ACGP: Hush money results in poor-quality roads

Huge commissions, more than the standard 10-percent hush money, being demanded by engineers belonging to the Department of Public Works and Highways (DPWH) from constructors undertaking government-funded infrastructure projects not only threaten the profitability of the construction industry but also result in poor-quality projects to the detriment of their target beneficiaries.

A group of constructors called the Alliance of Construction Group of the Philippines (ACGP) revealed that because of DPWH personnel’s unreasonable demand for bribes it was no longer practicable to transact business with DPWH.

Even the officials from the agency that is the usual source of funds to be used for the projects are also asking huge percentage from constructors, the ACGP said. The DPWH, in addition to its regular workload of constructing and maintaining roads, also constructs for agencies like the Department of Education and the Department of Transportation and Communication through so-called contract by administration.

The Cebu-based ACGP claimed that most of the road projects in the country were below the standards set by the International Construction Code, because of corruption. This means, it said, that corruption-tainted roads have shorter life-span, which explains why constructors had rejected the idea of issuing a warranty for projects they undertake with the government.

Infrastructure is the major road to development and this should be given priority by the government by eliminating corruption in agencies responsible for infra projects, said an ACGP official who requested anonymity for obvious reasons.

Based on ACGP official’s reckoning, the DPWH would demand for every road project, for examply, a 10-percent commission known as SOP (for Standard Operation Procedure SOP) in under-the-table lingo, a 20-percent commission intended for officials of the agency that is considered as the fund source, a ten-percent kickback for members of the DPWH-Bids and Awards Committee that handled the pre-qualification of bidders as well as the bidding process, and a five-percent cut for those who facilitated the mobilization of funds needed for the completion of the project.

In all, the cash-out involved is at least 45 percent of project cost.

This results to sub-standard infra projects, the group said, adding that instead of 25 years life-span for a road project, a corruption-fortified project would be useful only for a year or two.

But DPWH officials, aware of the dire consequences of offering a corruption-laden project in the auction block, had to increase the project’s agency estimates, so as to include the unnecessary costs resulting from bribes demanded from constructors, according to some DPWH insiders. This means the agency estimate of a project that normally requires P15 million to complete will have to be jacked up twice or more to cover the unnecessary costs.

Meantime, the ACGP also defended their member-firms which the DPWH suspended for violating the government procurement law, saying the slippage or substantial delay in the project activities was usually a result of lack of funds, delayed payment and others. That is one reason the construction firms had to abandon the project, the ACGP official said.

The ACGP cited a recent Pulse Asia survey that the Department is widely perceived by the public as the most corrupt government agency. –Mina Diaz, Daily Tribune