COA SAYS: CPA spent P1.8M for "dubious" demolitions

CEBU - Cebu Port Authority officials have been very lax in the collection of its collectibles and have questionable transactions including the spending of P1.8 million to demolish the illegal structures in the port area without sufficient documents, according to the Commission on Audit.

Port officials cleared the port zones of illegal structures that prompted them to hire seven labor contractors and paid them P1,817,600. But state auditors said the cost of some contracts appeared unrealistic as compared with the number of structures demolished.

The records showed that in the demolition of 27 structures at the entrance of Pier 1 in Legaspi Ext. the CPA paid P247,200 to 18 laborers. But in another contract for the demolition of 173 structures in E.S. Baclig Ave. inside the port area, the CPA also paid the same amount.

CPA officials tried to justify their expenses by saying that the contractors’ responsibility did not end with the completion of the demolition but they were also tasked to monitor the area vacated for any signs of re-occupancy.

But COA argued that the alleged additional work undertaken by the contractor cannot be traced to the general conditions of the contract agreement. The state auditors also observed that the demolition work was done already after the squatters received their financial assistance, in which they were made to sign an agreement.

In that agreement, the affected vendors and the squatters agreed to voluntarily vacate the place and demolish their structures without any demand from the CPA.

The CPA officials also said the contractors were also involved not only in the demolition, but also in conducting surveys, meeting and post-demolition activities.

The records also showed that CPA failed to collect the 10-percent share of the gross pilotage income of the Cebu Harbor Pilots Association that costs more than P.5 million.

The CPA said the harbor pilots have claimed that they are no longer required to pay pilotage dues to the port authorities pursuant to a court order.

But COA found out that the court order was issued by a Regional Trial Court in Manila in a separate case between the harbor pilots and the Philippine Ports Authority.

But the COA’s legal department argued that the court order is not applicable to CPA because it is a separate and distinct corporate entity from PPA, and CPA is not a party to the case.

CPA has decided to require all shipping companies to pay directly to CPA all the pilotage fees, and that the harbor pilots will just bill the CPA of their share.

The state auditors have recommended that the CPA should require the harbor pilots’ association to remit the CPA’s 10 percent share of the pilotage services. — Rene U. Borromeo/BRP (THE FREEMAN)