Public works contracts under PNoy: Openness, savings, delays

THE PROVINCE of Pampanga is one of the worst places to be in during the rainy season. Located at the bottom of a geological depression, it lies at the heart of Central Luzon’s drainage system where floodwaters from surrounding provinces converge before rushing out into Manila Bay. And within it lies another sinkhole, the town of Candaba, an old lakebed whose swamps and fields offer a temporary resting place for migratory birds on their way to and from North Asia.

No wonder Candaba’s mayor was furious when Public Works Secretary Rogelio Singson in late July 2010 cancelled a P78-million contract to repair the town’s dikes and riverbanks that help contain the waters of the Pampaga river.

At the time, Singson had barely warmed his seat at the Department of Public Works and Highways (DPWH), having been appointed just less than a month before. Yet, he seemed already on his way to making his first enemy as DPWH chief, with the Candaba mayor warning that if the river swelled and the dikes collapsed, floodwaters would submerge not just Candaba but also the towns of Mexico, Sta. Ana, and San Fernando.

But the cancelled deal to rehabilitate Candaba’s embankments was just one among some 19 contracts for projects to rebuild infrastructure damaged by tropical cyclones Ondoy and Pepeng that the new secretary nullified after he found they were awarded with no public bidding.

In fact, within months of coming to power on June 30, 2010, the new administration either froze, modified, or cancelled scores of infrastructure projects, in accordance with President Benigno Simeon C. Aquino III’s anti-corruption campaign.

The contract cancellations may have discomfited Candaba’s mayor – and perhaps many of the townspeople themselves. But little harm was done in the end.

A PCIJ review of DPWH databases on awarded civil-works contracts and bidding results reveals that most of the suspended flood-control projects were eventually bidded out and implemented. We also found the DPWH got much lower prices for the contracts to carry out the civil-works projects, suggesting the delays were well worth it.

This is quite a surprise for a department long perceived as hopelessly corrupt and inefficient. The PCIJ itself had no expectations when it reviewed about 2,600 biddings conducted by the DPWH 18 months before, and 20 months after, the Aquino administration came to power on June 30, 2010, to see if there have been any palpable improvements in its procurement activities.

Copies or summaries of the bidding results are posted on the DPWH website but PCIJ also asked for a copy of the database in spreadsheet format, which Singson readily granted. (Click here for the DPWH database)

A similar PCIJ request made to then DPWH Secretary Hermogenes Ebdane Jr. was not granted in early 2009.

Early gains

The PCIJ found that by most indications – and despite apparent resistance from some local officials – the much-maligned department seems to be finally paving its own daang matuwid (straight path), the battle cry of the Aquino administration.

For instance, the cost savings from awarding the suspended post-Ondoy and Pepeng rehabilitation projects through competitive tender could be signs of early gains from the new DPWH secretary’s campaign to curb graft in the department.

In Candaba, for example, the department tendered the contract to repair the dikes and riverbanks in January 2011, six months after it was cancelled. There were eight bidders, including Northern Builders, the original contractor, which offered the lowest bid of only P58.4 million, or a quarter less than the original contract price.

The difference amounts to some P24 million in real savings for the government; it gets the same structure built for much less. Northern Builders began construction in March 2011 and had completed 65.3 percent of the Candaba dike and riverbank works as of February this year.

Costs down 34%

Similarly, most of the 19 civil works contracts cancelled by Singson in July 2010 had been successfully bidded out in 2011, and many of the projects are already being built, according to data gathered by the PCIJ. At least three have been completed as of February 2012. New contract prices for 14 projects on which information is available show that the DPWH was able to bring down costs by an average of 34 percent compared to the original cost.

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