MANILA, Philippines — The Commission on Audit (COA) has again chided the Department of Public Works and Highways (DPWH) over its failure to address delays in the implementation of billions of pesos in infrastructure projects and to ensure that those completed were technically sound and compliant with project contracts.
In its 2019 annual audit report on the DPWH, the COA noted that of the 2,411 construction projects amounting P101.6 billion, implemented by DPWH offices from 2015 to 2019, there were 1,740 with total cost of P65.9 billion which “were not finished nor completed within the specific contract time or required completion date.”
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54 projects overdue
The audit body said that 54 of these unfinished projects, with total contract cost of P607.8 million, have already incurred delays that exceeded the allowable 10% of the specified original/revised contract time.
“However, [DPWH] Management did not rescind/terminate the contracts nor impose liquidated damages to the contractors concerned as required under the rules and regulations,” the COA said.
The COA's records also showed that 81 projects amounting P3.2 billion have not even started at all, while 550 projects amounting P31 billion were suspended due to various technical and legal issues and 40 projects amounting P1.4 billion were terminated.
The projects include regular infrastructure, school buildings and farm-to-market roads.
The COA said that because of the delays, the government has already incurred P101.405 million in commitment fees for the foreign-loaned projects.
The DPWH cited several reasons for the delays, suspension or termination of the projects, among which were typhoons and unfavorable weather conditions; peace and order situation; road right-of-way (RROW) issues; pending issuance of permits and clearances from various government agencies; modification of plans, design and program of works; modification or non-availability of project site location; insufficient manpower; lack of equipment; difficulty in hauling construction materials; scarcity of materials in the locality; inaccessible project site for heavy equipment; inadequate project supervision and monitoring; and delayed release of funds.
The COA, however, said that aside from the typhoons or unfavorable weather conditions, all the other issues cited by the DPWH could have been avoided had the agency conducted proper coordination with the local government units (LGUs) and had undertaken detailed feasibility and engineering study – a primary requisite for each infrastructure project under Republic Act 9184 or the Government Procurement Reform Act and its Revised Implementing Rules and Regulations (RIRR).
"Inadequate detailed engineering due to absence of proper coordination mechanism with LGUs, and other concerned agencies, and failure to establish the technical viability of the projects during the feasibility and preliminary engineering study, resulted in delayed completion and non-implementation of projects... contrary to Paragraphs 1, 2, and 8 of Annex A of RIRR of RA 9184, and agreed terms and conditions of the contract," the COA said.
The COA noted that the issues regarding the high number of delayed, suspended and terminated infrastructure projects were already brought to the attention of the DPWH in the 2018 annual audit report "but were not properly addressed by Management and remained unacted (upon)," hence, the continued "recurrence of delays" in the project implementation.
Defective projects
Furthermore, the audit body noted technical defects in at least 461 completed infrastructure projects, equivalent to a deficiency cost of P376.13 million.
"Inspection of various infrastructure projects conducted by the COA – Technical Audit Specialists during the year revealed that there were defects/deficiencies including items of work which were not in accordance with the standard specifications of the contracts," the COA said.
Most of the defects were observed in various school buildings such as cracks on walls, ceiling and flooring, leaking pipes and water tanks and defective electric outlets, among others.
Defects were also noted in road projects and several multi-purpose buildings, such as failure to adhere to the as-built plans, uneven pavements and presence of cracks and scaling.
"The above defects/deficiencies will result in the wastage of government funds and property if not corrected by the contractors in due time," the COA said.
The COA said similar observations were already raised by the technical audit team in 2018 but remained unacted upon by the DPWH.
The COA warned that it might be forced to issue a Notice of Suspension or Notice of Disallowance against the projects if the DPWH would fail to require the concerned contractors to rectify the defects. The COA added that the DPWH must blacklist those who will refuse to take the necessary corrections.
In a reply incorporated in the audit report, the DPWH said it has already sent demand letters and notices to contractors to fast track the project completion and to observe the timelines during project implementation.
The DPWH also said that the defects and deficiencies observed by the technical auditors were already relayed to the concerned contractors and assigned project engineers for the implementation of proposed corrections and rectification.
"Several rectifications have already been made and liquidated damages imposed/collected," the DPWH said.