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Corruption, politics, slippage mar many projects

By Malou Mangahas
and Karol Ilagan
Philippine Center for Investigative Journalism .

(Fourth of five parts)

This figure apparently had to go down during the term of President Benigno S. Aquino III, when then DPWH Secretary Singson initiated across-the-board cuts on project costs to minimize public funds being pocketed by officials. But then “tong-pats” merely morphed into “taripa (tariff),” or portions of project costs already earmarked for kickbacks.

One contractor recalled how he had to negotiate with a congressman and a local DPWH official to lower their rates to eight percent and two percent, respectively, and leave the contractor with a profit of at least another eight percent. In all, the three-part sharing scheme meant that 18 percent of project cost had already been set aside for taripa and profit, even before groundbreaking rites for the project.

Another contractor meanwhile confirmed that politicians also get “assistance” from contracting firms for their election or reelection campaigns.


on the rise

Behind closed doors and without paper trail, these deals unfold outside the purview of regulatory bodies, and beyond the formal scope of the procurement rules. Of late, legal loopholes have also allowed contractors and taripa-seekers to still corner contracts and commissions, resulting in fly-by-night firms winning some of the biggest projects.

In the last two years, an increasing number of “joint-venture” agreements have been sealed, providing a supposedly legal way-out for smaller contractors to win huge contracts — which they would not have qualified to get on their own — by “using” the license of bigger, much more established contractors.

On paper, both small and big contractors are expected to implement the project. In reality, on ground, only the small contractor gets the project and implements it. According to those privy to such arrangements, a “royalty fee” worth two to five percent of the total contract amount is paid to the big contractor for “lending” its license.

Such set-ups are most obvious in “joint ventures” where the “authorized managing office” is the representative of the small firm and not of the big firm, said one contractor. The source added that because the small contractor is not really capable of completing the JV project, the project gets delayed.

There was no governor involved in a project PCIJ stumbled upon in a field visit to Davao City last June. But it did find a company owned by Davao businessman and presidential assistant for sports Glenn Escandor working on a project that had been won by another firm.

(To be continued)


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