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‘Overpriced’ Iloilo Convention Center costlier than Bird's Nest in Beijing – lawmaker

The P700-million Iloilo Convention Center (ICC), construction of which was partly financed by funds Senate President Franklin Drilon received from the Disbursement Acceleration Program (DAP), is overpriced, a lawmaker claimed Monday.

Kabataan party-list Rep. Terry Ridon said the ICC even upstaged the world-renowned Beijing National Stadium, more popularly known as the Bird’s Nest, in terms of building price, at P109,375 per square meter compared to the Olympic Games venue's P79,216.

The ICC — a two-storey structure with a total floor area of 6,500 square meters and sits on 1.7 hectares of land — was built by Hilmarc’s Construction Corporation (HCC), the contractor that built the allegedly overpriced Makati City Hall Building II. The Senate is currently conducting a probe on the building’s construction.

Ridon has filed House Resolution 1466 urging the House committee on Public Works and Highways to probe HCC for clinching several big-ticket government infrastructure projects, some of which are embroiled in controversies involving corruption and bloated construction costs.

“The repetitive selection of HCC for various anomalous government projects points to its probable close relations with high-ranking officials both on the national and local level,"  Ridon said, adding the firm may have engaged in "institutionalized overpricing" in exchange for rigged bidding.

Among the government structures HCC built were the P500-million Iloilo Capitol building in early 2000 and the P200-million Abra Provincial Hospital in 2010.

Ridon did not say whether these projects were also allegedly overpriced.

'Overpriced by P531 million'

Of the 20 construction contracts HCC snagged from the government in the last 10 years, the 6,400-square meter ICC stands out as the firm’s “biggest overpriced project” to date, Ridon claimed.

“If we match the cost of the ICC to the per square meter cost of the Bird’s Nest, the budget for the Iloilo project will appear overpriced by P191 million. Worse, if the ICC was built with the same cost per square meter of the SMX Convention Center, it will appear that it is overpriced by P531 million,” the lawmaker said.

The 254.6 thousand square meter- Bird’s Nest, the site of the 2008 Beijing Olympics, was constructed to the tune of $423 million or P18.8 billion. In current prices, the total construction cost of the Bird’s Nest is said to be $463 million or P20.17 billion.

“This means that the per square meter cost of the ICC is P30,149 more expensive than that of the Bird’s Nest,” Ridon said.

The youth lawmaker noted that even at the local level, the ICC’s construction cost per square meter is still exorbitant.

He said the 46,647-square meter SMX Convention Center in Pasay City only has a construction cost of P26,400 per square meter.

Ridon described the ICC’s P700 million price tag as a “staggering amount”, citing the estimates of the 2014 Davis Langdon & Seah Handbook on Construction Costs, where the construction of a 5-star luxury hotel only costs P63,350-P77,800 per square meter, including amenities.

The development management consultant firm said in the 2013 handbook, which is available online, that "it must be understood that the actual cost of a building will depend upon the design, procurement methods and many other factors and may vary from the figures shown."

Cost estimates are also based on buildings that "are assumed to have no basements, and are built on flat ground with normal soil conditions and minimal external works." The estimates also exclude "land cost, professional fees, finance and legal expenses."

It also said that standards for the buildings in each category vary across countries and cities. The 2013 handbook includes Manila in its index of construction costs in selected cities in Asia.

APEC venue

Construction of the ICC was partly financed by Drilon, who allocated P200 million of his Priority Development Assistance Fund (PDAF) to the project in 2013, and another P100 million from the DAP.

Other sources of funds for the convention center’s construction include the P200 million from the Tourism Infrastructure and Enterprise Zone Authority and another P200 million from the Department of Public Works and Highways (DPWH).

According to Ridon, construction of the ICC is being hastened so it will be finished in time for the Asia Pacific Economic Cooperation (APEC) meeting in 2015.

Iloilo was said to have been preselected by the APEC organizing committee to host two of the 20 meetings that will be held in the Philippines next year. — JDS, GMA News