[] Supplier had tossed Veco bill on CCTO to the City after its refusal to pay balance of the traffic lights project. City Council approved payment of P424,707 to avert shutdown of traffic operations
[] City, contractors have to agree on mutual rescission or risk a protracted, costly lawsuit. Phases 1 of project completed in 2021; phase 2, by February last year. What is there left to rescind?
THE Cebu City Government will rescind the P487.9 million contract on modern traffic lights for the city because that is "not the right traffic system for the city."
That was confirmed by Councilor James Anthony Cuenco, who told the City Council, during its regular session last December 27, 2023, the executive department decided to "rescind" the contract and would not pay the balance. Minority Floor Leader Nestor Archival repeated it for the record: "Dili ta mobayad."
In May 2023, Mayor Michael Rama said he would "cure, correct" lapses in the project. Rescission and not paying the balance is far different from changing terms of the contract to "cure, correct."
[Related: Seares: Mayor Rama to 'cure, correct' lapses in P487.9 million traffic lights project," May 9, 2023]
Cuenco didn't disclose the still unpaid amount but Councilor Archival said that what the City already paid was "around P100 million to P200 million."
A year ago, the City had yet to pay in full the P232 million for Phase 1 and paid only 15 percent for Phase 2's mobilization fund. Phase 1, covering 18 intersections, was completed in 2021 while Phase 2, covering 27 intersections and costing P248 million, was scheduled to be "up and running" by end of February in 2023.
Last May 2023, the contractors claimed 100 percent completion of Phase 1 and 90 percent completion of Phase 2.
HOW MUCH CAN BE RESCINDED? No Sanggunian member at the December 27 session last year spoke out to know the exact state of the project, which the mayor's executive department, as relayed by Cuenco, would "rescind."
The reason could be that the main question then was the payment of overdue electricity bill of the Cebu City Traffic Office, which the suppliers didn't pay, in the amount of more than P400,000.
They could've known how much of the project could be rescinded since it was already or almost completed, how the system could be adapted to the city's requirements without entirely changing it, and what the fumbling in the implementation of the project could cost the City.
The City faces the prospect of a lawsuit unless it can agree with the suppliers on compensation for work done and damages for aborting the contract, wherever the fault lay. Then there's the cost of the mistake. How much more would the City have to spend to replace or improve the system already installed?
The contractors had claimed DEPW or Department of Engineering and Public Works already accepted the project. CCTO, the city's transportation office, backed by the findings of its management committee CCTMCC, did not.
NOT THE RIGHT SYSTEM. Almost a year ago, the contractors/suppliers -- Triune Electronic Systems Inc., a Manila-based supplier, and Cylix Tech CCTV and Smart Surveillance -- had boasted of their system as the most advanced in the world, "even more sophisticated than the one used in Manila." “Only Cebu City has this kind of latest technology,” Timothy Ong of Triune Electronics was quoted by local media on January 23, 2023.
The new facility was intended to replace SCATS or Sydney Coordinated Adaptive Traffic System, which the City has used for the last 35 years.
However, the Cebu City Traffic Management Coordination Committee (CCTMCC) -- after several tests of the installed system and meetings with the suppliers -- formally rejected on March 28, 2023 the suppliers' claim that it was the most modern and most suitable system for the city.
Councilor Cuenco, during the December 27 session, reported that the executive department confirmed that "the present traffic system ... is not satisfactory to our needs." The committee discovered a number of malfunctioning traffic lights, since 2022, despite the system's newness and modernity.
ELECTRICAL COST. The suppliers were to pay for the 2023 electrical cost of the traffic lights system with the installation of CCTV cameras but they could no longer be asked or required to pay as the executive department already decided to dump the contract and not pay the balance.
The issue of unpaid bills, totaling P424,707.98, had briefly bugged the CCTO and City Hall, for not being prompt and good payors, with the clarification made only at the City Council session.
Majority Floor Leader Jocelyn Pesquera told her colleagues there was no need to realign funds for the Veco payment as the account falls under MOOE or maintenance and operating expenses for prior years under the office of the city administrator.