COA cites 2 DENR projects for delay

The slow implementation of two foreign-funded projects of the Department of Environment and Natural Resources (DENR) has resulted in the government paying P10.707 million in commitment fee, the Commission on Audit (COA) revealed.

In its annual audit report of the DENR, the COA found that the Forestland Management Project (FMP) and the Integrated Natural Resources and Environmental Management Project (Inremp), both foreign-assisted projects, reported low physical progress, which caused the government to pay a commitment fee of P10.707 million for 2018.

The FMP, which is funded by the Japan International Cooperation Agency, only posted a 76.15-percent accomplishment rate, vis-à-vis its 98.58-percent target for the end of the year.

38% completed

Meanwhile, the Inremp, funded by the Asian Development Bank, accomplished only 38 percent, compared to its year-end target of 78 percent completion.

Due to the delay in the implementation of the projects, the government was forced to pay a total of P10.707 million in commitment fees, of which P6.927 million went to the Inremp and P3.78 million for the FMP.

According to the report, a commitment fee is paid by a borrower to a bank or lender in exchange for the agreement to grant the loan at a later date.

The fee serves as compensation to the lender in exchange for the lender agreeing to set aside the amount of the loan, instead of utilizing it for other purposes, which could potentially earn income.

Both projects are overseen by the DENR’s Foreign-Assisted and Special Projects Services (FASPS).

In addition to costing the government money, the COA said that the delay also “defeats the project goals of inclusive growth and poverty reduction for the Inremp and integrating conservation and development-oriented activities with full participation and capacitation of local communities for the FMP.”

The COA recommended that the DENR instruct its FASPS office to “conduct periodic reviews to ensure that bottlenecks and issues affecting the project implementation are immediately addressed.”