hospitals in the Philippines

Cebu City government cuts ties with hospital developer

John Sitchon
Cebu City government cuts ties with hospital developer

CANCELLED CONTRACT. Cebu City Mayor Mike Rama found numerous flaws in the construction of the floors of the new Cebu City Medical Center building.

Cebu City PIO

Mayor Mike Rama says there will be no more public bidding for the construction of the Cebu City Medical Center's still unfinished floors

CEBU, Philippines – The Cebu City government and M.E. Sicat Construction, Incorporated, the project developer of the Cebu City Medical Center (CCMC) announced in a press conference on Wednesday, November 16, that they have canceled all contracted works at the hospital.

“The approach now is mutual rescission,” Jerone Castillo, the mayor’s special assistant on projects said.

With this, the city will only be paying the contractor the amount that corresponds to the percentage of work that it has done.

On April 6, the Cebu City government awarded the developer a P907-million contract to complete the shell of the 10 floors of the CCMC. 

The company pledged to finish the shell on October 28 and added that the third and fourth floors would be fully furnished and fully operational by then.

Over time, the company was able to construct the shell of the first seven floors but failed to meet the deadline for the remaining floors.

During several site visits, Rama also pointed out the lack of proper lighting in the main lobby and halls of the floors, some uneven ramps, and poor ventilation.

“I am impatient as to the full realization for our dream hospital, for the poor man’s hospital with a rich man’s service,” Rama said in a press conference on Wednesday, November 9, subsequently ordering the cancelation of their contract with M.E. Sicat Construction.

Currently, only the first three floors are operational with some portions not yet finished.

Based on data from the Department of Engineering and Public Works (DEPW) as of October 30, the developer has only accomplished 16.4 % of the contract, while incurring a negative slippage of 11.7 %.

CCMC’s history

In 2013, a strong 7.2-magnitude earthquake hit parts of Central Visayas, particularly in Bohol and Cebu. This quake caused heavy damage to a 4-story building where the CCMC used to be.

In 2014, Rama ordered the demolition of the CCMC due to it being structurally unfit. In 2015, the city government moved for the construction of a new hospital building and awarded the contract to C.E. Padilla Construction, which was tasked with completing the first and second phases of the hospital building project.

From 2016 to 2019, then-Cebu City mayor Tommy Osmeña postponed construction at the new hospital building due to issues with CCMC’s building permit. 

It was only under the term of the late mayor Edgardo Labella that construction continued. The city spent P566 million for phase 1, P300 million for phase 2, and P100 million for phase 3.

On December 28, 2020, the hospital finally opened the first to third floors but operations were delayed due to an issue with its occupancy permit.

During Rama’s new term in 2022, the mayor went on an “investment begging” round, pitching plans to improve the CCMC and other infrastructures to the heads of private companies, including telco tycoon Manny V. Pangilinan.

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No more bidding

According to Castillo, the city government will still follow due process in the cancellation of the contract and will be forming a special committee for the legalities of the procedure.

“Our basis is the guidelines on the termination of contracts, which is a Government Procurement Policy Board (GPPB) resolution. This is part of Republic Act 9184,” Castillo said in a press briefing.

The resolution states that the failure to comply with the instructions of the procuring entity justifies the termination of a contract.

Due to the many delays and failure to construct the CCMC on time, Rama announced that there will be no more public bidding for the construction of the final hospital floors.

“We will resort to a certain arrangement. If there is a will, there is a way,” Rama said.

The mayor mentioned that he already plans to work with another entity for this arrangement but will not be disclosing the name yet for “safety reasons”.

As of this writing, there is no target completion date for the final floors of the CCMC. 

The DEPW reported that the total running cost for the new CCCM project is projected at nearly P2 billion. –

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