soared to P23 billion — or P8 billion more than the original price.

We were told that the overprice was divvied up by Japanese contractors, some JBIC officials and very important people (VIPs) in and out of government, but we are still awaiting proof.

* * *

STILL UNPAID: What appears to be the unkindest cut of all is the fact that after collecting on 90 percent of its total contract for Package 2, the Hazama-Taisei-Nippon Steel Joint Venture has yet to settle its obligations running into millions.

Among those left holding the empty bag were some Filipino firms who had to content themselves with “bare bones” subcontracts as they kept up with the work schedule of the main contractor.

And to think that HTN, which allegedly has not paid fully its subcontractors, is reportedly angling to get the additional work on the three interchanges and realignments!

As of this writing, HTN reportedly owes local contractors – such as Engineering Equipment Inc., P100 million; and CMC Ravena, P60 million — who have been trying to collect for years.

Lately, First Worldwide Marketing also complained to the BCDA that HTN has been delinquent in its payments.

These firms are just the more vocal complainants. There are many more, such as the Tarlac provincial government which has a claim of P15 million, and counting, for quarrying fees and local taxes.

* * *

(First published in the Philippine STAR of June 15, 2008)

Share your thoughts.

Your email address will not be published.