In a 36-page comment, Ombudsman Simeon Marcelo said the contract sought for approval by petitioners Frisco San Juan and Manuel Beriña, along with other government officials, was "fatally flawed as it was tainted with numerous patent irregularities."
"In view of this, those responsible for approving and pursuing the execution of the private contractor must stand trial," Marcelo said.
The Ombudsman maintained that the PEA officials committed a crime when they paid more than P837 million to contractor JD Legaspi Construction for a mere 2.3-kilometer asphalt road.
It likewise noted that other contractors — Shoemart Inc. and Wenceslao/R-I Consortium — spent only P300 million in building the remaining portions of the road, including two bridges, which are more than half of the project.
PDBM is a 5.123-kilometer, eight-lane boulevard.
Despite the flaws, the Ombudsman said San Juan and his co-directors proceeded to execute and implement the contract.
On Oct. 3, 2002, a criminal complaint was filed by Sulficio Tagud Jr., PEA board member, and several non-governmental organizations (NGOs) against senior PEA officials, namely: Beriña, Jaime Millan, Bernardo Viray, Raphael Pocholo Zorilla, Theron Lacson and Christina Mortel; PEA’s new board members Joemari Gerochi, Martin Sanciego, Angelito Villanueva and Rodolfo Tuazon; and auditors from the Commission on Audit, including Gloria Cornejo, Arturo Layug, Benilda Mendoza and Manuela de la Paz for the approval and implementation of the PDMB project.
On Dec. 18, 2002, a supplemental complaint was filed to include as respondents, San Juan, the chairman of PEA’s old board and the directors, other PEA officers, the Board of Trustees of the Government Service Insurance System (GSIS) and former chief presidential legal adviser Avelino Cruz.
A total of 27 members of the PEA board, including San Juan and Beriña, and the Commission on Audit were found to be liable by the Ombudsman for violation of section 3 of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.
Charges have been filed against them before the Sandiganbayan.
Cruz and the GSIS officials were, however, exonerated by the Deputy Ombudsman for lack of basis as to their participation in the implementation of the project.
In its comment, the Ombudsman said that the anomalous implementation of the project made the "said portion (of the PDMB constructed by the JD Legaspi Construction) undoubtedly one of the most, if not the most, expensive roadway ever built in the country."
The Ombudsman cited the errors in carrying out the project including the fact that in the initial stage, there were no available funds yet to finance it.
But the Ombudsman said San Juan proceeded to seek approval for an alternative mode of simplified bidding due to alleged extreme urgency.
"The truth was, there was no such extreme urgency since the loan meant to finance the project was still pending approval by the Land Bank of the Philippines at the time of the actual bidding process," the Ombudsman said.
The Ombudsman added that the project lacked the necessary appropriation and certificate of availability of funds, noting that when the P584.3 million contract between JD Legaspi and PEA was signed on April 10, 2000 only P300 million was available for the project.
The Ombudsman further said that the concerned PEA officials tried to circumvent the law by dividing the contract into two phases to circumvent the requirement on appropriation and availability of funds.