STATE auditors have uncovered significant financial losses, contractual violations and unauthorized operations in Cebu City’s joint venture agreement (JVA) with Tokagawa Global Corp. (TGC) for its on-street parking system, according to the 2024 audit report.
The Commission on Audit (COA) report on the Cebu City Government revealed that the partnership, intended to modernize parking management, resulted in millions of pesos in reduced revenue. TGC also operated hundreds of parking slots without legal authority.
A major discrepancy was found between the number of parking slots specified in the JVA and the actual number operated.
In the renewed 2022 JVA, the total number of parking slots increased to 2,667 from 1,362. However, COA reported only 2,640 slots. The number of streets assigned to TGC also rose to 38 from 23.
While the JVA listed 2,667 slots, a COA inspection team found 470 slots that were not declared in the agreement. These slots were located along Arellano Blvd., Fugosa Extension St., R. Palma St. and G. Gaisano St., and were operated by TGC without authority.
No documents were provided to prove TGC’s authority to collect fees in these areas. COA also noted that these streets had not previously been managed for parking by the Cebu City Transportation Office (CCTO).
The audit further found that the renewed JVA negatively affected the city’s financial standing.
Annual revenue reduction
The partnership caused an annual reduction in parking revenue of P19,127,135.02 and an increase in related expenses of P1,260,013.44.
Under the current 2022-2024 JVA, the City recorded an annual net loss of P11,846,170.26, compared to P4,689,780.59 from 2019 to 2021.
In contrast, the earlier JVA from 2016 to 2018 generated a net income of P8,540,978.20.
Before any venture with TGC, the CCTO’s average annual pay parking revenue was P34,556,135.83.
COA also cited a failure in governance and oversight. An Oversight Committee mandated to monitor income and operations was formed nine months late.
The JVA required its creation by June 20, 2024, but members were appointed only on March 12, 2025.
This delay contributed to unresolved issues, including the conversion of four-wheeled vehicle slots into motorcycle slots without City approval.
The report also listed material contractual infractions by TGC, including its refusal to submit required records.
If uncorrected, these issues could be grounds for a Second Party Event of Default and the pre-termination of the agreement.
In its reply, the Cebu City Legal Office said a proposal to amend the JVA was submitted on April 7, 2025. (EHP)