* The Cebu City Government paid P118.66 million for the P149.99-million Pardo-Toong Road phase, which COA reports is stuck at 75.42 percent completion and unlikely to be finished.
* State auditors cited massive delays, unauthorized earthmoving without permits, flawed environmental clearances, and procurement deficiencies where the winning contractor failed to meet key personnel requirements.
* COA recommended contract termination, tighter internal controls, and the refund of a P5.53 million mobilization overpayment if the project is officially canceled.
THE Cebu City Government has disbursed P118.66 million for the first phase of the Pardo-Toong Road, a project that state auditors report is largely suspended and unlikely to be finished.
Designed to provide a shorter alternative route to the Transcentral Highway and bypass heavy traffic in Barangay Lahug, the P149.99-million design-and-build contract was awarded in early 2021. However, an inspection by the Commission on Audit (COA) in March 2026 found the project stuck at 75.42 percent completion, with the City’s engineering department stating the construction could no longer be pursued.
Work without permits and mounting delays
The road project was initially supposed to be completed by July 2022, exactly 480 days after the contract was signed. Instead, work suspensions added 1,129 days to the timeline, pushing the revised target completion date to August 2025.
State auditors attributed these lengthy delays largely to the contractor. A review of the project’s timeline showed that the firm began civil works in February 2021, weeks before the contract was officially signed or a Notice to Proceed was issued. The contractor also started moving earth before securing necessary permits, clearances and approved design plans.
Because the contractor proceeded without proper authorization, Barangay Poblacion Pardo and the Environmental Management Bureau (EMB) issued violation notices and a cease and desist order later that year. The environmental agency noted that the project was situated on a critical slope and lacked a signed site development plan, requiring an engineering study to mitigate potential hazards.
Environmental concerns and unauthorized earthmoving
Despite the formal suspension orders, the contractor continued excavating the site without supervision or monitoring from the City’s Department of Engineering and Public Works (DEPW).
By early 2022, city inspectors reported that the massive volume of excavated earth made the site look more like a quarry than a road project. The unmonitored earthmoving had altered the terrain so drastically that city planners could no longer determine the exact proposed alignment of the road.
Auditors also questioned the project’s environmental documentation. The contractor secured a Certificate of Non-Coverage, a simpler environmental clearance permitted for road projects shorter than two kilometers. The first phase of the Pardo-Toong project measured 1.85 kilometers, fitting just under this limit. However, COA pointed out that the entire planned route spans multiple phases and well exceeds two kilometers. Auditors noted the project should have undergone a full environmental impact study to secure a more rigorous Environmental Compliance Certificate.
Disputed payments and bidding deficiencies
The state audit traced the project’s complications back to the procurement stage, where the winning contractor’s eligibility was questioned. Bidding rules required the firm to have 15 key personnel to fill 14 technical positions. The contractor listed only five people, assigned multiple roles to single individuals and entirely omitted a mandatory resettlement specialist.
Auditors noted that these deficiencies should have immediately disqualified the firm during the post-qualification review, adding that allowing the company to proceed undermined transparency in government procurement.
By December 2023, the DEPW had recommended terminating the contract due to the contractor’s failure to meet deliverables. A formal notice was sent requiring the firm to explain why the project should not be canceled, but city records show no response was ever filed.
Despite this pending termination recommendation, construction mysteriously resumed in September 2024. Following this resumption, the City released partial payments of P65.79 million and P30.36 million in 2025. These disbursements, combined with a P22.49-million mobilization fee paid at the start of the project, brought the City’s total spending to P118.66 million.
Financial recovery and next steps
The state audit body has flagged a possible overpayment of P5.53 million. This figure represents the unrecovered portion of the initial 15 percent mobilization fee — an advance payment given to contractors to start work — compared to the actual value of the 75.42 percent completed so far.
“In the event that the project will be formally terminated at its current state, the overpaid amount of P5,530,803.07 should be refunded by the contractor,” COA said.
Auditors have formally recommended that the City Government reactivate its contract termination committee, assess whether the City can take over the unfinished project and tighten internal controls to prevent unauthorized construction in the future. The City has also been asked to justify releasing the 2025 payments despite the project’s earlier termination recommendation.
In response to the findings, the chairperson of the bids and awards committee stated she was not part of the 2021 procurement team and could not alter those past proceedings. Meanwhile, the acting city engineer assured auditors during an exit conference that project engineers are currently drafting written justifications to address the audit findings. / DPC