MikeLigalig.com

By Fred Amora
www.theboholstandard.com

Malacañang always has the last say. Tagged as the most expensive project, the Bayongan Dam still gets fresh P700-M additional funds!

In a Memorandum dated August 29, 2007, Sec. Cerge M. Remonde, Director General of the Presidential Management Staff requested the Department of Budget and Management to provide his office copy of the release of P700-M for the Bohol Irrigation Project Phase 2, for payment to Korean firm Hanjin Construction’s outstanding collectible of about P650-million.

The payment is supposed to be the compliance of Pres. Arroyo’s directive to DBM made during her visit to Loboc, Bohol last Aug. 24.

Bohol Governor Erico B. Aumentado said he was shown a copy of the Memorandum during his meeting with Remonde the other Monday.

The Hanjin collectible is part of the controversial additional works for the construction of the BHIP-2 dam and the main lateral canals undertaken by Hanjin and the Korimoto Joint Venture in the amount of Ph1,485,912000.00 and Ph575,826,000.00 respectively.

During her last visit here, Pres. Arroyo assured funding for the completion of BHIP-2. The assurance came after Bohol provincial officials led by Gov. Aumentado and 16 irrigators association composed of 3,605 farmers pleaded with the President to complete the project. The Bayongan Dam is expected to irrigate an area of 5,300 hectares of rice fields in the towns of San Miguel, Trinidad and Ubay.

The fund release was also seen as a result of the Department of Justice Legal Opinion saying: “that the contracts involving the P1.246-billion BHIP-2 cost overrun/adjustment entered by the National Irrigation Administration are legal and valid.”

“The loan agreement taken in conjunction with the Exchange of Notes between the Japanese Government and the Philippine Government is an executive agreement,” pointing to the fundamental principle of international law of pacta sunt servanda,” DOJ pointed out.

Objection

Earlier, National Economic Development Authority (NEDA) Director General and Socio-economic Planning Sec. Romulo Neri blocked the further release of the P1.246-billion BHIP-2 cost adjustment requested by NIA labeling the cost overrun “illegal” and the project as “most expensive.”

Neri pushed for a proper breakdown of the cost increase and analysis of the variance. The works allegedly went ahead without clearance from the National Economic Development Authority (NEDA). Neri, who also co-chaired the NEDA Investment Coordination Council (ICC) was a key figure in the elite group of Pres. Arroyo’s economic recovery planners.

Aside from the increase of about 52% from its original project budget of only P2.3-billion, NIA also requested a 2-year extension for the BHIP-2 project.

Neri’s comments were likewise joined by OIC-Director, PMS Roderick M. Planta in his Project Evaluation Report dated October 26, 2006, submitted to NEDA-ICC, pointing that a more realistic assumption of using a 25-year life span of project facilities, and 75% O & M funding support yielded a marginal EIRR of 14.76% and negative NPV of PhP53,614 million.

Any further increase in cost or decrease in benefit will make the project unviable, the report said.

Planta also recommended that pending NIA compliance and Secretariat assessment of the robustness of the catch-up/sustainability plan (yet to be submitted), the 2-year extension request cannot be endorsed yet.

Curiously, a month later, Neri was removed from NEDA and transferred to the Department of Education, Commission on Higher Education (CHED).

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