EXPLAINER: NBI is probing possible fraud on garbage service, which costs Cebu City P348M-P400M a year. City Council suspects overpayment. COA finds flaws in weighing tons of trash. City Hall has to correct defects of a system where contractors may be overpaid or illegally paid.

CEBU. (Clockwise) Commission on Audit seal, former DPS chief Jigo Dacua, National Bureau of Investigation seal, and some of Cebu City's garbage trucks. (Contributed photos/File)
CEBU. (Clockwise) Commission on Audit seal, former DPS chief Jigo Dacua, National Bureau of Investigation seal, and some of Cebu City's garbage trucks. (Contributed photos/File)

NBI INQUIRY, COA FINDING. Two developments that lend more significance and urgency to the garbage collection problem in Cebu City, topped by possible waste or theft of public funds:

[1] The National Bureau of Investigation (NBI) regional office -- through Mayor Mike Rama who earlier called it a case of “alleged plunder” – said Tuesday, August 2 it will disclose soon the result of its investigation on the suspected overpayment for the service of Docast Construction Co. and JJ & J Construction and General Supply in collecting garbage in the City for year 2021.

It’s about time, as NBI was asked more than a year ago yet by the City Council, prodded by the minority Bando Osmeña–Pundok Kauswagan (BOPK) and Mike Rama, as acting mayor and then as full-fledged mayor after mayor Edgardo Labella’s death. Rama had written two letters (June 28 and July 26, 2021) demanding explanation for Docast and JJ & J to explain their failure to meet the requirements under a P420 million purchase order from the City.

[2] In its audit on Cebu City for 2021, the Commission on Audit (COA) noted lapses and omissions in weighing the tons of garbage collected by the Docast-JJ & J joint venture. That, on top of COA’s tentative findings that the two companies were ineligible for the P383-million contract as they were a construction company and rules on procurement were violated.

WHO’S DOING THE COLLECTING. SunStar Explainer asked sources if Docast and JJ & J were still collecting the city’s garbage as they had done since January 2021.

Councilor Joel Garganera’s answer last July 23: “I believe it’s the City na, directly dumping in Binaliw.” A lawyer who has direct knowledge of operations at the landfill said Wednesday, August 3: “Since January up to now, the City and barangay garbage trucks are the ones collecting the basura. Direct billing on disposed gargage through PO or purchase order.” The landfill is owned and managed by ARN Central Waste Management Inc.

If there are others helping, that’s not known but what was clear was that no single contractor such as the Docast-JJ & J joint venture has yet bagged the multimillion-peso contract or PO.

PAYING TWICE. The discovery about the system of payment leads to the bigger implication: Apparently, the City can do the garbage collection by itself, by (a) fully using its present resources on vehicles and workers from Department of Public Services (DPS) and the barangays and (b) improving their own agencies’ capacity to collect with better equipment and more personnel.

A stunning disclosure at Sanggunian discussions last year was that Docast and JJ & J were paid the full amount billed, which included the services of DPS and the barangays.

RELATED: EXPLAINER: Councilors suspect volume of garbage collected was bloated, Cebu City paid contractor Docast/JJ and J millions more than it should have. Sanggunian pushes inquiry.

Fried in its own lard (“gigisal sa kaugalingong mantika”), in the Cebuano idiom, means the City bears the cost twice: using its resources to do a big part of the job for which it also pays the garbage contractor to do.

The Sanggunian also found disturbing, in August 2021 sessions leading to its request for NBI and ombudsman inquiry, the increase in tonnage of trash collected from 360 tons daily in the first few months of that year to 1,000 or more tons daily. Were the figures bloated? was the persistent question.

THE HUGE EXPENSE. The public was given some idea on the cost of collecting garbage when Atty. John Jigo Dacua, then DPS chief, last March 16 said the City spent a total of P2.1 billion from 2017 until the first quarter of 2022, spread thus: 2017, P348 million; 2018, P361.6 million; 2019, P366.2 million; 2020, P381 million; 2021, P404 million; and 2022, from January to mid-march, P300 million.

The amounts also paid for truck rentals, tipping fees and salaries of garbage truck drivers and loaders, Dacua said.

Here’s the layer of expenses: Per ton, the City pays for the private hauler that collects the garbage from households to the transfer station, the City pays for the private haulers that collect the garbage from the transfer station to the landfill, and the City pays as “tipping fee” the landfill owner for accepting the garbage.

WHERE IT GOT COMPLICATED. Cebu City’s 2021 experience on garbage collection became complicated when the mode of payment was “streamlined”: namely, it would pay only to Docast and JJ & J. So the joint venture partners allegedly got the whole payment, even for trash collected by City Hall’s DPS and each barangay’s collection service.

Another source of confusion and suspicion was the weighing procedure. COA said the prescribed rules were not followed, thus raising suspicion that records submitted to the city treasurer’s office for payment might not be truthful.

The system of payment and overlapping or duplication of services without correctly identifying the provider of each service by tight monitoring and record keeping might be blamed.

Or plain corruption, which manages to invent ways to make leakage of public funds possible.

PROS, CONS. It’s often said that the City Government is not an efficient manager of equipment and work force to provide service in a massive scale, such as garbage collection and disposal. Government is not reputed for efficiency. Corporate outfits usually do the job better.

Yet even if the job is contracted by a private group, public funds can still be wasted by terms that favor the contractor or allow waste or thievery. That’s what the Sanggunian suspects in the 2021 garbage collection service.

There are advantages as well as downsides in both systems.

MORE THAN THIS. Either way, the situation has to be studied thoroughly, including the “integrated” payment system, which a DPS official at a July 23, 2021 Sanggunian budget hearing called “bale tanan sa Docast.” Why nor -- then councilor, now Representative Edu Rama advocated at the time -- cut up the contract, “chop chop”?

Even if the NBI and COA could identify the loopholes, if not the culprits, the fixing of the problem would need more than the cursory look the City Council gives a problem and more than the reactive but fleeing attention of the mayor’s office.


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