COA sees red flags in DPWH projects awarded to contractors from 2009-2010

(Updated 3:10 p.m.) The Commission on Audit (COA) has found several red flags in the transactions entered into by the Department of Public Works and Highways with 12 contractors in the tail-end of the Arroyo administration, with the anomalous transactions reaching P16.5 billion.

COA chairperson Grace Pulido Tan said during the hearing of the House committee on good government and public accountability that the special audit was conducted upon the request of DPWH secretary Rogelio Singson, who furnished COA with the names of the contractors.

The special audit covered the infrastructure projects awarded to:

• Antonio V. Nidea Construction
• Sunwest Construction and Development
• DSB Construction
• N-Four General Contr.
• Hi-Tone
• Three W Builders
• RAM Builders
• I & E Construction
• Algimar Construction
• Ferdstar Builders
• Ritz Commercial
• E. Gardiola Construction
• LMG Construction

E. Gardiola Construction was identified in a 2009 report written by the Philippine Center for Investigative Journalism (PCIJ) as one of the contractors who reportedly failed to submit accomplishment reports to the DPWH for several projects amounting to P6 billion.

Based on COA’s findings, E. Gradiola/Readycon Trading undertook the C5 extension project covering South Luzon Expressway/West Service Road-Sucat worth P578.527 million without funding cover, Notice of Award and contract.

The DPWH team found several defects in the project even as contractors have been paid 98 percent of contract price or P553.6 million and surety bonds have expired.

Overpriced and deficient

Some of the defects found in the C-5 projects were:

• Cracks on concrete sidewalks, curb and gutter and concrete pavement at various stations and portions or phases of the project
• Absence of asphalt sealant on most of the weakened plane joints
• Collapsed or demolished fence of service road inside the Ninoy Aquino International Airport
• Chipping of edges of concrete pavement

The COA audit also revealed that several of the projects cornered by some of the 12 contractors were overpriced by several millions of pesos.

Ferdstar Builder allegedly overpriced its projects in the Eastern Visayas by as much as P23.8 million. E. Gardiola/Triple 8, meanwhile, allegedly exceeded the contract costs for the projects they implemented in the same region by P17.5 million.

I & E Construction, which supposedly cornered more than P1 billion worth of DPWH contracts from 2009 to 2010, were found to have overpriced their projects in Central Luzon by P11.5 million.

Other substantial findings of the COA special audit include the use of substandard materials by some of the contractors and the incompleteness of some projects by as much as 75 percent.

COA has issued 27 notices of disallowance to contractors asking them to return P184.6 million. Of this amount, only P17.8 million has been refunded, Tan said. —KBK, GMA News