Firm disputes ‘windfall’ report on Macapagal Boulevard

MANILA, Philippines–It’s not a “road to perdition,” the contractor claims, but a pathway to redemption from traffic gridlock on the controversial boulevard that former President Gloria Macapagal-Arroyo named after her father.

“Stories of the supposed P837-million ‘windfall’ are not true,” JD Legaspi Construction (JDLC) said of the Inquirer report on Friday, based on a news briefing given by Assistant Ombudsman Asyrman Rafanan.

Rafanan reportedly announced that the Sandiganbayan had released a decision finding 12 former executives of the Public Estates Authority (PEA) and JDLC owner Jesusito Legaspi, an engineer, guilty of “padding” the cost of a 2.3-kilometer section of the 5.1-km President Diosdado Macapagal Boulevard (PDMB).

Enrico B. Garcia, JDLC chief operating officer, pointed out in a press statement on Sunday that the decision concerned “procedural lapses” and that the antigraft court upheld the finding by the Commission on Audit (COA) in a special audit that “the total project cost, including price adjustments, is reasonable and, therefore, not overpriced.”

“The project was constructed in accordance with approved design, scope of work and as-built plans and specifications. The audit team, therefore, finds no sufficient basis to support the allegation of overpricing,” said the Sandiganbayan decision, which quoted the COA special audit report.

The court said, “By sheer number of evidentiary exhibits, documentary and object evidence presented by the defense, it would appear that there is substantial basis to arrive at a conclusion that the Legaspi segment of the PDMB project was differently situated and was constructed using materials markedly different [from] that of SM and R-l consortium segments.”

Five contractors worked on the project, including SM and R-1 and Legaspi’s firm.

“Contractor implemented the project according to the requirements for the reclaimed area. Stories of the supposed P837-million windfall are not true because the COA found that contractor gained only reasonable profit that had been well within the limits allowable under COA Rules. Thus, as per COA Special Audit, the comparison with SM and R-1 Consortium was not on an apples-to-apples basis,” Garcia said.

“True perhaps that the project was expensive. The Sandiganbayan upheld, however, that it had not been overpriced as to that respect,” he said.

The Legaspi portion of the road project stood out like a sore thumb because two other contractors built their end of the project lower than the government’s projected cost—SM built 1,426 meters of road and a 100-meter bridge at P132.4 million, less than the cost estimate of P264.3 million; and DM Wenceslao built 1,186 meters of road and a 55-meter bridge at P164.7 million, also below the cost estimate of P186.9 million.

All those recently acquitted were members of the board who were all Arroyo appointees.

Those found guilty due to procedural lapses were PEA management and members of the old board appointed by then President Joseph Estrada: Manuel Beriña Jr., Jaime Millan, Bernardo Viray, Theron Victor Lacson, Raphael Pocholo Zorilla, Cristina Amposta-Mortel, Frisco Francisco San Juan, Carmelita de Leon-Chan, Daniel Dayan, Salvador Malbarosa, Leo Padilla, Elpidio Damaso and Legaspi.

Although the court held that there was no conspiracy between JDLC and the PEA in the bidding, award or the execution of the contract, Legaspi was, nevertheless, included because the Sandiganbayan said “(t)he bottom line is that accused Legaspi continued working on the project even without the assurance that he will be paid.”

Garcia explained in his statement: “Contractor (JDLC) was held liable for constructing the Seaside Drive Way connecting the PDMB to Roxas [Boulevard] without the assurance that he would be paid. The necessary approval from the Office of the President had supposedly not yet been issued when the contractor began works.

“The Seaside Drive Way was not included in the original contract but was later on awarded to the private contractor for immediate implementation to provide access to the highway as an alternate route to decongest the horrendous traffic along Roxas Boulevard.

“The costs of these new and additional works increased the original contract price. According to the Sandiganbayan, the driveway was an unnecessary and unauthorized expense which increased the total contract cost. Such increase had supposedly been tantamount to an overpricing which the Sandiganbayan says could have been avoided.

“This road network is of world-class quality. At the very least, it is unlike any of its neighboring roads. Despite its expanse and the understandably soft character of its reclaimed soil, this boulevard has maintained its strength and durability without repair in the last 13 years. The immediate and efficient completion of this roadway inarguably sparked a boost in the economy.

“(T)he roadway has not merely eased the grueling traffic congestion during the ‘90s, but has increased the value of properties in the reclaimed areas almost a hundred-fold. In 1995, properties within the Central Business Park was worth between P4,000 and P5,000 plus per square meter. In 2003, after completion of the roadway, the appraisal reports were in the range of P30,000 to P50,000. Now, the properties have escalated to P100,000 to P150,000 per square meter.

“All the accused will be filing the necessary legal actions to seek for the reversal of the decision,” Garcia said.

The Office of the Ombudsman filed the case in 2003, a year before the PEA was abolished. Its functions were transferred to the Philippine Reclamation Authority and the Department of Finance.–Gil C. Cabacungan