Ebdane blames inflation, bad weather for P12.7-B cost overruns

MANILA, Philippines – Public Works Secretary Hermogenes Ebdane Jr. defended yesterday his department against accusations that it contributed to the P31.15-billion worth of cost overruns for foreign assisted projects.

A report by the National Economic and Development Authority (NEDA) said the Department of Public Works and Highways or DPWH accounts for 40 percent or P12.7 billion of the cost overruns.

“Among the factors is the recentness of the project. Some of the projects were programmed in the 1990s and the cost of materials then were way different from what we have now. There are also some projects which fell victim to calamities like the ones in Baguio,” he said.

He said some projects were delayed by court cases.

“Some court cases dragged on for years and while the court cases were being heard, we were not able to use the equipment but we still needed to pay for the idle time,” he said.

Ebdane also said that despite World Bank’s recent approval of a $232-million loan for the 2nd phase of a national road improvement program, bidding for the project will begin in July only after the names of the blacklisted companies are known. Approved for WB loan is the National Roads Improvement and Management Project or NRIMP 2.

Ebdane said the Ombudsman will furnish them with a list of contractors who are being investigated in connection with the alleged bid-rigging from 2003 to 2006.

“We have not yet been given a list of contractors. The WB gave it to the Department of Finance (DOF), which in turn forwarded it the Office of the Ombudsman,” he said.

“We would know the names of the companies included in the list by June. That is why, the bidding process was set in July,” Ebdane said.

WB country director Bert Hoffman announced on Tuesday the approval of the loan.

“The project aims to develop an extensive road network that will enhance local competitiveness, help promote economic growth, and provide adequate all-year reliable and safe access throughout the country,” Hofman said.

He added that poor provinces and the “conflict-affected” areas in the Visayas and Mindanao would greatly benefit from the loan.

The project involves among others the upgrading of the 22 kilometer Surigao-Davao Coastal Road; rehabilitation of the 30 kilometer Surigao-Davao Coastal Road; upgrading of a 29.2 kilometer secondary national road in Magapit-Sta. Ana in Luzon; and the rehabilitation of an 81-kilometer road in Digos-Cotabato City.

Ebdane said they have modified the ceiling to accommodate more bidders.

“We have repackaged between P500 million and P600 million – more local contractors can qualify. We have leveled the playing field,” he said.