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ANDAYA: HOUSE TO SEEK AMLC HELP IN PROBE OF SORSOGON GOV’T CONTRACTS



Naga City, Camarines Sur - House Committee on Rules Chairman and Majority Leader Rolando Andaya, Jr. on Thursday said he is inclined to seek the help of the Anti-Money Laundering Council (AMLC) in the House of Representatives investigation on the government contracts in Sorsogon province worth P551 million in 2018. 

In his opening statement during a public hearing held here at the Avenue Plaza Hotel, Andaya said he will request for all the bank transactions of C.T Leoncio Construction Trading and Aremar Construction, the favored local contractor who bagged contracts for the 1) Barcelona-Casiguran Diversion Road worth P96 million, 2) a tourism road in Bulusan National Park worth P115 million and 3) the section of Daang Maharlika Road in Sorsogon worth P289 million.

Andaya showed a piece of evidence given to him by a certain contractor. A Land Bank of the Philippines (LBP) deposit slip from a contractor who won the bidding for a project in Bicol.

“After release of funds from the DBM (Department of Budget and Management), the winning contractor deposited the money to the real contractor of the project which is Aremar Construction. Look closely at the deposit slip, a total of P11,416,374 found its way to the bank account of Aremar on October 4, 2018,” said Andaya. 

Prior to the public hearing, Andaya said the House Committee on Rules and his office conducted research and discreet investigation on questionable budget allocations and practices of the DBM under Secretary Benjamin Diokno.

“We have uncovered startling revelations. Today, we invited a contractor and several Department of Public Works and Highways (DPWH) officials still in active service or retired, to further shed light on what we have uncovered so far. We expect full cooperation and full disclosure on their part,” said Andaya.

“A word of caution, though. We remind our resource persons that they are testifying here under oath. Hindi po puwede ang pagsisinungaling dito sa public hearing natin ngayon,” he stressed.

Andaya said what the resources persons will say will be matched with documents in their possession.

“Based on the paper trail that we have established so far, we will know who is lying and who is telling the truth,” said Andaya, a CPA-lawyer.

He said they have uncovered disturbing patterns in the manner that the DBM now allocates and disburses public funds. The most glaring is the allocation for flood control projects.

Andaya emphasized that Secretary Diokno, not President Duterte or DPWH Secretary Mark Villar, who “masterminded” the P75 billion insertion in the 2019 budget.

“Malinaw ang lumalabas sa mga datos. Bumabaha ang pondo galing sa DBM papunta sa DPWH para sa mga flood control projects. Bilyung-bilyong piso ang ginagastos dito galing sa buwis ng mamamayan. Sabi nga ni Secretary Diokno dahil daw ito sa climate change. Ngayong araw, malalaman nating kung talagang climate change ang rason kung bakit lumolobo ang budget na inilalaan ni Secretary Diokno para sa flood control projects. May iba pa bang dahilan?” said Andaya.

Since 2017, Andaya said DBM allocated at least P79 billion to the DPWH for flood control projects. In the next year, the fund ballooned to P134 billion, which is a 70 percent increase amounting to P55 billion.

In 2019, the DBM allocated a much lower fund for the flood control projects of the DPWH.

“Ibinaba ang pondo sa P119 bilyon dahil daw sa cash-based budgeting system. Pero kung papansinin ninyo, halos 20 percent naman ito ng kabuuang budget na inilagay ng DBM sa DPWH. Ganito ka-importante ang flood control projects para sa DBM,” Andaya said.

Almost equal to the Network Development Program, (is the) P122.9 billion used for the construction of roads and bridges. “Double the amount allocated to maintenance funds or what the DPWH calls Asset Preservation Funds (APF) of P59 billion,” he said.

What initially caught the attention of Andaya was the huge allocation for Sorsogon province which, in 2018 alone, got P10 billion worth of projects from the DBM.

“Marami dito, napansin din namin na P6 billion pa rin ang ibubuhos ng DBM sa Sorsogon para sa 2019,” said Andaya.

Andaya stressed that a close scrutiny of C.T. Leoncio projects also yielded an interesting result. He said they found out that C.T. Leoncio’s major partner for Bicol projects is Aremar Construction. Four of its blue-chip projects are in partnership with Aremar.

Engineer Virgilio Eduarte, Regional Director of the DPWH Region 5 Office said they held the bidding under post qualification and evaluation of documents.

Eduarte said that Consolacion Leoncio, owner of C.T Leoncio Trading and Construction did not join the bidding for the projects in Sorsogon. 

Minority Leader Danilo Suarez asked if the bids and awards committee (BAC) of the DPWH is guided by guidelines especially on the net financial contracting capacity (NFCC) of a contractor.

Engineer Merla Raveche, BAC Chairman for the First District of Sorsogon, said that during the processing, the BAC Central Office is the one issuing the NFCC and the eligibility process before they open the envelope of the winning bidder.

“In effect, when we talk of net financial contracting capacity, even Triple A, kahit sila Consunji or EEI will be guided by this. And if you will be awarded by billions of pesos in contracts, it will be physically impossible watching the contractor na sabay-sabay na gagawin ang project na ito kung hindi nila masa-satisfy yung net financial contracting capacity,” said Suarez.

He said the capacity to handle the financing simplifies the assurance and the protection of the government that the contractor is bonafide and can finish the project and not jeopardize the interest of the government.

“So, napakaselan nitong net financing contracting capacity,” said Suarez. 

The hearing is based on House Resolution 2104 and the privilege speech of Andaya delivered on December 10, 2018, seeking an inquiry on the legal basis and possible effects of the shift from obligation-based to a cash-based budgeting system as proposed by the DBM for the fiscal year 2019 national budget.

Other lawmakers present during the hearing were Senior Deputy Majority Leader Rodante Marcoleta, and Reps. Anthony Bravo and Gabriel Bordado.

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