Osmeña: No to settlement of P32M unpaid tipping fee

CEBU, Philippines – The Cebu City government is not willing to enter a settlement with Asian Energy System Corp. for the unpaid P32 million garbage tipping fee in 2016.

Mayor Tomas Osmeña said the transaction was illegal and settlement is not part of the option.

“If it’s illegal, there’s no settling an illegal transaction. The only one that can sanction a settlement is the Commission on Audit that says there is a disallowance,” Osmeña said.

In 2016, COA questioned the city government for entering into a transaction with Asian Energy System Corp. without a valid contract. The company runs a landfill in Consolacion town where the city dumped its garbage.

Osmeña said the transaction between Asian Energy and the previous administration of the city was "anomalous". He said he does not want to go to jail just because of the irregular transaction entered into by former mayor Michael Rama.

“My position is very clear, there’s no contract. I’m not going to jail for Mike Rama, God forbid,” Osmeña said.

His decision not to enter into a settlement was based on his previous experience with the abattoir project in Barangay Basak San Nicolas. He recalled entering a compromise agreement with the contractor for the work accomplished amounting to P1.2 million in 1998, but the Commission on Audit disallowed it.

“That’s going to happen if I approve that, I end up being disallowed and go to jail. I’ve learned my lessons before,” Osmeña said.

Asian Energy System Corporation already filed a civil case before the Regional Trial Court in Parañaque City against the city government for alleged unjust refusal to pay its obligation. The court has set the pre-trial conference on May 3.

On November 2, 2017, the complainant through its president Cipriano Abdon lodged a complaint for breach of contract, collection of sum of money and damages against the city government represented by Osmeña.

Abdon said their transaction with the city government was legal as it was done through a negotiated bidding due to the circumstances that no other bidders showed interest.

The P32 million represents the use of the private landfill within the period from March to August in 2016. The city pays P700 per ton of garbage as tipping fee.

Osmeña, however, said the Bids and Awards Committee during the previous administration did not conduct a “genuine” public bidding, adding that the service provider was a favored bidder. The city government asked the court for the outright dismissal of the case.  —/FPL (FREEMAN)