'No evidence' of ICC overprice on first day of Senate probe

MANILA, Philippines (UPDATED) – The accuser of Senate President Franklin Drilon was the first to arrive at the Senate Session Hall on Thursday, November 13, toting a luggage that he said was full of documents.

When asked, however, for evidence to back his allegation that the Iloilo Convention Center (ICC) is overpriced, former Iloilo provincial administrator Manuel Mejorada had nothing to show.

"I have to admit, right now, there is no evidence because I have no subpoena powers," Mejorada told Senator Juan Edgardo Angara, who asked for categorical evidence to prove his allegations.

Asked who may have earned from an overprice, Mejorada said: "Hindi ko po malaman. Basta ang alam ko po may kumita dito (I do not know. What I know is someone profitted from this)."

Laughter was heard from the gallery, which was packed by supporters of the Senate President.

Mejorada – Drilon's former aide – had filed before the Office of the Ombudsman criminal and administrative raps against Drilon, Public Works Secretary Rogelio Singson, Tourism Secretary Ramon Jimenez Jr, and others for the malversation of public funds and plunder when they allegedly conspired to jack up the cost of the project. (READ: Drilon, Cabinet secs face raps over 'overpriced' Iloilo building)

Mejorada said he is convinced that there is an overprice in the building that has yet to be completed. "As an investigative journalist, [I see that] the paper trail shows somebody orchestrated all these," he told the Senate panel.

He spoke of an "unseen hand" – obviously referring to Drilon – which orchestrated a "conspiracy" with government officials. He said he may not have evidence to prove ovepricing, but he saw "big opportunities for corruption." 

But Mejorada said it is up to the investigation of the Office of the Ombudsman to show who is behind it. “Ang layunin po na malaman kung sino-sino ang gumawa ng mga katiwalian ay doon ko na lang po hahanapin sa Ombudsman kung saan po nagsampa na ako ng isang graft complaint,” he said. (It will be at the Office of the Ombudsman that we will identify the people behind the corruption.)

Wikipedia research

Presenting himself as an “investigative journalist,” Mejorada said he scrutinized the project for one year and 6 months.

“My investigation into this project as a journalist was triggered by the announcement of the proponent, Senate President Franklin Drilon, during the unveiling ceremonies on November 23, 2012, that it was going to cost P450 million,” Mejorada said.

“In fact, Wikipedia prominently displays the information that this is a two-storey edifice costing P450 million,” he added.

Senators and other resource speakers would later chide Mejorada for using the unreliable website as a source.

YELLOW SHIRTS: Supporters of Senate President Franklin Drilon attend Senate Blue Ribbon probe. Rappler photo

YELLOW SHIRTS: Supporters of Senate President Franklin Drilon attend Senate Blue Ribbon probe.

Rappler photo

Mejorada said he was shocked when he learned that the project cost rose to P700 million. Drilon supposedly even referred to it as a “one-billion peso project,”  prompting Mejorada to investigate online. 

The basis of his computation for the alleged overprice was the "industry standard" of P30,000 per square meter cost of the project he had drawn from his usual research material – published reports, publications, and online sources.

He compared this with the public statements of Drilon, announcing the project cost to be P63,000 per square meter, which was double the industry standard, he said.

Drilon denied that he caused the project to be overpriced. The government even gained P521 million, he said, when he talked to Megaworld president Andrew Tan who agreed to donate the lot where the project would be built to the Department of Tourism (DOT). (READ: Overpriced? Gov't 'gained' P521M for Iloilo building – Drilon

Drilon said the ICC was conceptualized by the local hotel industry, which aimed to solve the low occupancy of hotels by inviting performers and conference organizers to the city.  The ICC is also inteded to be the venue of the "coveted" Asia-Pacific Economic Cooperation (APEC) Senior Ministers' Meeting in 2015, which is expected to bolster Iloilo's bid to be "one of the magnets for conventions" in the world.

Singson: Prove corruption, I will resign

Department of Public Works and Highways Secretary Rogelio Singson also lamented the allegations. He said he will resign if anyone can prove that he earned even P1 from the project. 

Singson scoffed at Mejorada’s claims that he is an investigative journalist. The complainant should have asked the DPWH for documents instead of base his conclusions on unreliable web sites like Wikipedia, the secretary said.

"Kung hiningian lang kami sana ng dokumento (If only he asked us for documents). I have insisted that we be open and transparent. Sana naibigay namin lahat ng impormasyon na kinakailangan para ang isang investigative journalist na magaling makuha ng tama ang impormasyon at hindi umasa sa Wikipedia (We would have provided someone who is a good investigative journalist the correct information and he won't depend on Wikipedia)," Singson said.

In a presentation at the start of the hearing, Singson refuted allegations that the ICC is overpriced. The project's total projected cost is P650 million to P747 million. The funding was sourced from the budget of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and the DPWH.

Singson gave assurances that the current price of about P63,000 per sqm will further go down to P53,000 per sqm because of "value engineering." He also corrected claims that the cost per square meter reached P100,000. The divisor used, he said, was only 6,000 sqm, which covers only the first floor. The total floor area is actually 11,693.79 sqm.

Singson said the standard of P30,000 per sqm cannot be used to assess the ICC because it is not a regular building. ICC's floor to ceiling height of 12 meters is equivalent to 3 regular office buildings, he said. 

Rigged bidding?

In the absence of evidence of overpricing, Mejorada instead highlighted the supposedly anomalous bidding and implementation of the project won by Hilmarc's Construction Corporation. The same contractor built the allegedly overpriced Makati City Hall Building 2, which is the subject of a probe of the blue ribbon subcommittee.

“I come before you to unravel a complex fraudulent transaction in which Republic Act 9184 and its Revised Implementing Rules and Regulations were transgressed and mocked,” he said. 

Mejorada questioned the DPWH for opting for a negotiated procurement instead of competitive bidding. But Singson said negotiated procurement was the alternative option after two failed biddings. The bidders complained that the contract budget of P482 million was too low for the project. 

"As a result of the first two public biddings that failed, DPWH proceeded with what is allowed under RA 9184 or the alternative mode of procurement or negotiated procurement," Singson explained.

Singson explained that the DPWH invited 4 bidders, who met certain eligibility requirements to implement the approved design of the ICC. In the end, only two of the 4 invited bidders participated – DMCI and Hilmarc's – because the others felt the contract price was too low.

Value Engineering

Hilmarc's and DMCI were required to submit two proposals – one based on the original plan (conservative) and another based on a value engineering plan (aggressive). A value engineering plan means adjusting the structural aspect of the building to lower the cost of the project while strictly following the architectural design. Mejorada argued that value engineering should have been done as early as the first competitive bidding. 

RA 9184 does not have provisions allowing the method, but it is discussed in the  Implementing Rules and Regulations of the law. Singson recommended that the law should be amended to require the method to lower the cost of goverment projects. It is a topic that senators said they want to discuss further. 

The first submissions of DMCI and Hilmarc's failed because they submitted bids of over P600 million or higher than the approved contract price of P482 million. In the end, Hilmarc's was able to further revise the structural aspect of the ICC to be able to lower the price to P479 million and thus, compliant.

Bidding for Phase 2 of ICC is still ongoing. It will cover the finishing touches on the ICC, including the toilets and electromechanical items like air conditioning, escalators, and elevators. It has a budget of P254 million and will put the total project cost to P747 million.

Singson said they may even bring down the cost of the project down to P650 million – lower than the original cost of estimate of WV Coscolluela, which would total P821 million to include the pile foundation. 

"Where is the corrupt practice? I am as concerned as anyone about transparency and about integrity. I can assure you wala akong kinita ni isang kusing (I did not earn  a single centavo)," said Singson.

Senators ignite fireworks

The senators, not Mejorada, provided the fireworks at the hearing. Drilon lost his cool when Senator Nancy Binay asked resource speakers about a "legislator" who lobbied for funding for the ICC. 

"Why doesn't my colleague ask me what my role in funding is? Let's not beat around the bush," an irked Drilon butted in. This prompted committee chairman Senator Teofisto Guingona III to briefly suspend the hearing. (READ: Tempers flare at Senate probe into Iloilo building)

Binay got peeved as well when Senator Antonio Trillanes IV kept comparing the ICC to the Makati City Hall II Parking Building, the subject of a probe of the blue ribbon subcommittee. 

After the hearing, Mejorada said he felt triumphant. He said the issues raised by senators Sergio Osmeña III and Aquilino Pimentel III prove there were anomalies in the project.

Osmeña drew attention to Megaworld's motivation to donate the lot while Pimentel raised questions about the architectural design imposed by Megaworld.

In accepting the lot donation, the DOT agreed to a pre-condition that the ICC will follow the architectural design provided by the Megaworld so it is consistent with the overall design of its complex. The adjustments made after the value engineering had to be approved by WV Coscolluela.

In his complaint before the Office of the Ombudsman, Mejorada questioned why the selection of architectural firm WV Coscolluela did not go through bidding. Singson explained that the design came free with the lot donation of Megaworld. Mejorada maintained it is still a violation of RA 9184. 

Osmeña's line of questioning prompted Mejorada to later say: "Megaworld had its own plans of building a convention center and finds an opportunity for government to fund the project."

Drilon responded: "This is the problem with Mr Mejorada. He makes conclusions out of facts that are not even established. I am testifying under oath that I was the one we went to see Mr Andrew Tan. So what is the big problem with that?"

The Senate probe also revealed that the design of WV Coscolluela allowed the ICC to add 2 more floors in the future, which meant additional cost to make sure the structure of the roofdeck is strong enough for the possibility of expansion. Pimentel asked if it was better if the design did not contemplate expansion because it would have meant cheaper cost for the project. 

DOT Secretary Ramon Jimenez Jr defended the design saying it is more efficient to have the option to add floors than to bring down the entire building just to construct a bigger one. Value engineering earlier conducted did not allow changes in the structure of the roofdeck.

"The hearing forced them to admit that there were infirmities. Like in the architectural design. I alleged in my complaint that there was no bidding. They admitted it was donated. They are just covering up their failures," Mejorada said.  

Mejorada said he will ask the Senate blue ribbon committe to subpoena documents and certain individuals to further prove this allegations. The senators also asked representatives of WV Coscolluela and Megaworld to attend the next hearing. 

Mejorada also claimed the ICC is the “tip of the iceberg.”

“It pains me to tell the whole nation that Iloilo City has become the bird’s nest of corruption in the country, and it’s largely because those behind such corruption enjoy a mantle of protection from the third highest elected official of the land,” he said, referring to Drilon.  

He identified the following allegedly anomalous projects: Pavia Housing Project, Iloilo City Hall, Iloilo Diversion Road, Esplanade I and II, San Isidro relocation site land purchase, two flyovers under the President’s Bridges Program, and the Hall of Justice.  Rappler.com