Cebu City PBAC quizzed on batching plant deal

CEBU CITY — The city’s pre-bids and awards committee (PBAC) is in hot water for awarding the contract of the P32-million batching plant in Barangay Budlaan to WT Construction Inc. (WTCI).

Vice Mayor Renato Osmeña, in a letter to the PBAC dated June 1, demanded for an explanation why the committee deviated from the project’s original terms and conditions and proceeded to award the project to WTCI.

Osmeña headed the negotiating team when the city government accepted the unsolicited proposal of Dakay Construction and Development Corp. to operate the batching plant.

Dakay Construction proposed to operate the facility under a contract-add-and-operate scheme of the amended Build-Operate-and-Transfer Law.

Under the contract-add-and-operate scheme, a project proponent adds a component to an existing facility which it operates under a government lease agreement for an agreed concession period. The government will own the added facility after the concession period expires.

Osmeña, in his letter, said the PBAC, in awarding the contract to WTCI, deviated from the terms and conditions agreed upon in the negotiations with Dakay Construction.

He questioned why WTCI, under its contract, will use the bitumen storage tank of F.E Zuellig at the city’s old batching plant at the north reclamation area, when supposedly, under the original terms, the firm should be adding its own bulk bitumen storage equipment.

"How can the WTCI donate this to the city at the end of the concession period when it does not even own it?," Osmeña asked.

Lawyer Jose Jonas Salas, Mayor Alvin Garcia’s representative to the PBAC, was not available for interview.

The bid and tender documents of the Budlaan batching plant proposal called for the winning contractor to add a bulk bitumen storage equipment, truck weighing scales and an asphalt laboratory to the facility.

Because of the awarding of the project to WTCI, Dakay Construction is threatening to file charges against the city government should the city council approve a resolution authorizing the mayor to sign the contract with WTCI.

The council’s committee on laws has referred the resolution to the Coordinating Council for Private Sector Participation, formerly the BOT Center, in Malacañang.

Dakay Construction earlier sought for the disqualification of WTCI from the list of qualified bidders.

While Dakay Construction offered to pay P30 per ton of asphalt, WTCI proposed to give the city five percent for each ton of asphalt sold. WTCI also offered to reimburse P15 million to the city.

The PBAC, however, proceeded to award the project’s contract to WTCI despite the defects raised by Dakay Construction, saying WTCI’s offer was more advantageous to the city. — Freeman News Service