MMDA flagged over 33 flood control projects

MANILA, Philippines — The Commission on Audit (COA) has called out the Metropolitan Manila Development Authority (MMDA) over the delayed implementation of 33 projects amounting to P825.382 million, which are meant to address the perennial flooding in the metropolis.

In its 2022 annual audit report on MMDA, the COA noted that out of the 47 projects under the Metro Manila Flood Management Project Phase 1 (MMFMPP1) set to be implemented from 2018 to 2022, only 29.79 percent or 14 projects have been completed as of Dec. 31, 2022 while 33 remain pending.

The COA said that of the 33 pending projects, only four were ongoing while 29 have yet to start or were still up “for implementation” as of end-2022.

COA records showed that five of the pending flood control projects involve infrastructure, 19 pertain to procurement of goods and other services while nine pertain to consultancy services.

The audit body attributed the delays in the projects’ implementation to suppliers’ request for extension of deliveries; change in procurement specifications; delays in procurement activities; revision of contract cost or contract duration; non-compliance of consultants in the documentary requirements, and relocation of site or project re-design.

COA said that further analysis of MMFMPP1 also revealed that procurements “cannot be effectively conducted since there is no breakdown of projects/procurement that will tie-up to the total allocation per GAA (General Appropriations Act).”

“The foregoing observations indicate non-observance by the Agency of the conduct of early procurement activities. It also manifested the [MMDA] Project Management Office’s (PMO) inadequacy of strategies to strictly implement the planned programs/projects and closely monitor the project implementation,” the COA said.

“The Agency must expedite the implementation of programs and projects as this will also improve the quality of services rendered to the public,” it added.

Worse, the audit body said that because of the delayed implementation of the projects, the government has already incurred P27.426 million in commitment fees in relation to the loan component of MMFMPP1.

A commitment fee is paid to a bank or lender in exchange for the agreement to grant the loan at a later date. It serves as compensation to the lender for setting aside the amount of loan instead of utilizing it for other purposes to earn interest.

COA noted that of a total of P1.146 billion loan proceeds allocated to MMDA for the implementation of MMFMPP1, only 5.9 percent or P67.667 million has been disbursed as of Dec. 31, 2022.

“As stated in Section 2.04 Article II of the Loan Agreement, commitment fee is based on the unwithdrawn balance of the loan. Thus, the slow availment/low utilization of loan proceeds caused the incurrence of higher commitment fees which could have been used by the government on other priority programs and projects,” the COA said.

The COA recommended to MMDA to accelerate or maximize the utilization of loan proceeds and fast- track implementation of projects by adopting “efficient and remedial measures.”

The COA said the MMDA must also “address immediately all perceived project procurement/implementation issues/hindrances to avoid non-accomplishment of the planned activities.”

The audit body said the MMDA must also direct its PMO to closely monitor the status and progress of the projects, and ensure that the strategies adopted are responsive to fast-track the projects’ implementation and completion.

In a reply, the MMDA informed the audit body that it has already crafted “strategies” aimed at improving the pace of implementation of the projects starting in 2023 and in the coming years.

The MMDA said that together with the Department of Public Works and Highways, it is optimistic that the agency will be able to “maximize loan drawdowns and fast-track deliveries of procured services, goods, machineries and equipment.”

“The Audit Team will monitor the implementation of the foregoing Management’s actions in CY (Calendar Year) 2023,” the COA said in a rejoinder.