Cebu City’s digital traffic system: ‘Fraud audit’ sought

CEBU, Philippines — The Cebu City Council yesterday requested the Commission on Audit (COA) to conduct a fraud audit on the city government’s Digital Traffic System project, which already underwent Phases 1 and 2.

It also urged Mayor Raymond Alvin Garcia to withhold the payment for the project's Phase 2 until the result of the fraud audit comes out.

The City Council also sought an investigation into the legality of the contracts the city entered into with the supplier of the facility during the previous administration.

This came following City Councilor Jocelyn Pesquera’s privilege speech during the City Council’s regular session yesterday, when she cited alleged “anomalies” in the project.

In his speech, she defined what an “intelligent transportation system” should be, which she said must have censor component to what was established during the administration of former mayor Tomas Osmeña.

“The well-defined censor component of an intelligent transportation system must have a radar censors that used radio-waves that allow them to measure a vehicle speed and distance to come up with a precise traffic data,” Pesquera said.

Aside from censor, she said there should also be a “control system that gathers the data from the censor, which makes real-time decisions to optimize traffic flow.”

Pesquera then said that even with the current digital traffic system, its supposed ability has not been maximized.

She said there was even a time in Cebu City where the monitoring of the city’s traffic system was accessible through cellular phones, which were directly connected to the CCTV cameras.

She further said that a digital traffic system should have been enabled with a “cloud computing ability” and with advanced analytics and real-time decision-making capabilities.

This way, Pesquera said, traffic congestion is reduced since the system is designed to “adjust green lights based on the current traffic volumes,” allowing vehicles to “travel smoothly through its own calculation.”

These elements, she added, were not found in the “digital traffic system” that the previous administration purchased from Triune Electronics Systems, Inc. and from Cylix Tech, Inc., which was awarded the contracts on Sept. 1, 2020 through a Joint Venture Agreement (JVA).

Pesquera noted that the JVA and the notice of award was signed by Atty. Floro Casas Jr., who was the city administrator during the administration of the late mayor Edgardo Labella.

“For the information of the general public, at that particular date and time, Mayor Labella was still very much alive,” Pesquera said. Labella died on Nov. 19, 2021.

She said Casas, as city administrator, signed on Sept. 16, 2020, a construction agreement with Cylix Technologies and with Triune Electronic Systems for Phase 1 of the project, with a contract price of more than P232 million.

Pesquera said that Casas signed these agreements allegedly through a July 2019 “mayor’s order” Labella started serving the City as mayor on June 30, 2019.

“Mayor Labella was very much active at that time. Unfortunately, there is no copy of that mayor’s order attached to the contract,” she said.

She also noted the lack of a council resolution that authorized Labella or even Casas to sign the construction agreement on behalf of the Cebu City. Pesquera, a CPA-lawyer, said that means the contract was “invalid.”

She likewise revealed that as per records with the Cebu City Accounting Office, only 8 percent remains of the P232 million that is not yet released and that the P238 million for Phase 2 of the project has not yet been paid.

She warned that Engr. Lowell Corminal, City Department of Engineering and Public Works (DEPW) head, is already is in the process of disbursing P120 million as payment for Phase 2.

“Again, I would emphasize that the City Council did not grant any authority to Mayor Labella to sign the contract, as well as Atty. Casas,” Pesquera said.

She explained that if the city mayor is not on leave, no one, including the vice mayor, is authorized to sign any documents on his behalf.

Pesquera also mentioned that Timothy Ong of Cylex sent a letter on March 14, 2023 requesting the Cebu City government to release their payment.

In response, then mayor Michael Rama directed the evaluation of the digital traffic system project. Metropolitan Manila Development Authority (MMDA) experts who evaluated the system recommended that the contractor must upgrade the traffic management server.

“It means even with what they have installed, per MMDA, it has not complied with the terms and reference,” Pesquera said.

Around three weeks ago, the City Council approved a resolution requesting the National Bureau of Investigation (NBI) to verify the signature of the late mayor Labella because it appeared different in other documents that the mayor supposedly also signed.

As for the purchase costs, Pesquera said she made her own canvass for the Phase 1 specification, which is that for a "Digital Traffic System that have 18 intersections”, and discovered that the City could have “saved P20 million”.

“There is really something that have to be looked into, not only the failure of the contractors, service providers, not only to comply with the terms and reference but also on the pricing, because as per (the) MMDA report, there is really a big price discrepancy,” Pesquera said.

Specifically, she said the MMDA report stated that the cost per intersection is just P3 million, but the City paid the two contractors P16 million per intersection.

In the course of the discussion the City Council session yesterday, City Councilor James Anthony Cuenco, committee on transportation chairman, moved that they call for the City Government to suspend the Phase 2 payment.

“We need to stop what has already been found deficient,” he said Cuenco.

Mayor Garcia had already announced the inclusion of Phase 3 of the project in the 2025 annual budget. —/RHM (FREEMAN)