Blue Ribbon virtually clears GSIS in P1.1-B loan to PEA

The Senate Blue Ribbon Committee headed by Sen. Joker Arroyo virtually cleared yesterday the Government Service Insurance System (GSIS) for extending the P1.1-billion loan to the Public Estates Authority (PEA) that was used for the construction of the controversial President Diosdado Macapagal Boulevard (PDMB).

Sen. Rodolfo Biazon, author of the resolution calling for the Senate investigation, wanted to determine if the extension of the loan was within the charter of GSIS, and whether the loan would jeopardize the payment of existing benefits to GSIS members.

During the second joint hearing on the controversy, GSIS general manager Winston Garcia stressed that the loan was guaranteed an interest rate of 14 percent.

"This is above the present interest rate for Treasury bills. And if the PEA could not pay, we will not be at the losing end because the collateral for the P1.1-billion loan is worth more than P4 billion," Garcia said.

Arroyo said that the hearing panel does not see anything wrong with the GSIS loan.

"Even Sulficio Tagud said the GSIS loan was aboveboard," he said, referring to the PEA director who alleged that the PDMB project was overpriced by P600 million.

Tagud filed charges of plunder against the management and other board members of PEA, days after PDMB contractor JD Legaspi and the PEA board filed charges of extortion against him.

Arroyo said that his committee was proceeding with its investigation without regard to Tagud’s charges.

He did not seem to take Tagud’s charges seriously, as he said: "Speaking as a lawyer, I wonder if he would have gone ahead and filed the plunder case had he not been charged with extortion."

While it virtually cleared the GSIS of any wrongdoing, the Blue Ribbon Committee remained unconvinced that the PDMB project cost was aboveboard.

"All laws and regulations were followed in the project, but we remain unconvinced that a one-lane road could cost P26 million a kilometer," he said.

The committee got the P26 million by dividing the original project cost by the total length of the road, and then by eight lanes, Arroyo said.

He said that the committee already took into consideration the technical problems involved in building the road like digging deep to stabilize the land.

"But we still find the P26 million per kilometer very expensive," he added, citing his experience and observations during budget deliberations on road construction.

Ernest Villareal, PEA chairman, and Rodolfo Tuazon, PEA director, said that the P584 million original project cost and the additional cost of P126 million for the construction of a bridge and Seaside Drive were approved by the previous PEA board.

Arroyo said they may have to summon members of the previous board to explain the approval of P26 million per kilometer of a one-lane road.

The committee still has to schedule its next hearing.

Meanwhile, Public Works Secretary Simeon Datumanong said the name of contractor JD Legaspi Construction (JDLC), which constructed a section of the Macapagal road, came from a list of 10 provided by a former DPWH department head.

"That was what Mr. Arturo Santos said when I asked him about this. That he gave a list of Large B contractors in buildings," Datumanong told The STAR in a telephone interview.

The DPWH secretary also insisted that "there’s no scandal" in the department in relation to the PDMB.

Santos was the chief of the Special Buildings Project Management Office (SBPMO) that furnished PEA a list of contractors in response to a request of PEA deputy general manager Manuel Berina Jr. for such a list.

Datumanong said he has ordered the DPWH legal division to investigate the incident after documents obtained by The STAR showed that it was Santos who furnished the PEA the list of contractors.

JDLC, owned by Jesusito D. Legaspi, was the contractor that built 2.3 kilometers of the five-kilometer PDMB, which PEA director Tagud said was overpriced by some P600 million.

For his part, Legaspi’s lawyer Napoleon Poblador disputed The STAR’s story last Monday that said JDLC should have been disqualified from the bidding because it had not yet completed a project worth at least P250 million, or half the proposed project cost of PDMB.

"The premise of the story is wrong. Based on PEA pre-qualification documents and requirements, it was necessary for the bidder to have an aggregate of accumulated projects of P250 million and not just on a single project," he said.

The militant Anakbayan group meanwhile staged a "kariton drag race" at the PDMB to "represent the economic crisis being experienced by the Filipino youth and urban poor."

They said the money could have been put to better use such as youth’s education and people’s social services.