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Contractor corners P5B Ceza project

/ 01:04 AM February 04, 2014

Port Irene in Cagayan Freeport Sta. Ana, Cagayan. A big-time contractor, who has close personal and business ties to the former chief of staff of Sen. Juan Ponce Enrile and her family, cornered the bulk of P5 billion in state largesse given to the Cagayan Freeport in the last five years. INQUIRER FILE PHOTO

MANILA, Philippines—A big-time contractor, who has close personal and business ties to the former chief of staff of Sen. Juan Ponce Enrile and her family, cornered the bulk of P5 billion in state largesse given to the Cagayan Freeport in Sta. Ana town, Cagayan province, in the last five years.

Alice G. Eduardo, president and chief executive officer of Sta. Elena Construction & Development Corp., has been awarded the 1,000-meter breakwater project under the Port Irene rehabilitation and development program, which costs a total of P5.101 billion, and “is envisioned to improve the economic activities of Cagayan.”

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“There must be something special about that company. Imagine, winning multiple biddings for the single biggest project in a free port controlled by one man since its inception,” Sen. Miriam Defensor-Santiago said when informed by the Inquirer about how a single firm cornered the bulk of the government’s subsidies to Cagayan Economic Zone Authority (Ceza).

Santiago added: “There is basis for the Department of Justice to probe this contract as this could be part of an apparent web of corruption and criminality woven by Senator Enrile.”

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According to Securities and Exchange Commission (SEC) documents compiled by the Inquirer Research team, Eduardo was president of Sta. Fe Builders Dredging & Equipment Corp., whose chair, Neal Jose O. Gonzales, is the brother of Jessica Lucilla “Gigi” Reyes, Enrile’s former chief aide.

Pork scam

Reyes fled the country in August last year after being implicated in the P10-billion pork barrel scam allegedly masterminded by detained businesswoman Janet Lim-Napoles. Whistle-blowers tagged her as one of the senatorial chiefs of staff who facilitated the transfer of their bosses’ pork to bogus nongovernment organizations traced to Napoles.

Reyes’ mother, Gloria O. Cooper, was one of the directors of Sta. Fe Builders, which was formed in December 2011 as a construction firm for buildings, houses and condominiums, roads, plants, bridges, airfields, piers, waterworks and railroads.

The company has the same office address as Eduardo’s Sta. Elena Construction, which was formed in May 2006, and J. Vitangcol Construction at No. 1625 Leon Guinto St., Malate, Manila.

Last December, Santiago revealed that the Ceza, which operates the free port in Enrile’s hometown, received appropriations of up to P5.1 billion from 2008 to 2013 “without any significant contribution to the economy or the national treasury.”

Santiago urged Budget Secretary Florencio Abad to veto the P800 million allocation to Ceza in the 2014 budget because she considered it a “pork barrel” of Enrile similar to the Priority Development Assistance Fund (PDAF), which the Supreme Court declared unconstitutional.

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Indirect partnership

SEC documents showed Eduardo and Reyes having an indirect partnership in a corporation: Sta. Fe Builders was listed among directors and officers of MGNP Inc., a company formed by the Reyes family in 2003, based on SEC papers filed by MGNP in September last year. (Curiously, Sta. Fe Builders was excised from the director’s list of MGNP two months later).

MGNP’s other incorporators include Reyes’ mother and two brothers, Neal and Patrick.

Five months before Eduardo’s Sta. Fe Builders joined MGNP, MGNP amended its articles of incorporation to expand its scope of work from a general investment firm to include construction, retail and wholesale of goods and services, and restaurant and catering, and a change in business address from Reyes’ home at No. 2 Yakan St., La Vista, Quezon City, to No. 2224 Pasong Tamo corner Don Bosco avenues, Makati City.

The Inquirer Research team could not find any records of Sta. Fe Builders and MGNP, as well as Eduardo’s partner firms—J. Vitangcol Construction and FICC—from the SEC database.

Breakwater project

The Port Irene breakwater project is being implemented in five parts: Phase I, worth P840 million, covering 250 meters and completed in 2009; Phase II, with J. Vitangcol Construction Co. (owned by Eduardo’s former husband) worth P1.375 billion, covering 250 meters and finished in 2010.

Phase III, worth P1.079 billion for 200 meters, completed in 2011; Phase IV-A, with Foundation International Construction Corp. (FICC) worth P903.5 million covering 150 meters, completed last year; and Phase IV-B, with FICC and worth P903.5 million, covering 150 meters, expected to be completed this year.

The breakdown showed a wide cost disparity—from P3.36 million per meter in Phase I to P5.4 million in Phases II and III to P6 million per meter in Phases IV-A and B. The contractor attributed the disparity the special requirements of Port Irene, specifically the precast “Jack Stone” blocks weighing almost 20 tons to withstand waves of up to 50 feet spawned by the “amihan” (northwest monsoon)

PPA validation

The Philippine Ports Authority (PPA), upon the request of Ceza, validated the cost and design of the breakwater as “generally reasonable and acceptable with the unit cost per cubic meter in dredging works can be adopted considering that the site is in the extreme northern part of the country and subjected almost every day to extreme weather conditions.”

According to technical evaluation reports for Phases II, III and IV-A of the project, which were obtained by the Inquirer, a Commission on Audit (COA) team led by Grace Bayona reported that the approved budget for the contract (ABC) and the contractor’s bid proposal (CBP) were higher by 4 percent to 7 percent than the agency’s estimated costs.

But the COA considered these “reasonable being within the limit of variance.”

Last October, Ceza released a statement to another newspaper defending the Port Irene project amid allegations that the bidding was rigged to favor one bidder. Ceza claimed the project went through the mandatory prequalification and biddings (with the minimum three participants) in all phases.

Eduardo’s firm

Eduardo has not replied to the Inquirer’s questions on the project sent to her almost a month ago.

According to published reports, Eduardo runs one of the country’s biggest construction firms that built the foundation works for Pagcor Entertainment City, North Luzon Expressway and a slew of SM projects, including Mall of Asia; four power plants, including the First Gen-Siemens San Gabriel Power Plant in Batangas; several interchanges, notably Edsa-Pasay Road-Ayala Avenue and Edsa-Quezon Boulevard; and several bridge and flood-control projects in partnership with Toyo Nippon Steel.

Last December, Eduardo emerged as one of the Filipino partners of Japanese gaming tycoon Kazuo Okada. Her First Paramount Holdings chipped in $8 million for a 24-percent stake in the Manila Bay Resorts casino to partly fill in the void left by Robinson’s Land Corp.’s aborted deal.

Ceza’s creation in 1995 was spearheaded in Congress by then Cagayan Representative Enrile, who drew up its charter giving it the power “to operate … tourism-related activities, including games, amusements, recreational and sports facilities, such as horse-racing, dog racing, gambling casinos, golf courses, and others, under priorities and standards set by Ceza.”

Reyes’ former husband, Rodolfo “Inky” Reyes, was the founding administrator of Ceza.

In a privilege speech, Santiago said Port Irene’s CEO, Jose Mari Ponce, was a relative of Enrile and that Enrile’s representative in Ceza was his son-in-law, American James Kocher, “who, according to former US Ambassador Kristie Kenney, runs an auto import operation in the port, and is suspected of involvement in smuggling.”

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TAGS: contractor, Gigi Reyes, Juan Ponce Enrile, Philippines, Port Irene, Sta. Elena Construction
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