CAGAYAN DE ORO CITY WATER DISTRICT BOARD OF DIRECTORS PAYMENT TO CONTRACTOR "OVERPRICE" CAGAYAN de Oro Water District (COWD) paid over P21 million to a contractor despite insistence by its own projects managers that the amount was hugely inflated by as much as much as 400 percent. In 2007, COWD paid P21,837,065.94 to Geo-Transport and Construction Inc. (GTCI) for price escalation requested by the latter involving an expansion project in 2002. A computation by water district engineers involved in the project, however, placed the cost of price escalation at P5,511,989.82. Price escalation refers to the increase in the contract price during the project implementation on the basis of the existence of “extraordinary circumstances,” which include calamities and sudden increase in prices of construction materials. The GTCI’s price escalation request, made sometime in 2006, originally stood at over P49 million. However, COWD department heads assailed the contractor’s computation as “erroneous.” When GTCI eventually settled for P21.8 million, the water district’s technical department remained unfazed, insisting that GTCI had used a computation formula that was not found in the 2002 contract. Assistant general managers Ray G. Tablan, Bienvenido V. Batar Jr. and two other department heads reiterated their position in at least three letters addressed to then Cowd general manager Gaspar Gonzales Jr. In a letter dated April 20, 2006, the project managers told Gaspar that GTCI’s P21.8 million computation did not “adhere to the provisions of the contract” because the contractor based its price escalation request on a method that was never stated on the contract. “The averaging method is extremely irrational and the use of the price indices of Steel Reinforcing Bars for the price adjustment of Steel Pipes is absolutely inappropriate,” the COWD department heads said. Gaspar again received a letter from Cowd engineers on September of the same year, this time questioning the Board and the management’s decision to stick with GTCI’s inflated computation despite series of evaluations pointing to the contrary. “We just cannot comprehend why we could possibly let GTCI apply the price index of “Reinforcing Steel” to “steep pipe” when the price index for metal pipes is available.” the Cowd department heads said. They also pointed out that there was neither “written amendment nor supplemental agreement” to warrant the excessive payment. On top of this, the noted that price escalation cost could have not reached the amount as claimed by the contractor since “there was a decline of price for metal pipes in December 2003.” The department heads’ position was bolstered by then Local Water Utilities Administrator Deputy Administrator Emmanuel Malicdem, who said the price index used by GTCI was based on the total contract price. Malicdem said the correct escalation cost can be arrived by using the “periodic computation of escalation, using the approved formula and indices by the National Statistics Office—as what the Cowd department heads had done. “The contractor should therefore submit their request for escalation based on the above provisions and submit the same for evaluation,” Malicdem told Gaspar and the Board in a February, 2006 letter, All these, however, apparently fell on deaf ears. The Board of Directors on January 17, 2007 issued a resolution paving way for the release of the P21.8 million payment to GTCI. The members of the Board who signed the resolution were: then chairman Raymundo Java, Joel A. Baldelovar, Sandy R. Bass Sr., Bibiana C. Sarmiento and Soc Anthony Del Rosario. Except for Java who retired in 2008, Baldelovar, Bass, Sarmiento and Del Rosario are still sitting in the Board. Like · · Unfollow Post · 8 hours ago near Cagayan de Oro · Edited Louis W. Raypon likes this. Arma Legis dha daun musulod ang kickbacks ihatag sa board ang subra 8 hours ago · Like Clarita Hallares unbelievable! what corruption! 8 hours ago · Like Zen Reynes Is there anybody who filed a case? Or else it will just be history ! 7 hours ago · Like · 1 Emmanuel Mulawan @ Zen Reyes (HELP CDO): I am grateful satisfied because the Office of the President answer my long time complained the alleged anomalies of the COWD BOD and BWSP Contract and COWD BOD anomaly thru the Presidential Legal Affair Ronaldo A. Geron, Underse...See More 3 hours ago · Edited · Like · 2 Emmanuel Mulawan @Juan Dela Cruz corruption is in every corner of COWD BOD, heared regarding a welding machine worth 800k on canvass... a board resulotion....wallaaah.... now its worth 1.9M.. for 1 unit welding machine. is it true mr. mulawan? This is a publicly knowledge that COWD BOD Resolution No. 233, s-05 dated October 17, 2005 .... for 1 unit welding machine worth 1.9 Million but the actual canvass during that time is worth 800 Thousand only the same Welding Machine Unit and Specifications? Let the public and COA to decide...
Posted on: Sat, 08 Jun 2013 10:23:08 +0000
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