Payment for SRP contractor withheld

CEBU, Philippines - The Cebu City Council has adopted the recommendation of the committee on laws, good government and public accountability to defer the release of payment to TOA Corporation, one of the private contractors of the South Reclamation Project (SRP).

The TOA Corporation, which completed the project on Feb. 19, 2004 and turned over its work to Cebu City on Oct. 25, 2004, is claiming P28.5 million in price escalation from the City Government for their work on the access road.

But council chairman of the committee on laws Edgardo Labella, in his report, cited reasons to withhold payment for TOA.

He said the contractor should enlighten the Council on the need to re-do the Mambaling access road.

“There are observations made. Prudence dictates that before payment will be made to TOA Corporation, the latter should first enlighten the members of the Council on these observations to avoid any questions that may be propounded later on,” Labella said.

Last July 15, Councilor Joey Daluz sponsored a resolution to release payment to the construction firm. But he stressed that he was only using as basis the recommendation of the ad hoc committee which reviewed the claims.

Daluz, chairman of the City Council’s budget and finance committee, said TOA made their payment claims in 2002 but the City deferred payment because that time, there was no income from the SRP.

In January 23, 2006, the TOA submitted to the City a price escalation billing statement in the amount of P36.2 million. Later, they submitted a corrected price escalation billing statement on Feb. 27, 2009, this time in the amount of P28.5 million.

TOA wrote to former mayor Tomas Osmeña and now mayor Michael Rama to claim the P28.5 million.

Rama tasked an ad hoc committee led by City Administrator Jose Marie Poblete to evaluate and determine the propriety of TOA’s monetary claims.

The adhoc committee in a report last April 2011 said it has determined the “validity, propriety and reasonableness of the claim of TOA Corporation.” It recommended to Rama the approval of the contract price adjustment with price escalation claim.

The committee cited Section 6 of the project contract agreement which says that “the implementation of rules and regulations regarding adjustment of contract price adopted and approved by the City Government will be applied in this contract”.

Labella, however, said it “may not be far fetched to say there is legal basis for the city to pay TOA Corporation,” but still he is not recommending for payment.

Instead, Labella moved to hold an executive session to invite TOA representatives to answer relevant observations regarding the road pavement in the area.

Osmeña already said the City should not pay TOA yet because the Mambaling access road has poor foundation. — (FREEMAN)