Only 34% of DPWH 2017 budget utilized

MANILA, Philippines — Bureaucratic bottlenecks have stalled the administration’s flagship “Build, build, build” infrastructure program.

As a result, the Department of Public Works and Highways (DPWH) failed to utilize 66.4 percent or P440 billion of its P662.69-billion allocated budget for 2017, a report by the Commission on Audit (COA) showed.

The COA said that although the DPWH was able to obligate 92.19 percent or P610.93 billion of its allotted budget for 2017, only P222.66 billion or 34.14 percent was actually disbursed as of yearend.

The COA cited the “delayed/non-implementation of infrastructure projects” as the primary reason for the DPWH’s low fund disbursement.

It said the DPWH’s inability to efficiently utilize its budget was apparent for the last three years, as the agency was only able to disburse 34.14 percent or P185.12 billion of its P542.23-billion allotted budget in 2016 and 34.03 percent or P148.23 billion of the P435.58-billion allotted budget in 2015.

“This indicates the management was not able to effectively manage the increasing amount of funds entrusted to the agency due to low physical delivery of target projects and activities,” the COA said in a report posted on its website yesterday.

In a comment incorporated in the audit report, the DPWH informed the COA that it has implemented a policy that no contract would be awarded until issues such as right of way and permits are settled. 

The DPWH said it sought the help of the Office of the Solicitor General for the filing of appropriate claims or charges against erring contractors.

Delayed, suspended projects 

The COA said a total of 2,334 infrastructure projects with the aggregate amount of P62.59 billion undertaken by DPWH in 2017 were not completed within the specific contract time or target completion dates. 

The delayed projects include 622 flood control infrastructure; 879 school buildings; 100 farm-to-market roads and 733 other infrastructure such as roads, highways and bridges.

The audit body said 120 of these projects amounting to P6.67 billion incurred delays that exceeded 10 percent of the specified contract time and that no liquidated damages were imposed on the contractors nor were the contracts rescinded/terminated.

It said there were 135 projects amounting to P6.07 billion that were suspended, 15 others valued at P2.104 billion terminated and 815 more amounting to P2.58 billion not started as of end of 2017.

“Consequently, the intended beneficiaries of these delayed, suspended, terminated and unimplemented projects were deprived of their immediate use. Other government agencies also suffered setback in the delivery of basic social services due to the absence of these infrastructure,” the COA said.

The reasons cited by the COA for the delay, suspension or termination of the DPWH projects were delayed approval of the proposed site by the local government units, road right of way issues, insufficient work force provided by the contractors, difficulty on acquisition/transportation of construction materials and scheduling of equipment, delayed issuance of necessary permits, inadequate planning, monitoring and supervision of the implementation of the projects and bad weather.

The COA said most of the standing blocks such as the issues on the road right of way and the site of the projects should have been considered by the DPWH during the conduct of engineering and technical viability studies. 

“The same could have been resolved prior to project implementation or the proposed projects could have been excluded from the final list of projects for bidding,” the COA said.

“Likewise, coordination with concerned government agencies and private companies should have been conducted early and regularly to address the permit issues and follow-up the release of permits,” it added.

Commitment fees

The COA said the delayed implementation of the infrastructure projects has also caused the government to lose P27.647 million in commitment fees for the loans extended by Japan International Cooperation Agency (JICA).

Commitment Fee (CF) is a fee paid to a bank in exchange for the bank’s agreement to grant a loan at a later date. 

Records showed that in 2012, JICA extended P4.94 billion in loans to the Philippines for six infrastructure projects – Central Luzon link expressway; arterial road bypass project II; Pasig-Marikina River channel improvement phase II; flood risk management project for Cagayan River, Tagolaon River and Imus River; road upgrading and preservation; and road improvement and institutional development projects.

The COA said a review of the DPWH’s loan utilization showed that only 15.45 percent or P762.70 million has been disbursed as of the end of 2017.