Farm-to-market roads ‘overpriced’ by up to 70%
After the shock over massive anomalies in flood control projects, now come more jaw-droppers from the questionable costing of farm-to-market roads (FMRs).
Sen. Sherwin Gatchalian revealed on Wednesday that over P10 billion worth of FMRs programmed under the 2023 and 2024 national budgets have been “extremely overpriced.”
One project, for example, cost 23 times more than the standard price set by the Department of Public Works and Highways (DPWH), while others saw markups of up to 70 percent, further bloating the project cost.
These discoveries were made at the hearing of the Senate committee on finance, which Gatchalian chairs, on the proposed P176.7-billion budget of the Department of Agriculture.
Agriculture Secretary Francisco Tiu Laurel Jr. said the DPWH set a P15,000 per meter standard cost for FMRs, but this could go as low as P10,000 if the “30 percent” markup was trimmed.
Gatchalian noted that many FMRs funded under the General Appropriations Act (GAA) under 2024 Fiscal Year (FY) cost P30,000 per meter, or twice that of the P15,000 benchmark set by the DPWH.
‘Cost overshoot’
The Bicol region logged the biggest number of FMR projects with what Gatchalian called a “cost overshoot.”
The region’s 80 projects could have cost only P520 million but went up to P1.7 billion because of the 68-percent markup amounting to P1.18 billion.
This was followed by Eastern Visayas with 33 projects that were allocated P791 million with a 70 percent or P555-million cost overshoot. This meant that the projects should have cost only P236 million without the markups.
Topping the list of extremely overpriced projects was the ongoing road concreting in Barangay San Roque in Tacloban City.
The 2024 GAA allocated P100 million for the project, which only has an actual length of 0.287 kilometers, putting its cost per meter at P348,432.06—or 23 times more than the P15,000 DPWH standard price.
In addition, the project’s contractor could not be found in the DPWH Civil Works Contracts Database.
“This is not just extremely overpriced,” Gatchalian said. “[It is] extremely, extremely, extremely overpriced.”
“Have you not detected this extreme overpricing? If the P15,000 [cost per meter] is already overpriced in your opinion, this one is P348,000 per meter,” he told Tiu Laurel.
The agriculture chief said such figures were “shocking,” but added that these questions were better answered by the project implementer, the DPWH.
Co project
It was also revealed in the same hearing that another overpriced project in Albay was handled by Hi-Tone Construction and Development Corp., which was co-founded by Christopher Co, brother of former Ako Bicol Rep. Elizaldy “Zaldy” Co.
Zaldy Co, who recently resigned as congressman, chaired the powerful committee on appropriations of the House of Representatives from July 2022 to January 2025.
The concreting of FMRs from Barangay Kidaco to Barangay San Roque in Daraga, Albay, was allocated a P46-million budget in the 2024 GAA and had a length of only 0.37 kilometers but cost P124,324.32 per meter—over eight times the standard P15,000.
Other areas that were flagged with extremely overpriced projects under the 2024 GAA were Camarines Sur (P263,157.89 per meter), Bulacan (P193,548.39) and Eastern Samar (P169,902.91).
“For me, this is an obvious sign of corruption,” Gatchalian said.
Tiu Laurel had vowed to look into the matter.
Familiar contractors
Gatchalian further revealed that three contractors who bagged the most number of FMR projects were also among the top 15 firms that secured the biggest amount of flood control projects nationwide, as revealed by President Marcos last August.
These three were EGB Construction Corp., Hi-Tone and Road Edge Trading & Development Services.
EGB cornered P242.1 million worth of FMR project awards for FY 2024, which was the second highest on Gatchalian’s list, only behind GCI Construction and Development Corp, which bagged the most number of projects at P288.5 million.
Hi-Tone bagged the third biggest FMR awards at P221.8 million, while Road Edge got P98 million.
No coincidence
Gatchalian said it was no coincidence that the Bicol region topped the total number of overpriced FMRs with Hi-Tone cornering the third biggest road contracts.
“I think it’s not coincidental that the biggest region that got FMRs is Region 5 (Bicol Region) and the company that got the third biggest number of contracts was connected to Zaldy Co,” Gatchalian said in Filipino.
These fresh revelations come in the heels of a major corruption scandal involving flood control projects which prompted congressional inquiries and the creation of an independent commission to investigate the suspected collusion between lawmakers, government officials, and contractors to embezzle billions of pesos from the country’s coffers.
Amid all this, a nationwide and widespread Sept. 21 protest took place and rumors of a coup emerged, which the military later denied.
