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Aumentado lambasts NEDA for costly dam
« on: June 14, 2007, 01:21:42 AM »
The Bohol Chronicle
June 13, 2007

Gov. Erico Aumentado is blaming the National Economic Development Authority (NEDA) for "not finding remedies to the cost over-runs" of the P2.3 billion Bohol Irrigation Project Stage-2 (BHIP 2) when they had the chance to do so three years ago.

The governor likewise expressed disappointment that NEDA Director Romulo Neri is "too late" in raising his objections to the project considering it is already 80% completed.

"They waited until this time when they should have ordered to seek for remedies when they knew the costs were already disadvantageous to the government," Aumentado stressed.

It may be recalled the NEDA chief is blocking further fund releases to the irrigation project that will benefit some 5,000 farmers in the towns of San Miguel, Trinidad and Ubay, saying the project over-runs as "excessive and illegal."

The National Irrigation Authority (NIA) submitted a request for the expansion and change order of the BHIP-2 sometime in December 2004 due to adjustments in the peso-to-dollar exchange rate, Aumentado bared in an interview over dyRD's Pulso yesterday.

When the dam project was adopted on December 1999, with a loan package funded by the Japan Bank for International Cooperation (JBIC), the peso-dollar rate was P40 to $1, the governor pointed out.

In 2004, the exchange rate was already P54 to a dollar, Aumentado said, which prompted the NIA to request for a change order.

According to the governor, if NEDA had acted decisively, corrective measures would have been undertaken.

Instead, NEDA was "sitting on the request of NIA" and without any advisory, the project contractor, Hanjin Heavy Industries and Construction Ltd. was bound to complete the project works, hence, the unpaid P600-million to the contractor, Aumentado disclosed.

"The NEDA is definitely contributing to this error," he said.


Socio-economic Planning Sec. Romulo Neri, NEDA head and co-chairman of the Investment Coordination Committee (ICC), based on his previous statements to Manila media, was apparently not satisfied with the explanation from NIA on the huge over-runs in millions of pesos.

The ICC acts as the "oversight" committee of donor-countries or agencies for projects they fund in the Philippines. Any ODA-funded project in the country cannot proceed farther based on a higher cost than originally approved without prior reappraisal and approval of the ICC.

Neri, who is said to have visited the project area thrice already was quoted as saying: "They violated legal procedures. They should have gotten back to the ICC (for clearance)… they should have cleared it first with NEDA…" "The analysis of (the project's viability) is very wanting. Since we know the cause of the over-run, I want to know how they would justify it."

Business Mirror, a Manila based daily, quoted an unnamed NEDA official as saying: "There are a lot of issues to be resolved… The investment body (ICC) must be satisfied with the explanations regarding the accruals outside the project cost." Neri earlier raised possibilities of a project stoppage and penalties for contractors and suppliers who continued with the work despite the cost increase.

The Project which was projected to irrigate some 5,300 hectares was originally set to be operational by year 2005, delayed by two years now.


Gov. Aumentado criticized Sec. Neri for trying to "single out" the BHIP-2 underscoring its 27% cost over-runs when, in fact, a similar irrigation project being undertaken by a Chinese contractor, BPIP-China, overshot agency estimates by 92%.

The NEDA (like the ICC) is a collegial body made up of senior officials of the Department of Finance, Central Bank, Trade and Industry, etc. and make decisions as a body. Likewise, Mr. Neri was quoted as saying that "The President has made it clear she does not want changes in the middle of (the implementation) of the projects."

The degree of care is consistent with the Government's aim not to antagonize donor-countries and agencies.

The NEDA had been aware of the BHIP-2 costs since even before its construction, NIA asked for a re-bidding since Hanjin's bid was much higher than the agency estimates, Aumentado added.

However, JBIC pushed that the contract be awarded despite its higher costs, the governor disclosed.

Since the irrigation project is undertaken with the aid of JBIC, it is subject to loan agreements between Japan and the Philippines under the ODA Law.

The governor refused to comment further on the matter while he bared NEDA is requesting the opinion of the Department of Justice (DOJ) regarding the matter. NIA also sought legal assistance from the Government Corporate Counsel.


The whistleblower of the anomalous Talibon dam felt his cause is vindicated by the recent blocking of NEDA Director Neri of further fund releases on the construction of the still unfinished dam.

According to Engr. Nilo Sarigumba, the contractor who exposed the P160-million Talibon dam scam, his fight to prosecute those responsible for the anomalous project has reached a high-ranking government official in the person of Neri, a Boholano.

Sarigumba bared over dyRD's Pulso yesterday that until now, the Ombudsman has not yet filed a case at the Sandiganbayan against five National Irrigation Administration (NIA) officials involved in the highly anomalous project even after prima facie evidence were found against them.

Sarigumba disclosed a major component of the dam project was ignored by NIA which is the reforestation of its watershed area. Without the reforestation, the dam will become a white elephant and farmers could never benefit from it.

Moreover, Sarigumba bared the dam is intended to irrigate rain-fed rice fields.

It is a shame for our government to be pursuing such project despite its many deficiencies and naming it as one of its flagship undertakings, Sarigumba concluded.


The National Irrigation Authority (NIA) is directly under the auspices of the Department of Agriculture (DA) headed by Arthur Yap, married to a Boholana and who enjoys the fullest grace with the President.

Unimpeachable sources said that Yap left the project site last May 24, fuming mad about the state of affairs of the project. He will reportedly advise the President not to attend the inauguration "to spare her the embarrassment."

Secretary Yap is currently building an Agriculture Highway across the nation, setting up irrigation facilities, storage capabilities and farm-to-market roads to uplift the productivity of Philippine agriculture. The Bayongan Dam, considered as the third largest irrigation dam in the country, is one of such projects.

This new controversy could spark further delays and threaten the completion of one of Bohol's so-called "Flagship Project." (With reports from Kit Bagaipo and Chito Visarra)


My initial comment: It was more than a P200-million Talibon Dam. It was inaugurated on NOVEMBER 1. Always NOVEMBER 1.

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