Palace tells PEA, GSIS to explain DM Ave. issue

President Arroyo ordered yesterday the Public Estates Authority (PEA) and the Government Service Insurance System (GSIS) to immediately explain to Malacañang the alleged P600-million overpricing of the 5.1-kilometer avenue at a reclaimed area at Manila Bay named after her late father, President Diosdado Macapagal.

Meanwhile, turning the tables on his accuser, PEA chairman Ernest Villareal said the PEA board has received a complaint from Jesusito Legaspi, owner of the Jesusito D. Legaspi Construction, that director Sulficio Tagud through another ranking PEA official has demanded P2.1 million in exchange for the board’s approval of the P42-million price adjustment for the JDLC’s work on a portion of the avenue.

Former President Joseph Estrada said yesterday he does not know "any person by the name of Jesusito Legaspi nor do I have a friend in the Jesusito D. Legaspi Construction, the construction firm which built the overpriced 2.3 km-portion of the President Diosdado Macapagal Avenue."

Press Secretary Ignacio Bunye said yesterday the President instructed PEA general manager Benjamin Cariño and GSIS general manager Winston Garcia to submit written explanations on the reported overpricing of the President Diosdado Macapagal Avenue.

Mrs. Arroyo inaugurated the asphalt avenue which was meant to ease traffic along Roxas Boulevard.

Bunye said the two officials were ordered to respond to the allegations raised by Tagud, who exposed the reported P600-million overpricing of the construction project.

Their respective explanations should be forwarded to Chief Presidential Legal Counsel Avelino Cruz and that no specific deadline was given except to submit them "immediately," he said.

The PEA was the implementor of the project because it owns the Manila Bay reclamation area, while the GSIS provided P1 billion in loans which funded the project.

Of the entire project, Tagud claimed that only a 2.3-km portion was built by JLDC, reportedly owned by a friend of Estrada, while the rest was built by two other firms.

In an interview yesterday over Angel Radio of MBC, Tagud claimed that JLDC was already paid for in cash from the P600 million, while the two other firms were "paid in land" by the government-owned PEA at the 750-hectare Manila Bay reclamation area.

Tagud implicated in this particular case PEA assistant general manager Manuel Berina Jr. whom he claimed has a pending graft case of the Office of the Ombudsman over the controversial deal involving the disposition of the Manila Bay reclamation called the "mother of all land scams" during the time of then President Fidel Ramos.

Tagud claimed that no less than Mrs. Arroyo was "cheated" in the project when she was not consulted when the JDLC revisions of its cost escalation contracts were approved by the PEA board, all of whom were her appointees.

Under the PEA charter, Tagud said any changes in the cost escalation contracts must go through the process of approvals of the PEA and the Office of the President.

Villareal said Tagud’s alleged exposé was a "pre-emptive defense by launching an aggressive offense."

Villareal said Tagud "realized that there was strong possibility that there would a be complaint for extortion to be filed against him."

In an interview with The STAR, JDLC owner Legaspi confirmed that the alleged extortion, but refused to give details. He said he would file a case against Tagud today.

Tagud’s alleged cohort, Pelagio Lalap, PEA assistant general manager for finance, treasury and comptrollership, has been out on a 90-day preventive suspension order since Sept. 16 for dishonesty and grave misconduct based on a recommendation by the Office of the Government Corporate Counsel (OGCC).

The OGCC found prima facie evidence against Lalap, who was accused by another PEA contractor, Catalina Security Agency (CSA), of proposing that the security services contract should be awarded to them in exchange for a 10-percent share of its total monthly collections. The share would allegedly go to the PEA board.

The complaint was filed by CSA owner Placido Urbanes on Feb. 11, 2002.

PEA director Rodolfo Tuazon told The STAR that he had confronted Lalap about the extortion charges and Lalap admitted the accusation verbally, but later retracted it through an affidavit.

Estrada said "there is no question that the eight-lane asphalt road ... was grossly overpriced by as much as P600 million or 120 percent more than the actual amount."

In a statement, he said, "Who made a killing from the price escalation should be promptly investigated and those responsible charged before the appropriate courts."

Lack of transparency within the PEA management made possible the alleged P600-million overpricing, Sen. Aquilino Pimentel Jr. said yesterday.

"Elementary rules of transparency were flagrantly violated, resulting in the breakdown of the system of checks and balance aimed at preventing irregularities," he said. – With reports from Efren Danao