Dubious contractors escape government blacklist

By Joel M Sy Egco /Manila TimesOne of the 12 contractors of the Department of Public Works and Highways (DPWH) probed by the Commission on Audit (COA), for their alleged involvement in dubious projects funded by the Priority Development Assistance Fund (PDAF) or pork barrel of lawmakers, has been awarded big contracts, including the P4.7bn Bicol airport project of the Department of Transportation and Communications (DOTC).Despite their involvement in the questionable deals, the 12 have not been blacklisted.Sunwest Construction and Development Corp (SCDC), which is based in Bicol, won the contract to build the Southern Luzon International Airport (SLIA) in Daraga, Albay province in October 2012. The project, however, suffered hitches due to technical problems in the bidding process.The concerns raised by losing bidders prompted the DOTC to bring the case to the Office of the Solicitor General, which eventually gave the order for the project to proceed. The DOTC later issued a notice to proceed on August 6, 2013.The project was started during the time of former president and now Pampanga Rep. Gloria Macapagal-Arroyo. It was suspended for two years despite the release of P2.1bn from 2007 to 2012. Some P970mn was released in 2012 for the construction of a 2.1-kilometre runway while an additional P450mn was approved last year.More than P2bn more is needed to finish the project, covering expenses for earthworks, right-of-way, access road construction and preliminary detailed engineering.Plans for the SLIA include the construction of a 2,100-metre runway strip, control tower, passenger and cargo terminal, car park, fire station and other facilities. The airport will also have night landing capability and take-off facilities.Albay Gov. Joey Salceda, a major proponent of the project, hopes to see the airport finished by 2016.The SCDC, led by businessman Robert Uy, is among the 12 private contractors that COA chairman Grace Pulido-Tan said is under investigation for pork barrel-related anomalies that could dwarf the P10bn PDAF scam allegedly masterminded by businesswoman Janet Lim-Napoles.Tan said her auditors discovered that at least P16.9bn infrastructure projects bankrolled by PDAF of lawmakers and the Malampaya gas fund were either grossly overpriced or peppered with irregularities.The projects, implemented from 2009 to 2010 by the DPWH included SCDC involving a P1.9bn project; Antonio V Nidea Const (P845mn), DSB Const (P789mn), N-Four General Contr. (P25mn), Hi-Tone (P2.7bn), Three W Builders (P2.14bn), Ram Builders (P2.39bn), I and E Construction (P1.07bn), Algimar Const (P668mn), Ferdstar Builders (P822mn), Ritz Commercial (P614mn), E. Gardiola Const. (P3.59bn) and LMG Construction (P581mn).Interestingly, Manila Times learned that SCDC is only an affiliate of Hi-Tone.On its website, SCDC claims that it is a Triple “AAA” class construction firm in the Bicol region that “provides services in both construction and real estate. From horizontals to vertical constructions.”It started as Sunwest Construction and Supply in 1992 and was “just a mere affiliate of Hi-Tone Construction, and based in the Bicol Region.”“As part of its ‘technology and technical transfer’ strategy, Sunwest entered into several joint-venture projects with other established construction firms in the region, including its mother company, Hi-Tone Construction,” read SCDC’s company profile.“By 1996, Sunwest grew in leaps and bounds, so much so that it took over the management and operation, including the assets of Hi-Tone Construction.“With an expanded asset base, Sunwest has ventured not only into road construction and design, project management, real estate management and development, management and operation of sports and leisure facilities, and other construction-related industries,” it said.In separate interviews, Budget Secretary Florencio Abad and Presidential Communications Secretary Herminio Coloma Jr said the COA’s fresh discoveries require a deeper probe to determine, among others, whether the 12 contractors should be blacklisted.“We have to await the findings of COA, which will be submitted to the NBI-DOJ (National Bureau of Investigation-Department of Justice) for the determination of laws that may have been violated based on the factual findings,” Abad said in a text message to Manila Times.From there, he explained, the results of the DOJ-NBI fact-finding will go to the Office of the Ombudsman “for the determination of probable cause.”“Once the ombudsman resolves the issue of probable cause, then it files an information with the Sandiganbayan, which will then try the case. That’s the process through which this case has to go,” Abad explained.On the other hand, Coloma explained that the COA audit findings provide basis for a case build-up by DOJ and the ombudsman. The three agencies, according to him, are part of the Inter-Agency Anti-Graft and Corruption Committee (IAGCC) that is mandated to prosecute graft and corruption cases. Tan, Justice Secretary Leila de Lima and Ombudsman Conchita Carpio-Morales form the IAGCC and are dubbed by Malacanang as the “Three Furies.”When asked if the contractors also face being blacklisted, Coloma replied that DPWH secretary Rogelio Singson had begun blacklisting contractors that have not complied with government rules.But in a check with the Government Procurement and Policy Board, which oversees the performance of firms entering into government deals, this newspaper learned that all 12 contractors identified by Tan as having been involved in dubious DPWH transactions concerning PDAF, SCDC and Hi-Tone included, have not been blacklisted.Meanwhile, one of the 12 contractors, E Gardiola Construction, which was involved in a C5 Extension project worth P578.527mn, that was found to be lacking in funding cover, notice of award and contract. Some P200mn was released from the DPWH’s lump sum appropriation in 2009.Tan said there were defects in the construction, including cracks on the concrete sidewalk, curb and gutter; collapsed sidewalks; presence of potholes, pockmarks on the concrete pavement and settlement of the gutter as well  as concrete curb.She added that these were not rectified despite payment by the government of 98% of the contract amount.It has also been learned that Gardiola is owned by a couple Elmer and Elaine Gardiola, who got a P2.3bn contract from the DPWH during Arroyo’s time.A previous report by the Philippine Centre for Investigative Journalism (PCIJ) named Gardiola and JSG Construction, its sister company, as among the top 10 DPWH contractors in 2008.JSG, which won P5.7bn contracts from 2006 to 2008, is owned by Edwin Gardiola and his wife, Judy. Edwin and Elmer are reportedly brothers.The PCIJ report became the basis for the Bureau of Internal Revenue initiating a tax probe on the Gardiolas. It was already during the time of President Benigno Aquino that Edwin had not been paying the correct taxes based on luxury vehicles he bought in 2006.The BIR used the expenditure method in computing the tax dues of Edwin Gardiola who bought a BMW 74511 worth P4.75mn.Gardiola also bought a Lincoln Navigator, Lexus LX470, Volkswagen Coupe, Toyota Camry, Land Rover, Range Rover, Land Rover Freelander, Jaguar XKR 4.2 Coupe and a Kia Mohave totalling P35.12mn.Reports also showed that in 2012, Gardiola was slapped with charges of tax evasion and failure to file income tax returns.