Cebu News

COA tells DOTR in report: Millions lost in BRT delay

Jean Marvette A. Demecillo - Agence France-Presse
COA tells DOTR in report: Millions lost in BRT delay
This is cited in the March 12 Annual Observation Report of Commission on Audit’s Supervising Auditor, Avenilda Torres, to the Department of Transportation (DOTr), the agency implementing the P16.3 billion BRT project.

CEBU, Philippines — The delay in the implementation of the Bus Rapid Transit (BRT) system in Cebu City is causing government over P17 million in commitment fees to its creditors, as well as administrative cost.

This is cited in the March 12 Annual Observation Report of Commission on Audit’s Supervising Auditor, Avenilda Torres, to the Department of Transportation (DOTr), the agency implementing the P16.3 billion BRT project.

COA said the transfer of procurement of Technical Support Consultant from DOTr to the procurement service of the Department of Budget and Management (DBM) despite having its own Bids and Awards Committee caused further overall delay in the project’s implementation.

The delay, COA said, has ran more than one year and two months as of December 2017, which costs the national government P2.952 million.

COA said the delay has caused the government P14.481 million in commitment fees to its creditors.

“The delay in the project implementation also resulted in low utilization/availment of loan proceeds hence the accumulation of commitment fees amounting to P14.481 million for calendar years 2015-2017,” reads portion of the 13-page AOM obtained by The FREEMAN.

In 2014, the government entered into a loan agreement with Agence Francaise Development (AFD) and World Bank (WB) through the International Bank for Reconstruction and Development (IBRD), Clean Technology Fund (CTF), and Credit Facility Agreement (CFA) to implement the BRT project.

Under the agreement, the Philippine Government availed of a loan amounting to $198.5 million to fund the project, on top of its own budget of $30 million.  The WB will finance the CBRTP with $116 million loan from the (IBRD), $25 million from its CTF, and another $57.5 million from AFD.

COA said the low utilization or availment from loan proceeds caused the government to incur unnecessary expenditures in the form of commitment fees – P1.9 million in 2015; P6.15 million in 2016; and P6.41 million in 2017, according to the Debt Accounting Division Bureau of the national treasury.

COA addressed the AOM to DOTr Secretary Arthur Tugade, DOTr Undersecretary Thomas Orbos, and BRT project manager Atty. Rafael Christopher Yap.

This is the second AOM of COA, which calls the attention of DOTr for the millions of pesos wasted for the commitment fees because of the delay in the implementation of the project.

COA said the review of the project implementation revealed that the substantial delays are due to prolonged procurement processes for consulting services, various technical individual consultants or specialist, and civil works thereby resulting to slow progress in accomplishment and negative slippages noted in several project components.

“Due to the absence of TSC (Technical Support Consultant under DOTr) and to move forward with the procurement of civil works,” reads portion of AOM.

As of December 2017, DOTr’s BAC resolution on the recommendation to award the contract to the consultant was under review by the department’s legal office.

Without the TSC, the BRT Project Implementation Unit cannot proceed with the civil works, detailed engineering, and other aspects of the project.

COA noted that theirs is P920 million obligated for the right-of-way acquisition and resettlement as the BRT PIU and the city government has an ongoing negotiation with residents affected by the project.

“The procurement of the civil works for the BRT project has yet to be started and has already incurred delays from its original and revised target dates. In the initial approval of NEDA Board of CBRT project on May 29, 2014, its target start of construction was on October 2014 and to be completed on September 2016 which was already way behind its schedule,” COA said.

COA noted further that DOTr’s non-mobilization of Technical Support Consultant was considered a major reason or the start of the “chain reaction of delays” in the completion of the BRT project as a whole.

In the April 2 management comment, Yap said the main cause of the delay of the project is procurement.

“The absence of the Technical Support Consultant resulted not only to negative slippage but also additional cost to the detailed engineering design. Since BRT is new to the country, the DOTr has no technical capacity to review the work of the DED Consultant, thus, variation orders arose. DOTr’s original covenant with the World Bank was 31 March 2015,” Yap said in his letter to COA.

Yap also cited that the opposition of Presidential Assistant for Visayas Michael Lloyd Dino to the project is also causing the delay.  Just recently, the services of at least 13 employees of BRT PIU were not renewed by DOTr, reportedly because of the impending reorganization of the office.

Yap said a plan is in place to meet the project’s target completion in 2021 but stressed that strong political will on the part of the principals is necessary to avoid further delays. — /JMO (FREEMAN)

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