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Monday, January 09, 2006
Agency told to pay firm P18.6M for cemetery completion
THE Court of Appeals (CA) has ordered the government-controlled Public Estates Authority (PEA) to pay a private construction firm with P18.6 million representing unpaid balance for the finishing point of a proposed world-class memorial park in the demilitarized portion of the Fort Bonifacio in Taguig City.
Associate Justice Portia Alino-Hormachuelos of the CA's Sixth Division also ordered PEA to reimburse private contractor Romago Inc. with P8.9 million in actual damages, reducing the computed damages made by the Construction Industry Arbitration Commission (Ciac).
Aside from PEA, its partner Heritage Park Management Corporation (HPMC) was also held liable to paying Romago the awarded amount for the completion of the Heritage Park project.
The appellate court lowered the damages accounted for by Ciac from P22.2 million to P18.6 million for the total contract price of P109 million, wherein Romago was able to accomplish only 96.15 percent of the contract, equivalent to P105 million.
"PEA cannot evade its liability to Romago by invoking the PFTA (Pool Formation Trust Agreement) since Romago is not a party to the PFTA. PEA as debtor cannot claim that its obligations had been assumed by HPMC since there is no showing that Romago ever consented thereto," the CA ruled.
Ciac, in its Oct. 20, 2004 decision, granted claims for damages of Romago from PEA and HPMC amounting to P16.2 million, representing P15.3 million actual damages, including additional interests from Feb. 1 to Aug. 31, 2004 of P534,800 and the P395,608 cost of arbitration.
The CA gave weight on the PFTA signed by the parties PEA, Philippine National Bank (PNB) and the Bases Conversion Development Authority (BCDA) as project manager, financier and owner, respectively, wherein under Section 2.03 of the agreement, it states that it is the responsibility of PEA to undertake squatter relocation.
"Hence, PEA cannot deny liability, but we agree that it cannot be held liable for interests reckoned from the date of reduction of the area to be worked on. Apart from the fact that no demand for payment was made to PEA by Romago, Ciac failed to give any legal justification for awarding the same," the CA said.
Of the total contract price of P109 million, Romago accomplished 96.15 percent amounting to P105 million. Since PEA paid P82.9 million, the difference of P22.2 million should be paid to Romago, the CA ruled.
But the CA said after computing payments, it was found out that amount PEA actually paid was P86.5 million, leaving only a difference of P18.6 million. (ECV/Sunnex)
(January 9, 2006 issue)
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