Iligan terminates P600-M market construction deal due to work delays

ILIGAN, Philippines – Iligan Mayor Frederick Siao terminated a nearly P600-million contract for the design and construction of a new city public market due to several delays that reached nearly a year.

The deal, amounting to P583.4 million, was made by the city government with the Tacloban City-based construction company BM Marketing for the design and construction of the New Pala-o Public Market on February 13, 2020, during the administration of former mayor and now Iligan Representative Celso Regencia.

The company has already completed about 65% of the project, and was already paid about half the cost, officials said.

The plan is to build a modern two-story market with greenery on the roof deck, a floor area of 2,218 square meters, 1,269 market stalls, and 132 parking spaces in Barangay Pala-o to replace the old market that was built in 1960.

Siao denied the contractor’s motion for reconsideration, saying it was a decision reached after an evaluation of the construction company’s performance.

He also said his decision was not influenced by partisan politics. Siao and Regencia don’t see eye to eye and are not political allies.

Officials said city hall gave BM Marketing a notice to proceed with the project on February 20, 2020, with August 19, 2021, as the target completion date. 

Due to several delays, the project duration was extended to 858 calendar days with an adjusted completion date of November 3, 2022, officials said.

BM Marketing’s several requests for extension, however, were not entirely without bases and were mostly related to the government’s COVID-19 pandemic response.

The company was first granted a 74-day extension due to the issuance of an enhanced community quarantine (ECQ) order by Regencia in March 2020. Two subsequent extensions – one for 65 days and another for 68 days – were due to the modified enhanced community quarantine (MECQ) measures imposed in Iligan and after one of its workers tested positive for COVID-19.

The local government decided to terminate the contract after the contractor requested an extension for the 7th time. Its request for a 105-day extension was rejected by the city hall’s Project Implementation Unit (PIU). 

Engineer Leonor Actub, the PIU’s head, cited several acts attributed to BM Marketing, which caused the delay of the project, including the failure to apply waterproofing on the second floor of the building and executing changes on the plans without the approval of the local government.

Lawyer Roberto Padilla of city hall’s Contract Termination and Review Committee said officials conducted a thorough investigation into the matter and found that the company’s first six requests for time extension caused a total of 318 days of delay. 

Siao said he had to act because the Commission on Audit (COA) had called out the local government about the project, and recommended an evaluation of the contractor’s performance so it could be held liable for damages based on the contract. 

He said the termination of the contract will pave the way for the city government to look for a new contractor who can complete the project efficiently and effectively. – Rappler.com