Probe of P.7B Drilon project sought

REPOST FROM THE PHILIPPINE DAILY INQUIRER

By Gil C. Cabacungan, Nestor P. Burgos Jr. |Inquirer Visayas, Philippine Daily Inquirer

ARTIST PERSPECTIVE This is how Iloilo Convention Center will look when completed, according to the artist perspective. The structure in Barangay Airport, Mandurriao district, has been described as “overpriced” by Rep. Terry Ridon and is the pet project of Senate President Franklin Drilon, who hails from Iloilo province. PHOTO COURTESY OF ILOILOBUSINESS PARK
MANILA, Philippines–A purported P700-million pet project of Senate President Franklin Drilon being carried out by Hilmarc’s Construction Corp., the contractor of the allegedly overpriced Makati parking building under scrutiny in the Senate, will be the subject of a congressional inquiry.
Kabataan Rep. Terry Ridon has filed House Resolution No. 1466 urging the House committee on public works and highways to investigate in aid of legislation on possible cases of corruption and overpricing involving 20 government infrastructure projects erected by Hilmarc’s in the last decade.
Ridon’s probe will center on the Iloilo Convention Center (ICC), which the party-list lawmaker described as the most extortionate of the Hilmarc’s haul of government projects.
Ridon claimed that the ICC, which was funded partly out of Drilon’s P200-million allocation from the Priority Development Assistance Fund (PDAF) in 2012 and P100 million from Malacañang’s Disbursement Acceleration Program (DAP) in 2013, was being built at a cost of P109,375 per square meter based on a floor area of 6,400 sqm.
The center is four times more expensive than the estimated construction cost of the P900-million SMX Convention Center in Pasay City at P26,400 per sqm based on a floor area of 46,647 sqm, Ridon said.
“The ICC is overpriced by P531 million compared to the SMX Convention Center,” he said.
‘Muddling the issue’
Drilon blasted Ridon for using erroneous data in making false allegations against the ICC project, which was being rushed for completion in time for the Philippines’ hosting of the Asia-Pacific Economic Cooperation (Apec) leaders’ meeting next year.
Drilon claimed that the ICC had a total floor area of 11,693.79 sqm—6,080 sqm in the ground floor, 3,381 sqm in the second floor, 668.73 sqm in the mezzanine level and 1,563.84 sq m on the roof deck—or nearly double Ridon’s assumed size of the project.
“The project costs P63,893.11 per sqm based on a design made by architect William V. Cosculluela. The building is seven stories tall and designed without any columns but with long span beams and glass curtain walls. It was bid out by Public Works Secretary Rogelio Singson, who is widely known for his integrity,” Drilon said in a phone interview.
Project nears completion
“He (Ridon) is just muddling the issue. You can’t compare two buildings just because they were built by the same contractor,” Drilon said, referring to Hilmarc’s Makati parking building, which a lawyer claimed was overpriced by P2 billion compared to other luxury buildings in Makati.
The two-story ICC, which is at least 85-percent completed, costs a total of P747 million, engineer Edilberto Tayao, Western Visayas director of the Department of Public Works and Highways (DPWH), told the Inquirer on Monday.
But in an earlier interview, Tayao said the whole project, including site development and landscaping would cost P830 million.
Tayao said the cost of P747 million for the building construction was based on the final program of work for three phases of the project.
“The building will be operational, functional and ready for occupancy. This will also include two escalators,” he said.
Apart from financing from the PDAF and the DAP for the project, Tayao said funding was also being provided by the DPWH and the Tourism Infrastructure and Enterprise Zone Authority.
20 Hilmarc’s projects
Ridon likened his plan to comb through Hilmarc’s portfolio of government projects as “akin to opening the proverbial can of worms.”

IN FULL SWING Construction of the controversial Iloilo Convention Center is in full swing with the shell of the reportedly overpriced building expected to be completed in November. The structure, said to be one of the venues of the Asia Pacific Economic Cooperation in 2015, is said to be more expensive than the famous Bird’s Nest, site of the 2008 Beijing Olympics. CONTRIBUTED PHOTO
“In the past decade, Hilmarc’s was able to clinch no less than 20 government infrastructure projects. In some cities, including Iloilo and Makati, Hilmarc’s was able to clinch two or more government infrastructure projects in consecutive years. Several government projects entered into by Hilmarc’s have been the center of local and national controversies involving issues of corruption and overpricing,” Ridon said in a press conference.
Aside from the ICC and the Makati parking building, Hilmarc’s other projects are the P550-million call center building of the Committee on Higher Education (suspended by the Commission on Audit); P184-million Makati police station; P21.5-million University of Makati auditorium finishing contract; P30.45-million Makati swimming pool; P2.1-billion Ospital ng Makati facility; P200-million Abra provincial hospital; P500-million Iloilo capitol building; P450-million Iloilo City Hall; Bacolod government center in 2010; P262-million Bangko Sentral ng Pilipinas in Dumaguete; Quezon City General Hospital; Quezon City civic center; Philippine National Oil Co. Building 5 and Fort Bonifacio Building; Valenzuela legislative building; Sandiganbayan building; and the House of Representatives south wing annex.
“The repetitive selection of Hilmarc’s for various anomalous government projects point to its probable close relations with high-ranking officials both on the national and local level. Such relations may have translated to favorable conditions for both Hilmarc’s and its officials as it is possible that Hilmarc’s engages in institutionalized overpricing in government projects in exchange for the rigging of bidding processes by government officials,” Ridon said in his resolution.
Cost within standards
Tayao said in an interview in Iloilo City that the project cost of Drilon’s initiative was “within standards” for a convention center.
The main convention hall on the ground floor can accommodate 3,000 persons while function rooms on the second floor are good for 560 persons. The second floor will also house a VIP room and museum/souvenir shop.
The first phase of the project, which involves the construction of the building shell, will be completed by November and will cost P500 million, Tayao earlier said.
Also included are earthworks, pile foundation, finishing and painting, sanitary and plumbing, electrical and mechanical works.
The second phase, which includes complete tile work, ceiling, escalators and part of the air conditioning units, is scheduled for procurement and is estimated to reach P200 million, he said.
A third phase that would mainly include landscaping is expected to cost P130 million.
The ICC is being built on a 1.7-hectare lot valued at P200 million donated by Megaworld. The lot is part of the company’s 54-ha property at the former Iloilo airport in Mandurriao District being developed as the Iloilo Business Park.
The state-of-the-art convention center is based on a design inspired by Iloilo’s Dinagyang and Paraw festivals. It is also designed to cater to world-class cuisine requirements.

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MegaWorld Business District

image

The Iloilo City Convention Center is being targeted for completion in the 1st quarter of 2015. The contractor is Hillmarcs Construction.
It sits right in front of the Richmonde Hotel which stands tall in the heart of the MegaWorld Business District in what used to be the old Iloilo Airport in Mandurriao, Iloilo City.

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Iloilo braces for 30% land tax hike

(Reprint from the Philippine Daily Inquirer, August 31, 2014)

By Nestor P. Burgos Jr.

ILOILO CITY, Philippines – The people of this city should brace for higher prices of commodities, services and housing starting next year after the city council passed on Wednesday an ordinance that increases real property taxes.
The council passed the ordinance, which would increase taxes on land by at least 30 percent, after the measure was delayed by opposition from business groups that warned of the new law’s impact on the city’s economy.
City Councilor Plaridel Nava, chair of the council’s ways and means committee, said the increase would be implemented starting on January 1 next year and would generate additional revenue for the city. The estimated additional take from the tax increase is P67 million a year.
Nava said in a committee report that the additional revenue would help cover the P90-million deficiency in the city’s internal revenue allotment share that resulted from the creation of more cities.
Other taxes
The council also approved an increase in taxes on buildings and structures ranging from 6.67 to 23 percent.
If implemented, an owner of a 500-square-meter residential land in La Paz District would have to pay P4,875 in real property tax, up from P3,750 at present.
Iloilo City Mayor Jed Patrick Mabilog earlier appealed to businessmen to reconsider their opposition to the tax increase.
The mayor said the increase was necessary for various projects of the city including the upgrading of drainage systems, installment of more street and traffic lights and the delivery of services.
Iloilo business owners said they relented in their opposition to the proposal of the city government “with a heavy heart.”
Eight business groups earlier protested the increase and called on the city government to instead improve tax collection.
They warned that an increase in real property taxes would dampen investments, slow down economic growth and raise expenses that will be passed on to consumers.
Alternatives
“We want a status quo for the protection of the public so that prices of goods, services and rent would not move up next year,” said the business groups.
“We want our city to be competitive and business-friendly, where the standard of living is cheap and [the cost of doing] business is moderate since we are an emerging city,” said Joemarie Agriam, Western Visayas governor of the Philippine Chamber of Commerce and Industry.
But Agriam said business owners were “united” with the city government in its objective to bring development and progress to the city.
The urban poor group Katilingban sang mga Imol sa Syudad decried the tax increase.
“Ultimately, it is the poorest sectors, not the businessmen, who will suffer the brunt of the increase,” the group said.
“Instead of increasing taxes, the city government should have cut back on spending and looked for other sources of revenues and not squeeze dry the people,” the group said in a statement.

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Waterless city

For the third straight day, FloWater Resources Inc., bulk supplier to the Metro Iloilo Water District, has refused to open its valves and resume the flow of water into the utility company that serves Iloilo City and five municipalities in the province of Iloilo.
This has deprived tens of thousands of Iloilo City concessionaires of tap water in another episode of strong arm tactics employed by the bulk water supplier to force MIWD to pay what it claims to be its arrears in payments for the contracted 15,000 cubic meters of water from its Pototan treatment and processing plant.
FloWater is demanding that MIWD pay P5,000,000 a month in settlement of what it claims to be a total of P111,000,000 in past due charges over a period of 16 months. MIWD has refused to acknowledge this, insisting that it should be paying only the water supply actually delivered.
Because of inadequate pipe-size, only 5,000 cubic meters is actually delivered through MIWD’s injection point number three in Leganes.
By MIWD’s estimate, its arrears only amounted to P15 million as of June. It started paying part — P4 million — of that amount last June. Last week, MIWD issued another check amounting to P7.44 million to cut another P5.6 million from its February 2013 to January 2014 arrears. FloWater refused to receive the check.
Aside from P5 million a month in payments, FloWater is demanding that MIWD’s board of directors adopt a resolution acknowledging the “unpaid debt” and obligating itself to paying P5 million a month until the arrears are fully settled.
The Office of the Government Corporate Counsel (OGCC) has ruled three months ago that claim of FloWater that its contract contained a “take-or-pay” provision in which MIWD will have to pay for the entire volume whether or not it is actually delivered.
FloWater, however, is not about to give up on its claim. It is now holding the entire city and other municipalities covered by the MIWD franchise area hostage.
Surprisingly, City Mayor Jed Patrick E. Mabilog wants the MIWD privatized as a solution to the “inept” and “incompetent” management of the water utility. He also threatened to file graft charges against the Board of Directors.
In the House of Representatives, Rep. Jerry Trenas has also filed a resolution urging the Local Water Utilities Administration (LWUA) to initiate moves for the privatization of MIWD in the likes of Maynilad and MWSS in the national capital.
This concerted effort to convert MIWD into a private utility company is raising suspicion that it seeks the fulfillment of a plan hatched five years ago by Iloilo politicians to corner the water business in the city.

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Garbage mountain

Like sentries to a fortress, these mongrels stand atop a mountain of garbage inside the Calajunan open dump site in Mandurriao, Iloilo City. Under RA 9003, open dump sites like this are supposed to have been shut down six or seven years ago. But this garbage facility in Iloilo City continues to defy the law and poses a public safety threat to residents in the neighborhood. The Iloilo City government borrowed nearly P300 million for the development of a sanitary landfill, but nothing happened. (Photo by Jun Rojas)

Like sentries to a fortress, these mongrels stand atop a mountain of garbage inside the Calajunan open dump site in Mandurriao, Iloilo City.
Under RA 9003, open dump sites like this are supposed to have been shut down six or seven years ago.
But this garbage facility in Iloilo City continues to defy the law and poses a public safety threat to residents in the neighborhood.
The Iloilo City government borrowed nearly P300 million for the development of a sanitary landfill, but nothing happened. (Photo by Jun Rojas)

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Iloilo merchants wary of Drilon’s river wharf ‘redevelopment’

By: F. Allan L. Angelo

(Reprinted from The Daily Guardian)

THE business sector in Iloilo will be consulted on the plan to redevelop the Iloilo River Wharf (IRW) in Muelle Loney, Iloilo City.

This, as some businessmen raised concerns on the plan to rehabilitate and redevelop the wharf as it could displace cargo and warehouse operations in the area.

The IRW redevelopment is part of efforts to rehabilitate the Iloilo River which began with the relocation of informal settlers and removal of unsightly derelicts.

The Iloilo Esplanade was also constructed on the river bank, with the famous Singapore Quay as model.

A new ferry terminal for ships plying the Iloilo-Bacolod and vice-versa route was also constructed on the Lapuz side of the river as part of the rehabilitation project.

Under the Iloilo River project, the Muelle Loney Wharf will be converted into a commercial, retail and tourism area similar to the Singapore Quay.

But top business leaders told The Daily Guardian that they have no idea if cargo loading/offloading, arrastre and warehouse operations will also be transferred to Lapuz district.

They see the move as disruptive to shipping and trade at the IRW which is a major entry and exit point for goods and trade.

Based on data compiled by the Iloilo Business Club, the IRW at Muelle Loney area serves cargo from all over the country, particularly from Cebu, Mindoro, Cagayan De Oro and Manila.

The arrastre and stevedoring operations serve not less than 50 shipping and tramping vessels a month with an average of six vessels at a time.

Tramping or cargo vessels docking at Muelle Loney carry cement, rice, fertilizer, corn, steel bars, flour, sugar, soya beans, snacks, live chicken, vehicles, among others.

Over 40 warehouses at the IRW are leased with 90 percent occupancy.

Commodities that enter Iloilo through Muelle Loney are distributed all over Panay and some parts of Palawan and Mindanao.

Businessmen said transferring the port operations to Lapuz might incur additional costs as they will have to put up new warehouses.

The cost of logistics might affect the price of commodities. In fact, some commodities like fertilizer are now cheaper in Bacolod City than in Iloilo.

Aside from Iloilo traders, some suppliers from Roxas City, Capiz bring in their stocks to Muelle Loney through chartered or tramping vessels (from ship) to hauling trucks.

 

CONSULTATION

Top Iloilo business leaders met with Senate President Franklin Drilon on Wednesday to discuss their concerns.

The business group was accompanied by business executive Rex Drilon II, vice chairman of the Iloilo Economic Development Foundation, Inc. and a cousin of Senator Drilon.

In a phone interview, Mr. Rex Drilon said the national and local governments will consult the stakeholders on the river wharf rehabilitation project.

Drilon said an ad hoc committee composed of the Philippine Ports Authority, Iloilo City government, the business sector, among others, will be formed to gather inputs and make recommendations on how to undertake the project.

He added that IRW project is a follow up to the new Iloilo airport project which Senator Drilon also initiated.

“We have solved the air transportation access via the new airport in Cabatuan, Iloilo. There were some resistance at first but it turned out to be fine. Now we have to address our sea ports,” Mr. Drilon said.

Mr. Drilon said the Iloilo City government will have to come up with a development master plan which will take into consideration ongoing and planned developments in the city.

 

“The master plan will tell what needs to be done, how it should be done and how much do we need. This project will take several years and will encompass several administrations, just like the airport project,” he added.

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How DAP changed the face of Iloilo City

Iloilo City is one of the biggest recipients of the Disbursement Acceleration Program (DAP) that the Supreme Court recently declared as “unconstitutional”. This was made possible by a chief architect of the DAP: Senate President Franklin Drilon.

Here’s a list of DAP funded projects for Iloilo City:

1. The 11-kilometer Balabago, Jaro to Arevalo circumferential road built at an estimated cost of P1 billion;

2. The Benigno Aquino Jr. Avenue (Iloilo Diversion Road) road widening which has surpassed the record of the Macapagal Boulevard as the most overpriced road project. The first phase from the Iloilo Bridge to El 98 in Jaro — with a total length of 1.9 kilometers — cost P298 million!

3. Lanit, Jaro relocation side (P100 million).

4. Parola improvement project (funded through DOTC), P126 million.

5. Esplanade II, P65 million.

6. RORO ferry terminal in Lapuz, P124 million.

7. Arroyo-Lapuz bridge (budget still undisclosed)

For the province, Drilon arranged for P450 million to be released to the National Irrigation Administration (NIA) for the feasibility study for the Jalaur II multi purpose dam.

There is one common feature among all these projects: they are overpriced by 200-300% of the standard costs. The total DAP funds given to Drilon’s projects is estimated at over P2 BILLION! With the overpricing, the kickbacks could run as high as 50% of the project costs.

Just to illustrate the unconscionable overpricing involved, a contract for “earth material filling” for a 300-lineal meter road in Ungka, Pavia which is part of the circumferential road had a price of P14 million! That’s only for the “tambak” on the raw land, and does not include the construction of the Portland Cement Concrete Pavement (PCCP) for the road.

This is the road section of the Iloilo City Circumferential Road in Ungka, Jaro. From the corner to the bridge is only 300 lineal meters. The contract for the backfilling ("Tambak") alone was P14 million.

This is the road section of the Iloilo City Circumferential Road in Ungka, Jaro. From the corner to the bridge is only 300 lineal meters. The contract for the backfilling (“Tambak”) alone was P14 million.

DAP accelerated the infrastructure development for Iloilo city.

It also accelerated the deposits build up of one man.

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