COA: Delays in MMDA antiflood projects to cost gov’t P32M in fees
Nearly half of the 58 flood control projects being implemented by the Metropolitan Manila Development Authority (MMDA) were found to have suffered delays due to “poor strategies,” state auditors reported.
Based on the Commission on Audit’s (COA) 2023 report, 22 projects with a budget of P510,578,333.61 under the Metro Manila Flood Management Project Phase 1 were “not completed” on time under the contract, causing delays of up to 310 days.
Because of this, the government will have to pay P32.9 million, covering five years from 2018 to 2023, in commitment fees to creditor banks.
A commitment fee is a nonrefundable charge imposed by creditors on borrowers with an “unwithdrawn balance of loan.”
On top of this, there were also 29 projects worth P371.03 million that were not implemented due to cancellations and failure to hold early bidding activities.
“This resulted in the nonattainment of the intended objectives of the projects and deprived the public of benefits therefrom,” the COA report said.
In addition, the MMDA only had a 12-percent accomplishment rate for its performance targets for “percentage decrease in flooded areas” under flood mitigation measures.
Targets
Under the MMDA flood control program, pumping stations and needed infrastructure and equipment in “critical drainage areas” in Metro Manila were to be built or rehabilitated. Some of the facilities were outdated and considered inefficient.
The projects were funded through loans with the Beijing-based Asian Infrastructure Investment Bank and Washington-based International Bank for Reconstruction and Development of the World Bank group.
The program started in 2018 and was initially projected to be completed by 2024, but state auditors pointed to “poor strategies in the monitoring and implementation of programs and projects, resulting in significant revisions in the target completion time.”
Extended
Citing the reasons provided by the MMDA’s Project Management Office (PMO), COA examiners approved the 22 subprojects for contract extension.
But they stressed that pushing back completion targets “may be an indication of ineffective planning.”
“The slow availment or low utilization of loan proceeds caused the incurrence of higher commitment fees which the government could have used for other priority programs and projects,” the COA report said.
The MMDA explained that the delays were “mainly due to custom clearances, port congestion, changes of design and specifications for custom-made goods, reconceptualization, changing weather conditions, time suspensions and variation orders.”
To this, state auditors said the PMO should “enhance its planning mechanism and address foreseeable circumstances that may affect the timely implementation of the project.
The COA also called out the MMDA for not complying with the rules on financial documents, which “prevented the audit team from systematic and effective review of the documents.”
To prevent more postponements, it advised the agency to assess and reconcile its funded projects under the General Appropriations Act, annual work plan, and budget and quarterly status of government-publicized projects for “consistency and reliability” of information.
