Ombudsman asked to probe absence of COA audit on SLEX project

MANILA, Philippines –  The Office of the Ombudsman has been asked to investigate the absence of a Commission on Audit (COA) validation report on the South Luzon Expressway (SLEX) project.

Lawyer Ernesto Francisco Jr. said the anti-graft agency should look into possible violations of a law issued by President Ferdinand Marcos in 1977.

The COA should have conducted an audit of the SLEX project after the review and approval of the Department Public Works and Highways (DPWH), he added.

Francisco said Letter of Instruction No. 579 provides that “any proposed Change Order, Extra Work Order or modification of plans and specifications which the CDCP (now the Philippine National Construction Corp. or PNCC) intends to implement in connection with projects they will undertake for the extension of the Manila North and South Expressways shall likewise be subject to prior review and approval of the Secretary of Public Highways and concurrence of the Chairman, Commission on Audit.”

Marcos issued the law a few months after Presidential Decree 1112, which created the Toll Regulatory Board (TRB), and PD 1113, which granted the PNCC the franchise to construct, operate and maintain the toll expressways.

“The clear intent for requiring the concurrence of the chairman of the COA to the prior review and approval of the Secretary of DPWH is for such ‘Change Order, Extra Work Order or modification of plans and specifications’ of the North Luzon Expressway (NLEX) and SLEX to undergo audit or validation by COA,” he said.

Last month, the TRB announced that the SLTC is applying for new or increased toll rates, which was followed by a public hearing where a presentation of the application for “initial toll” was made.

Francisco said during the presentation, TRB officials admitted that the figures presented by SLTC were not subjected to audit and validation by COA but, rather, only by “internal validation” of TRB.

“The initial toll rate of P3.024024 per kilometer that TRB and SLTC will be charging the users of the SLEX appears to be based on a project cost that has not been subjected to an audit and validation by COA,” he said.

“In other words, the users of the SLEX will be made to pay for construction costs that may not necessarily reflect the actual construction cost of the project,” he said.

Francisco said the need for prior audit and validation by COA is made more imperative by the doubling of the SLEX upgrading and rehabilitation project cost.

“Based on the document captioned ‘South Luzon Expressway Project Computation of the Current Authorized Toll Rates Dec. 10, 2010’ which was provided by TRB, SLTC claims that its ‘validated’ project cost is P12,499,303,298 for Toll Roads 1, 2 and 3 from Alabang, Muntinlupa City to Calamba City, Laguna, while TRB claims that its ‘recommended’ project cost is P10,852,814,000,” he said.

“Either of the said amounts is way above the P4.42-billion project cost for Toll Roads 1 and 2 or P5.88-billion project cost for Toll Roads 1, 2 and 3 which the Office of the President officially announced on March 24, 2006 when then President Gloria Macapagal-Arroyo launched the ‘rehabilitation and upgrading of the SLEX’ which was described as ‘one of her administration’s key priority infrastructure projects to decongest Metro Manila and open new business and employment opportunities in the southern parts of Luzon’.”

Francisco said on Feb. 6, 2006, the parent company of SLTC, MTD Capital Berhad, an investment holding company listed in Bursa Malaysia formerly known as the Kuala Lumpur Stock Exchange, disclosed that SLTC has entered into a Supplemental Toll Operation Agreement with the Republic of the Philippines, acting by and through TRB, PNCC and Manila Toll Expressway Systems, Inc.

In the disclosure, MTD Capital Berhad described the scope of the project as comprising four Project Toll Roads (PTR), namely Toll Roads 1, 2, 3 and 4 from Alabang, Muntinlupa City to Lucena City, Quezon.

More importantly, in the same disclosure, MTD Capital Berhad declared that “the total project cost is approximately P8.5 billion.”

“This means that the total project cost of the four toll roads from Alabang, Muntinlupa City to Lucena City, Quezon based on MTD Capital Berhad’s own disclosure to Bursa Malaysia or Kuala Lumpur Stock Exchange was P8.5 billion only,” Francisco said.

He said users of the SLEX should not be made to pay for toll fees that are based on a construction cost that may not necessarily reflect the actual construction cost of the project in the absence of a prior audit and validation by COA.

The Office of the Ombudsman should immediately investigate whether or not TRB and SLTC complied with the provisions of LOI No. 579 and if they did not, it should likewise “investigate the culpability of TRB and SLTC officials responsible for such omission and direct the DPWH and COA to comply,” he added.

Francisco’s move is being supported by the Southern Luzon Bus Operators Association, the Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide, the Alliance of Concerned Truck Owners and Organizations, the Independent Philippine Petroleum Companies Association, and the National Council for Commuters Protection.

In a statement, the groups said they could not rely on the TRB which they perceived to be favoring the investors of the tollways rather than the people who use the expressway, pointing out the 290 percent hike in SLEX toll fees.

Francisco and the groups said the toll rate increase will definitely result in higher public transport fares including increases in the payment of truck services for the transport of goods and products.

It is for this reason that the groups said they should find out how much MTD Capital Berhad/SLTC really spent on SLEX.