COA tells MCIAA: Settle P110M project

CEBU, Philippines - The Commission on Audit (COA) is urging the Mactan-Cebu International Airport Authority (MCIAA) to decide on the fate of a P110M project that has experienced delay for seven years now.

In COA’s 2012 report on MCIAA, the commission took note of the Apron Extension project, which was undertaken as part of the preparations for the Association of Southeast Asian Nations (ASEAN) Summit held in Cebu in 2007.

The project, estimated to cost P110.8 million, was undertaken purposely to rehabilitate the apron extension of the airport. The project was said to be awarded to ARN builders.

But in June 2006, the contract was reportedly rescinded “due to some allegations of anomaly in the bidding, falsification of documents and in costing of the project,” the COA report states.

It states that “the authority suffered losses in terms of unrecouped mobilization fee of P16M from the Apron Extension project, which was shelved in 2006,” adding, that even after six years, the issue remains unresolved.

The COA also stated that the board and the management have not yet fully availed of the remedies to recover the funds advanced to the contractor as stated under Republic Act 9184.

Based on Section 59 of the Implementing Rules and Regulations of RA 9184, “any dispute or difference of any kind of whatsoever shall arise between the parties in connection with the implementation of the contract covered by the Act and this IRR, the parties shall make every effort to resolve amicably such dispute or difference by mutual consultation.”

It also stated that disputes arising from the implementation of the contract shall be submitted for arbitration as indicated under the Arbitration Law or the Alternative Dispute Resolution Act of 2004.

The COA learned in its investigation that an arbitration committee was created to assess the project, but the findings of the committee were put on hold after the contractor was not represented.

“One of the findings was that the contractor was obligated to reimburse the amount of P8M to MCIAA which was not concurred by the contractor.”

MCIAA reportedly sent demand letters to the contractor, the latest being on June 20, 2012, for the refund to be made within 30 days, otherwise MCIAA will be “constrained to avail of legal and other appropriate remedies to enforce its rights.”

In an interview with The Freeman, MCIAA General Manager Nigel Paul Villarete said the contractor still has not refunded the amount but MCIAA isn’t considering legal action just yet.

“We need to be very prudent on the right cause of action,” Villarete said.

He said they are requesting the Governance Commission for Government Owned and Controlled Corporations (GOCC) to ask COA for a special audit on two cases, including the Apron extension project.

The Governance commission was created to act as a “central advisory, monitoring, and oversight body with authority to formulate, implement and coordinate policies” governing GOCCs.

Villarete said that the Apron extension project and an issue on the administration building at the MCIAA property are two concerns they would want to be resolved as soon as possible.    

Villarete explained that they are pushing for the Apron Extension project since the subject area is where airplanes park. Expansion is necessary considering that more aircrafts land at the airport.

However, the issue with the contractor needs to be settled first, they said.

In their reply to COA, MCIAA stated “it is currently undertaking the appropriate steps in dealing with the issue by carefully going through the process of reaching a mutual agreement by the parties which will result to a less costly process.” — (FREEMAN)