COA justifies 8 infra projects in Leyte overpriced by P35M

Commission on Audit. (INQUIRER FILE PHOTO)

MANILA, Philippines – The Commission on Audit (COA) has insisted that eight infrastructure projects in Leyte were overpriced by P35.14 million, junking the appeal of a local engineer on a previously issued notice of disallowance (ND).

According to COA’s decision on June 13, the initial disallowances for two projects in 2011 amounting to P2.085 million were affirmed, while the disallowances for six other projects, also implemented in 2011, were reduced from P43.36 million to P33.06 million.

This was after Department of Public Works and Highways (DPWH) Tacloban City District Engineer Arnaldo Bonifacio made an appeal regarding the earlier findings of the  COA Regional Office (RO) 8.

“Premises considered, Commission on Audit Regional Office No. VIII Decision No. 2015-018 dated June 24, 2015 is hereby approved.  Accordingly, Notice of Disallowance (ND) Nos. 11-007-101-(10) and 11-008-101-(10), both dated November 10, 2011, in the total amount of P2,085,557.87 are sustained,” COA’s decision signed by chair Michael Aguinaldo said.

“ND Nos. 11-009-101-(10) to 11-012-101-(10), all dated November 10, 2011, ND No. 11-013-101-(10) dated November 11, 2011, and ND No. 11-014-101-(10) dated November 15, 2011 are likewise sustained but in the reduced amount of P33,061,557.30,” COA added.

COA said the actual contract cost of all projects exceeded their evaluated cost and maximum allowable cost because the DPWH District Office in Tacloban purchased asphalt mixes for P8,500 per ton — significantly higher than the P7,200  price used by the Technical and Information Technology Service (TechITS).

“The contract costs were unreasonable based on the results of the technical evaluation conducted by the Technical and Information Technology Service (TechITS), COA RO No. VIII,” the commission claimed.

Information from state auditors showed that the eight projects were mostly road rehabilitation and asphalt laying projects in Tacloban.  The biggest of the eight were the reblocking of Kilometer 898+092 to 903+000 of Daang Maharlika worth P48.23 million, and the improvement of the Tacloban-Baybay South Road also worth P48.23 million.

These two projects appeared to be the most overpriced, by P9.529 million (Daang Maharlika) and P9.644 million (Tacloban-Baybay South Road).

Other projects include rehabilitation of Burgos Street (P4.829 million, overpriced by P1.316 million); repair of Leyte-Samar Road (P3.713 million, overpriced by P768,756); two rehabilitation and asphalt overlay projects at Tacloban-Baybay South Road (P25.08 million, overpriced by P4.968 million; P33.35 million, overpriced by P5.440 million).

There was also an asphalt overlay project along Justice Romualdez Street (P5.302 million, overpriced by P997,078); and one at Trece Martires Street (P14.46 million, overpriced by P2.481 million).

Bonifacio, in his appeal on June 2012, said that certain factors such as foreign exchange, weather conditions, busy traffic in major roads, and others have contributed to the projects’ higher prices.

“The escalated cost […] was due to the adverse effect of the volatility of market for these products considering that bituminous materials are basically petroleum-based and severely affected by uncertainties in financial matters associated with foreign exchange rate fluctuations, political factors, unstable supply and pricing scales and scarcity,” Bonifacio said.

“The projects were located within urban areas and very busy thoroughfares which severely affected the deployment and mobility of construction workmen and equipment, resulting in increased fuel cost and consumption and the slowing down of works caused by abnormal weather conditions and protracted utilization of heavy equipment increasing equipment rentals,” he added.

However, COA insisted that even with their limits, set at 10 percent of allowable variance, these prices are still excessive.

“Since the contract price is beyond the limit of what was allowed by COA, it is deemed excessive as provided under Item 3.3 of COA Circular No. 85-55-A. This Circular defines excessive expenditure as expenses in excess of reasonable limits,” COA added. /jpv