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Friday, March 16, 2007
Lamp's import papers show huge overpricing
By Karlon N. Rama
CEBU CITY -- Importation papers prepared for the two companies that supplied the Asean summit lampposts tend to confirm what graft investigators are trying to establish: there was massive overpricing in the multimillion-peso purchase.
Acting Deputy Ombudsman Virginia Santiago will leave for Manila Friday to meet with Tanodbayan Merceditas Gutierrez on the controversy, which has spoiled the otherwise successful hosting of the Southeast Asian leaders' summit in Cebu last January.
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Santiago will seek the issuance of an order directing the Department of Public Works and Highways (DPWH) and the Department of Budget and Management (DBM) to immediately stop payment of what remains of the first, plus the entire amount of the second contract.
Based on the commercial invoice prepared by Zhongshan Guzhen Yongan Street Lamp Factory in Guangdong, China, for the Gampik Construction and Development Inc., the 1,046 decorative park lamps they sent to the Port of Cebu only cost RMB234,304 (Chinese yuan renminbi).
These are the ones commonly seen in Cebu City and Lapu-Lapu.
Likewise, based on the invoice prepared by Valmont Industries (China) Ltd. for the Fabmik Construction and Equipment Co., the 730 lampposts they sent to Cebu--the single, double and triple-arm models-only cost $295,529.
These are the ones found in Mandaue City.
Huge gaps
Based on Thursday's foreign exchange rate, one RMB is equal to P6.30. So, the 1,046 lampposts obtained from Gampik cost a total P1,476,115 excluding installation, or P1,411 each.
According to its contract with the DPWH, the government is paying P85,000 per unit, inclusive of installation cost.
Using an exchange rate of P49 to a US dollar, the 730 single, double and triple-arm units supplied to Fabmik only cost a total of P14,480,921, excluding installation.
The individual cost varies.
Based on the document, the six-meter single-arm posts cost $36 or P1,764 each, while the nine-meter double and triple-arm posts cost $41 and $74 each, or P2,009 and P3,626, respectively.
But according to the contract between DPWH and Fabmik, the single, double and triple-arm units each cost P314,698.33, P325,916.69 and P350,090.48, inclusive of installation.
As this developed, DPWH officials Thursday corrected reports that the suppliers of the allegedly overpriced lampposts already got paid the entire amount.
P18M to save
In an emergency conference with Santiago Thursday afternoon, they said the government can still withhold about P18 million of the P120-million contract.
The amount, said DPWH Assistant Director Marlina Alvizo, corresponds to the 15 percent balance of the last progress billing.
The anti-graft office organized the emergency conference a day after Santiago met with DBM Central Visayas Director Carmela Fernan.
Fernan earlier said they have already released money to the contractor and that the only money with them is the P3.1 million retention fee that, in turn, has become due and demandable.
But Alvizo, in an interview, clarified that the amount released so far only corresponded to 85 percent of the project cost.
The remaining 15 percent cannot be released until the lampposts get turned over to and are accepted by the city governments of Cebu, Lapu-Lapu and Mandaue, she revealed.
Moreover, there is a second contract of supply and the government can withhold full payment for it.
"We have not paid anything for these lampposts although they have already been installed," she said of the second contract.
Larger
The first contract covered the supply and installation of 360 lampposts for Cebu City and 389 for Mandaue, said Alvizo.
In Cebu City, only those distinguishable by its hat-like top were put up for, Alvizo estimated, a little over P30 million.
At least 300 of the same model were installed in Mandaue City for a bit over P25 million but an additional 89 units, those identifiable because of its round head, were also put up for close to P20 million.
Over that, the contractor also put up 140 streetlamp units-those identified as single, double and triple-arm sets-for P44.89 million.
The second contract is larger than the first, Alvizo said.
The second contract covers the supply of lampposts already installed in Lapu-Lapu City.
It includes the 40 lampposts they installed inside the Porto Fino beach resort and which, DPWH Legal Officer Agustinito Hermoso said, the agency is going to start taking down.
He confirmed that it was they who caused the installation in the private resort, but explained that they were merely obeying a directive from then DPWH secretary Hermogenes Ebdane.
"I don't have the figures right now but it is larger than P120 million," Alvizo said of the second contract.
Divided
Two separate contracts covered the lamppost supply and Alvizo admitted that they halved the purchase because only half the funds were available at the time of the award.
It isn't clear if the Tanodbayan possesses the authority to stop payment for an existing contract, but Santiago said this has happened once during the term of her former boss, Simeon Marcelo.
"We will endorse to the DBM any directive your office will issue to us," Hermoso assured Santiago during Thursday's conference.
Meanwhile, even if it will cost the Cebu City Government some P4 million in electricity consumption every year, Mayor Tomas Osmeña will still accept all 640 street lamps from DPWH.
Osmeña is even willing to repair the damaged lampposts and replace busted lights at the expense of City Hall.
The mayor said he will do so to help the hotels in the city, where most of the lamps have been installed.
"I generally agreed to accept them because it's foolish to pull these out of the street unless they're willing to pay the government back. The main consideration there is I want to help our hotels," he told a news conference Thursday.
P3.9M a year
The lamps, he said, help make the streets look nice and help show tourists the way to the hotels that are located along the Asean summit ceremonial route.
Based on City Planning Officer Nigel Paul Villarete's computation, a 12-hour use of each lamp a day will cost the City P513 in electricity consumption a month.
The City will have to spend P328,320 a month or P3.9 million a year for the electricity consumption for all 640 lamps installed in the city.
Osmeña said he will keep the lamps to make hotel owners happy, specifically the owners of Marco Polo Hotel.
"He spent so much to reopen Cebu Plaza Hotel so anything that will make it nice to go their hotel, sige na lang. Anyway they pay real estate taxes. Their business taxes will help us pay for the electricity," he said.
Since some of the fluorescent lights are already busted and some posts have been damaged, Osmeña said the City will have to repair them.
But he wants the lamps changed all at once so the Department of Public Services personnel and trucks will not have to replace the lamps every time one gets busted.
"We might have to change everything at once because it will be expensive to go back every day to fix one bulb. We can have it contracted out," Osmeña added. (With Linette C. Ramos of Sun.Star Cebu)
For more Philippine news, visit Sun.Star Cagayan de Oro. (March 16, 2007 issue)
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