ICI's first report: Charges sought vs Zaldy Co, execs over P289-M Mindoro project

MANILA, Philippines — The government’s independent body for probing infrastructure projects has recommended the filing of criminal and administrative charges against Rep. Zaldy Co (Ako Bicol) and several Department of Public Works and Highways officials over alleged anomalies in a P289.5 million flood-control project in Oriental Mindoro.

In a report filed with the Office of the Ombudsman on Monday, September 29, the Independent Commission for Infrastructure (ICI) said there was “reasonable ground” to pursue cases of graft, malversation, falsification of public documents, and procurement law violations, after inspections showed substandard materials had been used for the project. 

This project was implemented through contractor Sunwest Inc., a firm with links to Co, the lawmaker who chaired the powerful House appropriations panel in the 19th Congress.

Among its major findings on the Sunwest project, ICI said the government suffered preliminary estimated damages of P63.9 million due to the alleged use of "grossly substandard" materials in the construction of a road dike along the Mag-Asawang Tubig River in Naujan, Oriental Mindoro. 

First major report. The interim report personally submitted by ICI Chairperson Andres Reyes Jr. on Monday is the first set of major recommendations endorsed by the body, which was created earlier this month by President Ferdinand Marcos Jr.   

The Oriental Mindoro project was funded under the 2024 General Appropriations Act. Sunwest received the notice of award in February 2024.

Substandard materials, inflated costs

The ICI said DPWH officials approved and paid contractor Sunwest Inc. for 12-meter sheet piles as required in the detailed engineering design. 

But when Public Works Secretary Vincent Dizon and Oriental Mindoro Governor Humerlito Dolor inspected the site on September 9, they found sheet piles only three meters long, including the portion embedded in concrete.

Using the shorter piles essentially meant the government paid P84.5 million for materials that should have cost only P20.6 million, resulting in potential losses of some P93.9 million, according to the report.

"Please note that the figures assumed above pertain only to the use of substandard steel sheet piles," the ICI said in the report. 

"It remains to be seen whether other materials used for the Project were also substandard, and whether the amount of damage suffered by the Government is even greater than the assumed figures," it added.

DPWH officials' alleged false certifications

Despite the deficiencies, multiple DPWH officials certified that works were "accomplished consistent with the plans and specifications" and that materials were "verified and tested in accordance with specifications," among others.

"Given the substandard materials used for the Project, it appears that various DPWH Officials, in possible connivance with Sunwest’s officers/directors/employees, made false certifications in the documents which supported and resulted in the payment of Sunwest’s questionable progress billings," the report read.

The commission also found critical supporting documents were missing from progress billings. For the first billing alone, absent documents included the contractor's notarized affidavit, backup computations, material quality test certificates, and tax forms required under DPWH regulations. 

The geotagged progress photos submitted by Sunwest were also described as "measly two to four photos" that "can hardly justify" payments amounting to P35 million to P40 million.

These two submitted progress photos, the ICI said, "appear to have been submitted, only to ostensibly show some form of progress."

The commission also flagged what it sees as evidence of the same progress photos being used for different billings.

"Worse, for the first two progress billings, the very same set of photographs were used," the ICI said, adding that this is in step with the anomalies earlier flagged by Sen. Panfilo Lacson in a privilege speech on September 9. "Any reasonable project owner would not have simply taken such photographs as gospel and approved payment."

The commission recommended charges against DPWH MIMAROPA Regional Director Gerald A. Pacanan; Assistant Regional Directors Gene Ryan Altea and Ruben Santos Jr.; Construction Division Chief Dominic Serrano; project engineer Felisardo Casuno; materials engineer Timojen Sacar; and accountant Lerma Cayco.

Sunwest links to Co

The contractor, Sunwest Inc., was reportedly founded in 1997 by Co, who chaired the House appropriations committee from July 2022 until January 2025. That position gave him significant influence over at least three national budgets (2023, 2024 and 2025), including infrastructure allocations.

Corporate records show Co held a 28% stake in Sunwest as of March 2018. By May 2020, he was no longer listed as a shareholder. The commission noted reports that Co maintains "beneficial ownership" in entities linked to Sunwest, though it said his potential liability was "conditioned upon further proof."

From 2016 to 2025, Sunwest and its joint ventures secured over P86 billion in government infrastructure contracts, with over a third or P32.9 billion awarded in the MIMAROPA region where the Oriental Mindoro project is located, according to DPWH data cited in the report.

The commission recommended charges against Sunwest President Aderma Angelie Alcazar and the company's board members for conspiracy to commit the alleged violations.

Only two bidders

The commission also flagged possible irregularities in the bidding process. Only two firms submitted bids for the project: 

• Sunwest at P279,859,649.99, and
• St. Matthew General Contractor & Development Corp. at P281,104,560.35.

"We have yet to be furnished with a copy of the actual bid of St. Matthew as of this writing," the report stated. "For now, the Commission cannot discount the possibility that the document may not exist at all, or was not submitted in accordance with prevailing laws and regulations."

The commission recommended investigating DPWH IV-B Construction Division Chief Dominic Serrano and three members of the Bids and Awards Committee for potential bid-rigging or violations of procurement regulations.

LIST: Who faces charges

This is the full list of individuals that the ICI has recommended charges against:

DPWH officials

• Gerald A. Pacanan, CESO III – Regional Director, DPWH MIMAROPA Region IV-B
• Gene Ryan A. Altea – Assistant Regional Director
• Ruben C. Santos Jr. – Assistant Regional Director
• Dominic G. Serrano – Chief, Construction Division and BAC Chairperson
• Felisardo S. Casuno – Project Engineer III
• Timojen A. Sacar – Materials Engineer
• Montrexis T. Tamayo – OIC-Chief, Planning and Design Division
• Juliet C. Calvo – Chief, Maintenance Division
• Dennis P. Abagon – OIC-Chief, Quality Assurance and Hydrology Division; BAC Regular Member
• Lerma D. Cayco – Accountant IV
• Grace D. Lopez – BAC Regular Member
• Friedrich Karl L. Camero – BAC Vice Chairperson

Sunwest Inc. officials:

• Aderma Angelie D. Alcazar – President and Chairman of the Board
• Cesar X. Buenaventura – Board Member and Treasurer
• Consuelo D. Aldon – Board Member
• Engr. Noel Y. Cao – Board Member
• Anthony L. Ngo – Board Member

Others:

• Rep. Elizaldy "Zaldy" Co (Ako Bicol) – Former House Appropriations Committee Chairman, subject to "further proof" of beneficial ownership in entities linked to Sunwest
• Other potential respondents linked to Sunwest's construction contracts

The recommended criminal charges include:

• violations of Republic Act 3019 (Anti-Graft and Corrupt Practices Act), specifically Sections 3(e), (g), and (h);
• malversation of public funds under Article 217 of the Revised Penal Code in relation to falsification of public documents under Article 171; and
• violations of Republic Act 9184 (Government Procurement Reform Act).

Administrative charges recommended include violations of the Code of Conduct and Ethical Standards for Public Officials and Employees, and potential breaches of Civil Service Rules and Regulations.