The Commission on Audit reported that the Cebu City Medical Center remains unfinished after a decade, with only P1.13 billion of the P1.904 billion project budget utilized and multiple phases incomplete.
Auditors attributed the delays to inadequate engineering, frequent design revisions, and the termination of contracts for Phases 3 and 4 due to poor contractor performance and failure to meet requirements.
The city failed to provide key engineering records for P897.34 million worth of project components, leading auditors to demand justification for extended suspensions and the recovery of validated overpayments.
MORE than a decade after construction began, the new Cebu City Medical Center remains unfinished, hampered by years of design changes, engineering deficiencies, and weak project management. A recent Commission on Audit report revealed that despite the Cebu City Government spending P1.13 billion on the flagship public hospital, long-standing issues have paralyzed one of the City’s largest infrastructure projects.
The new medical facility was intended to replace the old city hospital, which sustained severe damage during the 2013 Central Visayas earthquake and was demolished the following year. It was envisioned to expand access to healthcare for Cebu City residents. However, more than 10 years later, the project is marred by delays and a series of incomplete phases.
Cost and construction roadblocks
The hospital project consists of five infrastructure contracts with a combined value of P1.904 billion. By the end of 2025, the City had disbursed P1.13 billion, but only the first phase had been completed. The remaining phases are still unfinished. State auditors attributed the delays to inadequate detailed engineering before construction began, repeated design revisions and numerous variation and suspension orders.
Significant changes made after construction had already started contributed heavily to the prolonged timeline. The hospital building was reduced from 10 stories to six. Facilities were redesigned to meet revised operational requirements, electrical and generator systems were modified and builders had to address unforeseen underground structures discovered during excavation. Each revision required additional design work, contract modifications and work suspensions.
Terminated and unresolved contracts
The management of individual project phases illustrates the broader administrative bottlenecks. Phase 3, originally scheduled for completion in 150 days, was extended to 1,034 days through a series of suspension and variation orders. Auditors questioned one specific suspension order that granted 574 additional days, noting the City failed to provide sufficient documentation to justify such a lengthy extension.
While accounting records showed this third phase was nearly 92 percent complete by April 2023, the Department of Engineering and Public Works later reported the contract could no longer be finished. This phase also carries a possible P1.22-million overpayment from an unrecouped mobilization fee, which auditors say must be recovered if the contract is formally terminated.
Meanwhile, Phase 4 was mutually terminated in January 2023 before major structural work could even begin. At the time work stopped late the previous year, less than 20 percent of the project was complete, and the contractor had fallen significantly behind schedule. The City’s Contract Termination Review Committee found that the contractor failed to comply with project instructions and lacked the minimum required equipment at the site.
Engineering flaws and missing documents
Beyond administrative delays, the audit uncovered construction defects pointing to poor site investigation and quality control. Structural components did not match approved plans, while plumbing and electrical installations had to be relocated. Certain room layouts required demolition and reconstruction. By the end of 2025, air-conditioning and mechanical systems remained incomplete or nonfunctional and several systems had not undergone required testing before turnover.
Evaluating the full extent of the project’s financial and structural status has also proven difficult. Between May 2025 and March 2026, the engineering department failed to submit key records — such as approved plans, detailed cost estimates and accomplishment reports — for portions of the project totaling P897.34 million. Without these documents, auditors could not determine if the costs and payments were reasonable, raising the risk of irregularities and the possible loss of public funds.
Audit directives and required reforms
To address the findings, state auditors directed the Cebu City Government to submit all missing engineering records, justify the lengthy suspension orders, recover validated overpayments and explain why completed systems remained nonfunctional. During an exit conference on April 8, 2026, the acting city engineer acknowledged the findings and stated that the required explanations and supporting documents would be submitted to the project engineers.
The Commission on Audit also recommended broader reforms for future infrastructure projects, urging the City to bid out only implementation-ready projects, conduct thorough site validations and strengthen the technical capacity of its engineering department.
The audit did not provide a revised completion timeline for the new medical center. Whether construction can move forward, and when the hospital can finally open, will depend entirely on how the City resolves the unfinished contracts and addresses the years of planning deficiencies and weak oversight that have defined the project so far. / MVG, JGS