COA: ‘Many questions’ on Makati building

MANILA, Philippines – Commission on Audit (COA) Chairperson Grace Pulido-Tan said her agency has “many questions” about the allegedly overpriced “parking building” in Makati.

In the second Senate hearing on the building on Tuesday, August 26, Tan said COA will complete next week the team of auditors who will conduct a special audit on the 11-story building alleged to be overpriced by P2 billion ($45.67 million*).

Yet this early, Tan said COA already has many questions after its “cursory review” of the inspection report made by the resident auditor and technical audit specialists on the building. One issue involved the construction of the building done in 5 phases.

“The difficulty is the phases are not defined. What is phase 1: structural? Is phase 2 just for outfitting, and phase 3 is for finishing? We don’t know. We don’t know what specifications they are evaluating for each of these phases,” Tan said.

Vice President Jejomar Binay and his son, Makati Mayor Jejomar Erwin “Junjun” Binay Jr, are the subjects of the Senate inquiry and they face a plunder complaint for the alleged overpricing. The building was first constructed when the elder Binay was Makati mayor in 2007 and was completed when his son was local chief executive in 2013.

Tan pointed out that the inspection report indicated that phase 2 was for “structural works from ground floor to the 11^th floor.” She said, “Then in all 5 [phases], there was a component for structural works so how many times did you do structural work?”

The COA chief added that there were items of work deleted but with no change in the contract. “We don’t know the value of the deletions because they are not specified.”

Tan also said that in phase 3 in 2011, the inspection report noted that the project was already “habitable and ready for use” with general cleaning necessary after the city government appropriated P1.5 billion ($34.26 million). Still, the project continued with phases 4 and 5 and an additional P1 billion ($22.82 million) appropriation.

“Kung phase 3 pa lang, habitable, ready for use, magkano lang dapat naidagdag? Bakit P1 billion pa? I am just asking these questions because these are the same questions we’re asking.” (If it was already habitable, ready for use by phase 3, how much more did they have to add? How come it was P1 billion more?)

Tan said she was “embarrassed” that the COA technical auditors could not answer the questions of the senators on standard engineering terms and specifics on the pricing of the Makati building.

“But it’s not fair to put the onus on COA because this is the system they have been working [with] when they came in. Our program is to enhance the capacity of the people but it’s difficult to do because the matter is technical. We are reviewing what they did,” Tan said.

She added that COA is consulting with experts for its special audit but “we are having a hard time because not many people want to be included in this topic.” Tan denied last week that the COA issued a certification that the building was reasonably priced. 

The mayor of the country’s financial center for 21 years, Vice President Binay is running for president in 2016 and has been leading surveys with a wide margin. His son was unable to attend the hearing “for personal reasons.”

‘Not green building, not world class’

In the hearing, Makati Assistant City Engineer Line Dela Peña said the cost of the building’s foundation, P310,720,628.61 (about $7 million), was based on the city government’s computation of the approved plans, specifications and quality of materials.

Yet Senate Majority Leader Alan Peter Cayetano again said that Makati and the COA auditors should have checked the structures that contractor Hilmarc’s Construction Corporation did also near the Pasig River. Mayor Binay cited the location of the Makati building as a factor in the price of the building because the soil was “soft.”

Cayetano though said that Joya Lofts and The Grove in Rockwell near Pasig River did not cost as much as the price of the final Makati building worth at least P2.2 billion ($50.24 million).

Cayetano told the auditors: “Why did you not ask? It was the same contractor with the same soil conditions. ‘Di niyo tiningnan, kasi lakaran? That’s what upsets me. ‘Pag pera mo, bawa’t singko sisiguraduhin mong sulit pero pag pera ng gobyerno, ‘di bale na.”

(You are not checking. If it’s your money, you’ll account for the last peso but when it’s government money, we take it for granted.)

Cayetano then sought to disprove the claim of Mayor Binay that the structure was expensive partly because it was a “green building.”

He ticked off the qualities of a green building, some of which Dela Peña said, included having a daylight harvesting and control system. Still, the city official said the building does not harvest rainwater. In the end, she conceded that the building did not have a LEED certification by the Green Building Certification Institute.

To show that the building was not “world class,” Cayetano presented photos that he asked his staff to take. He said the pictures showed that the parking system was not operational, the parking area was dark, and the metal beneath the windows in the bathroom was already rusting.

“Maganda siya for a government building pero world class palusot.” (It’s good for a government building but it’s a world class excuse.) 

A member of the Nacionalista Party of former Senator Manny Villar, Cayetano has announced he is running for president, going up against the elder Binay.

‘Beijing Olympics factor in high price’

The contractor of the building said there were reasons why it was pricey. Engineer Robert Henson, Hilmarc’s Construction Corporation president, said the building had “green features” like LED lights.

“The building has a 100% power back-up, not like an ordinary building with selective power. LED lights are initially expensive but investment-wise, you save more because consumption is more efficient. Finishes also had high specifications like laminate doors, a carpet, granite, and the walls we used for the exteriors were not ordinary concrete,” Henson said.

Upon questioning of Binay ally Senator JV Ejercito, Henson added that the cost of metal during the time of construction was 3 times more than the ordinary because of the 2008 Beijing Olympics, which supposedly made steel in demand due to the creation of the Bird’s Nest or the national stadium.

This statement drew a retort from Senator Antonio Trillanes IV, who like Cayetano had expressed interest in running for higher office in 2016. Trillanes recommended that Henson and Hilmarc’s be included in the plunder case.

“You are blaming the Olympics for the spike in materials? So Olympics is now the line of Makati? Engineer Henson, I hope you know what you are doing.” 

Hilmarc’s is set to give its full presentation in the next hearing. – Rappler.com