EDITORIAL - Overpriced

In the administration of daang matuwid or straight path, government auditors have uncovered infrastructure projects that they described as overpriced by as much as P154.99 million. The Commission on Audit wants the Department of Public Works and Highways to deduct the amounts or have the contractors refund the overprice.

DPWH officials said they were reviewing the basis for the audited overprice for the projects that were implemented in 2011. If there was deliberate overpricing, it is a criminal offense. The DPWH should determine if any of its officials and personnel should be held accountable together with erring contractors.

Since the daang matuwid has become the favorite metaphor of the Aquino administration in its anti-corruption campaign, priority should be given to ensuring that road projects in particular will not be tainted by anomalies. In fact because of the daang matuwid imagery, it would be good for the administration to turn road projects into showcases for the new way of doing business in the Philippines.

Studies conducted in recent years by the World Bank have shown that road and other infrastructure projects have become major sources of corruption especially in developing countries. In January 2009, the World Bank debarred seven Philippine and foreign contractors from participating in WB-funded projects after the firms were found to have engaged in collusive bid-rigging for two road projects costing $33 million. Corruption is now seen as a serious hindrance to anti-poverty and development efforts. The problem derails efforts to improve infrastructure.

DPWH officials may have a valid explanation for the reported overprice. The ongoing review of the COA report should lead to a better system of cost estimation and pricing of supplies and services provided by DPWH contractors. Investors have cited inadequate infrastructure as one of the major disincentives to business in the Philippines. Corruption can only worsen the problem and should be confronted decisively.