The Regional Development Council Executive Committee meeting last August 25 in Ormoc City was one of the most important, even controversial, RDC meetings I have ever attended.
It was about recommending the termination of an 800-million-peso contract for Phase I of the Tacloban Airport Development Project which in July had a 38 percent negative slippage. After a short period of just 4 weeks, the Civil Aviation Authority of the Philippines reported to the RDC that the negative slippage had gone down to 20 percent because part of the original scope of work was moved to Phase II.
This project is over a year behind schedule and should be speeded up.
However, it is difficult to arrive at a recommendation to terminate a project because, according to experts on the bidding process, the process of termination will take the better part of six months, especially if the contractor contests the termination.
Completion date adjusted
DOTr officials revealed that the new completion time of the project is March 2024. This announcement effectively admits that there is a substantial delay in completing this Phase of the work because it was originally set for completion in May 2022. If this is the day of reckoning, the project will have a delay of almost 2 years.
The Executive Committee spent some time discussing the motion to endorse the termination. The basis for the endorsement is simply the application of relevant rules and regulations of the government. It was a situation that had no room for contrary action.
If the Executive Committee had not passed the resolution endorsing the RPMC resolution to terminate, it would have been doing an act contrary to law, rules, and regulation and subject itself to a possible lawsuit.
The negative slippage of the project was reported by CAAP as 20 percent. The minimum slippage that is a valid ground for termination of an infrastructure contract is 15 percent. It is what is termed a “no-brainer”.
As much as one earned
Terminating a government contract must undergo a process where the contractor is notified and allowed to contest the termination, Hence, it can be a long one, probably 6 months before a new contractor can take over and continue the work left by the terminated contractor.
Here is my view of an option in this impasse.
If the contractor wants to help the region it has the option to voluntarily stop its work and turn it over to the replacement contractor. If it wants to fight tooth and nail, then it runs the risk of being blacklisted and being disqualified to participate in any government bidding for infrastructure projects for one or two years. By volunteering to be replaced, the time needed to resume the work will be drastically shortened.
It could bargain for payment of its progress so far, called payment by “quantum meruit”.
In other words, there are several options that DOTr can choose from as the Implementing Agency on how to proceed and avoid further delay.
Time for DOTr to do its job
DOTr must act with urgency on the recommendation of the RPMC. As mentioned in the Economic Impact Study I prepared and distributed during the meeting, the region will lose P5.1 billion in tourist receipts or spending every year if project completion is delayed. It is a huge sum that can substantially increase income and employment in this region.
This issue calls for tough decisions. That is why I quoted a famous English proverb: When the going gets tough, the tough get going.
Let us see if the DOTr is tough enough and really gets going.
The RDC has done its job. DOTr should do its part, as a government agency worthy of the mandate from the people it serves.
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