MANILA, Philippines – The Commission on Audit (COA) questioned irregularities in the purchase of P2.577 billion worth of firetrucks by the Bureau of Fire Protection (BFP) in 2015, over a hundred of which were found to be defective.
Of the 469 firetrucks that the BFP bought from a Chinese supplier in 2015, 176 units had dozens of defects, acoording to COA’s audit report released on Wednesday, June 21.
The defects include damaged side mirrors, defective door locks, and problems in the units’ safety features such as the air brake system. Some of the engines shut down while operating, and the trucks swerve and accelerated by themselves.
COA said the BFP’s purchase was irregular because of questions on whether the Chinese supplier had 60% Filipino ownership as required by the law. COA also scored BFP for choosing the firetruck models over a reliable brand.
Deliveries of the units were also delayed, according to COA, yet the BFP has not collected penalties from the supplier over the violations.
BFP awarded the contract to the joint venture of Philippine partner Kolonwel Trading and Hubei Jiangnan Special Automobile Company Ltd of China. BFP bought 244 units with 1,000-gallon capacity for P6 million each, and 225 units with 500-gallon capacity for P5 million each.
When defects were found, the supplier sent a letter to the BFP dated December 16, 2016, to say that repairs were being done. At the time, many of the firetrucks havdbeen deployed to stations from Regions 1 to 13.
COA said the problems had yet to be addressed.
“As of May 9, 2017, 107 trucks are still to be repaired by the Supplier. The Audit Team Leaders of the BFP Regional Offices 1, 6, and 11 issued AOMs (Audit Observation Memorandum) on reported defects in the fire trucks and observed that the defects would affect the capability of the end-user regions to efficiently respond to emergency cases,” it said.
On the suppplier’s “questionable 60% Filipino ownership/interest,” COA said the local partner only declared assets of P1.4 million in 2012, and P1.6 million in 2013. For COA, this raises questions on Kolonwel’s financial capacity to take on the P2.5-billion project.
“Under their agreement, the parties shall contribute the amount of P100,000,000 as initial funding requirement of the joint venture whereby Kolonwel shall put up P60,000,000 of 60% thereof,” the COA noted.
COA added: “Considering Kolonwel Trading’s assets, the financial capability to contribute the P60 million to the joint venture is highly questionable. This casted doubt the 60% Filipino interest in the JV, affecting its eligibility to participate in the public bidding.”
Budget too low
COA questioned BFP for not buying the Australian brand it had purchased before. These units performed well and did not need frequent repairs.
COA pointed out that the problem was due to the budget set too low. The budget limit effectively prevented other brands, particularly those from Europe, from participating in the bidding though they offered quality units.
“The setting of low ABC for the procurement of the fire trucks restricted competition and it did not allow the participation of suppliers of known quality and of international standard,” COA said.
COA added: “The delivery of such defective firetrucks could have been prevented had there been judicious and meticulous planning in the procurement.” – Rappler.com