Monday July 23, 2018

COA calls out Talisay City over ‘irregular’ contract

THE Commission on Audit has called the attention of the Talisay City Government after it entered into a lease agreement with a shipping firm for the development of a roro port without bidding documents.

In their 2016 annual audit report, state auditors said that the city government, during the time of former Mayor Johnny De los Reyes, entered into a contract with the Asian Marine Transport Corp. (AMTC) to lease the Talisay City Fish Port and Talisay City Roro Port.

The two ports are situated in a 2.4-hectare lot owned by the city in Barangay San Roque.

But state auditors found the contract of lease signed by both parties was irregular because of the absence of some documents such as the Invitation to Bid, Sealed Bids, Minutes of Bids and Awards Committee (BAC) meetings, and others that would indicate the city’s compliance with Section 198 of COA Circular 92-386.

State auditors also found out that the City’s fish and roro ports had been unoperational for almost 13 years after the City failed to secure the authority from the Philippine Fisheries Development Authority (PFDA) and the Cebu Ports Authority (CPA), delaying the use of the facilities.

The facilities were built to increase economic activities and development in the City.

They recommended, among others, to rescind the contract between the City and AMTC.

Initial verification of the lease contract and other documents also revealed some lapses, which state auditors found to be disadvantageous to the City.

These include the absence of authority from PFDA to lease the fish port and from the CPA for the roro port.

State auditors also found that some of the conditions stated in the contract lease were also disadvantageous to the City.

One of the conditions in which AMTC will pay a monthly rental fee of P800,000 to the City can only start if the Cebu Ports Authority will issue a permit to the lessee to operate.

But the Cebu Ports Authority earlier questioned the deal between de los Reyes and AMTC, saying it entered into contract lease without their approval.

Another condition, in which the City can decide to directly or indirectly sublease, assign or transfer its right of lease over the ports’ premises was also questioned.

“Considering that the lessor cannot lease the RoRo Port because it belongs to the CPA, it follows then that for the same reason, the City cannot allow the Lessee to sub-lease the property,” the report states.

State auditors recommended to the City to instruct the BAC and members of the City Council to explain the non-compliance to the rules and regulations in the conduct of bidding on lease of lands, buildings and other physical structures of the City.

They also recommended to the City to revisit its lease contract between AMTC and if necessary, have it rescinded.

During their exit conference, the City government led by Mayor Eduardo Gullas told state auditors that they are reviewing the contract of lease and plans to take legal action on the matter.

The deal between de los Reyes and AMTC became controversial when the shipping firm’s owner, Paul Rodriguez, tore the P9.6M check he prepared as advance payment when the former mayor failed to show up during the signing of the contract lease.

Then City lawyer Alfredo Sipalay, in an interview, said that de los Reyes failed to appear during the meeting because he wanted some changes in the contract, particularly on the monthly rental.

Hours after Rodriguez tore the check, the contract of lease was eventually signed after both parties were able to reach an agreement. (JKV)