COA: CPA didn't collect P14M from realty firm

CEBU, Philippines - The Commission on Audit has discovered that the officials of the Cebu Port Authority have been lenient in their efforts to collect P14.6 million in collectibles from a private company that leased the Sangi port in Toledo City.

COA-7 Regional Director Delfin Aguilar recommended that the CPA officials should assert their right to collect the huge amount so that it can be used for projects that will benefit the public.

Records show that in 2005, the CPA officials entered into a contract with the Hinigaran Realty Development Corp. for the latter to lease and operate the port facility located in Sangi Beach, Toledo City.

The port will be used for the operations of AFC Fertilizer and Chemicals Inc. One of the provisions in the contract is that Hinigaran Realty shall pay 100 percent of wharfage, arrastre, stevedoring and other port charges due to the CPA.

However, the contract specified that only 50 percent will be remitted to the CPA and the other half will be set aside for the development of the port facility until the completion of the rehabilitation to be completed in 10 years.

It was stipulated in the contract that the lessee shall undertake a 10-year rehabilitation of the port facility in the amount of P117 million to be divided into eight phases.

But COA learned from the CPA Engineering Services, and the Finance Division that from 2005 until March 2009 the lessee has not started any rehabilitation project of the Sangi port.

COA said the physical appearance of the subject port speaks for itself. The facility is already deteriorating, with some portions apparently dilapidated that prompted CPA to take responsibility for the repair of the port facility to save the property for further deterioration.

CPA officials explained that last March 2009 they advised Hinigaran Realty to remit to them the remaining 50 percent that was retained to them. The records showed that CPA had already spent P9,162,549 as payment to Rigid Construction Corp. for the rehabilitation of the port facility.

Inquiry from the CPA as to why there was no remittance from Hinigaran Realty disclosed that the lessee claimed that it had already spent the money retained in repairing and maintaining the port.

But Aguilar said as of December 31, 2009 the CPA finance section still did not receive any document from the lessee to prove this claim. (FREEMAN)