Iloilo, corruption capital of the Philippines (2)

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IN time for the Senate hearing on the alleged overpricing of the Iloilo Convention Center (ICC), the local politicians in Iloilo City issued a statement of support for the controversial project that is marred with apparent anomalies. In effect, their statement was also in support of beleaguered Senate President Franklin Drilon, the project proponent who is Iloilo’s “godfather” or patron of government public infrastructure projects.

The Iloilo statement of support published in national newspapers ,however did not address the issue of the obscene overpricing of the P700 million convention center. What it merely said is the ICC was a “vital project which will be used as the primary venue of the 2015 Asia-Pacific Economic Cooperation (APEC) ministerial meetings.” It added that hosting the APEC meetings has brought “great joy and pride” to Iloilo.

As Senate President, Drilon himself pointed out during the Senate blue ribbon committee hearing last Thursday, the real issue is on the alleged overpricing of the ICC. Yet the statement issued by Iloilo’s discredited politicians merely said: “The issues on the alleged anomalies and over-costing (sic) of the Iloilo Convention Center have been mainly used as part of the political chicanery and mudslinging by bickering political groups.”

What is also noticeable in the statement of support for the ICC and Senator Drilon is that Iloilo Governor Arthur Defensor Sr., the first cousin of Senator Miriam Defensor – Santiago, is not a signatory to it. It seems as if Iloilo City is not a part of the province of Iloilo and that the ICC is not located in Iloilo province, but in the separate kingdom of property developer MegaWorld that donated the land for the convention center.

Governor Defensor belongs to the Liberal Party and therefore is a political ally of Senator Drilon, Congressman Jerry Treñas and Mayor Jed Patrick Mabilog of Iloilo City. The Governor of Iloilo may have already distanced himself from the political maelstrom that has hit the high-profile pet project of Senator Drilon in the provincial capital.

Dubious donation of MegaWorld

The crux of the alleged overprice on the ICC is the dubious donation by MegaWorld Corporation of the 1.7 hectares of land as the site of the ICC. The convention center being built inside the Iloilo Business Park that MegaWorld is developing at a rather slow pace.

The apparent anomaly, which became the source of the alleged overprice, is the dubious donation by MegaWorld that came with the architectural and engineering designs of the convention center. Upon questioning by Senator Sergio Osmeña 3rd, Tourism Secretary Ramon Jimenez Jr. said the donation of the property came with the designs of the ICC by W. V Coscuella & Associates. “The donation came with the plan,” Secretary Jimenez admitted.

Thus, the architectural and engineering designs were imposed upon the Philippine government by property developer MegaWorld in spite of the fact the latter will be the real beneficiary of the P700 million convention center that is being paid for with public funds. The actual cost of the 1.7 hectare land donated by MegaWorld is only P28.3 million based on its acquisition cost of P1.2 billion for the 72 hectares of the old Iloilo Airport.

The problem on the side of the national government is its amazing incompetence and/or outrageous corruption. Secretary Jimenez proved his sheer stupidity when he defended his department’s decision to keep the original roof deck design of the ICC that was done by W.V. Coscuella & Associates. The DoT chief said the “roof deck design was maintained because he thought that the architect wanted to have an option for expansion.” (Philippine Daily Inquirer, 14 Nov. 2014)
When the Tourism secretary read the provision of the donation during the Senate hearing, the condition was for the “donee” (DoT) to use the “proposed conceptual design of the convention center to ensure the consistency with the overall design of the surrounding area.” But, it later turned out that MegaWorld did not just want their conceptual plan followed. They want their own architectural and engineering designs preserved and implemented, too.

Overdesign caused overprice

It was Senator Aquilino Pimentel 3rd who pointed out that the overdesign of the convention center caused the project cost to go exceedingly up. There is really no need for the design of the structure to have a provision for two more floors. It just increased the project cost with the additional expense for the foundation and the roof deck.

The Philippine International Convention Center (PICC) built 40 years ago in the mid-1970s did not even have such design. Why should the ICC that is located only in a regional center like Iloilo City, whose convention center would not be of much use for international conferences after 2015 APEC, be made so special? Preference would be more for Cebu or Davao.

Senator Pimentel further pointed out that the cost of the ICC project could have been further reduced (after DPWH did some value engineering) by taking out the design for two additional floors and changing the plans for the roof deck. True enough, the cost of piling alone for the superstructure amounted to a whopping P100 Million!
The additional two floors of the convention center would most likely be never used since there will be no demand for them. Senator Pimentel is correct that it will be seen in the future as overdesign or overprice if the two floors were not built. However, the facade of the ICC would look different once the two floors are constructed on top of it!

Drilon’s mistake or scam?

Senator Drilon admitted that it was he who broached the idea of the convention center to MegaWorld CEO Andrew Tan to be built inside the Iloilo Business Park. He also said that he who requested for funding of the Iloilo Convention Center from the Department of Budget & Management (DBM) by writing a letter to President Benigno S. Aquino 3rd, but he stayed away from the bidding of the DPWH. It seems to be a good idea.

However, with the turn of events the P700 Million ICC could have been built at half the cost if it was constructed outside the MegaWorld Iloilo Business Park. The cost of land could have been P100 Million and the cost of the finished structure of the convention structure at P250 Million or a total of P350 Million.

Using the floor area 6,400 sqms. of the DPWH contractor (Hilmarc) at the DPWH price of P40,000.00 per sqm, is only around P250 Million.

That is P450 Million less than what the P700 million to be spent on the ICC once it is completed inside MegaWorld’s Business Park. Even with the 8,932 sqms floor area that the DPWH used when it published its bidding in the Manila Standard in July 2013, that would only be P350 Million!!!

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32 Comments

  1. Anna L. Marquez on

    Drilon and this Iloilo officials should be properly investigated. Or is that kind of “senate probes” only reserved for the Administration’s opponents?

    • Meredith Pacheco on

      Seems like it. The President is always quick to defend his appointees, his friends, his allies at the LP. Daang matuwid seems to be long forgotten.

    • Birds of the same feather flock together. Sad to say but these politicians have different scheme of corruption in terms of pocketing MILLIONS from government projects!

    • Blake Rodriguez on

      Politicians at this level of corruption know no shame. They can pocket millions for themselves while looking straight in the eyes of those dying from hunger.

  2. The facts provided in this article are baseless. The main purpose is to antagonize Drilon and insult Ilonggos. How much did Binay party pay for this article? (the answer will be undoubtedly 0, which is untrue) Makati politicians are more corrupt, stop being jealous of the kickbacks Ilonggo politicians received.

  3. Roldan Guerrero on

    We have the PICC, the CCP and many other good government buildings that we can use to host such events as what they plan to hold in that corruption marred ICC in Iloilo. There are more important things in top priority where that money used in ICC should be spent correctly. The problem with the people who have the POWER of the PURSE is they appropriate BALOONING AMOUNTS in conjunction to their personal advances. I will never forget what a DPWH Project Engineer told me:” HIJO PAG WALANG PROYEKTO,WALANG PERA” (NA NANAKAWIN). in other words, walang SOP…in handling government funds, SOP is the term they use as code for KICKBACKS. Why is Singson reconstructing roads that are still very viable if not because of SOP? Look at what they are doing now in Manila, the roads they are reconstructing now are still very good. What is their purpose in reconstructing it when there are so many places in the country that cant be commuted as a result of the MISUSE of FUNDS they are doing? Is it the right thing to construct buildings of less importance such that we could show to foreign dignitaries we also can afford to have they have? I must not be wrong to say if Drilon`s main objective is to create his “SOP” by the millions in constructing the ICC. Sa PAGMUMUKHA PA LANG, SI DRILON ANG ISA SA MGA PINAKAMASAHOL NA MAGNANAKAW NG GOBYERNO. He comes after AQUINO and ABAD.

  4. Leodegardo Pruna on

    Slowly but surely, the scheme concocted by Drilon for some personal if not major gains is being unearthed. It doesn’t follow that not being a party in the bidding process is innocence of the wrongs accompanying the arrangement. As “AUTHOR” of the project, there surely would be a hidden “agenda” known only to him and Megaworld and the contractor. The way and manner Drilon acted and responded to questions profounded to him showed who and what kind of a man he is. God bless the Philippines.

    • The sad thing is, Drilon is not subject to the same scrutiny as those other erring politicians simply because he is an LP member and Aquino ally.

  5. jose btaganahan on

    Iloilo is not the corruption capital of the Philippines, Makati is. Do you want to debate on this Mr. Ramos? As a starter a modern convention center costing about 63,000 pesos per square meter is not, in my professional capacity obscenely overpriced, but with in the reasonable range. While the Makati City Hall Building ll (which is basically a parking building as reflected in the bid documents and the fact that 5-storeys of the 11-storey building are car parking areas and costing about 87,000 pesos per square meter is grossly and anomalously overpriced.

  6. What you have here are pieces of trash handed to you by Mejorada and Syjuco and you dignified it and added insult by declaring ILOILO, corruption capital of the Philippines. Where did they got those evidence you have written, from Wikipedia, the most un reliable source of information. I think your real motive in declaring ILOILO as corrupt capital is to deviate the attention to the hottest issue of corruption against your boss, VP Binay.

  7. Drilon and Binay have one thing in common they are magnanakaw, mga walang hiya hayop gumastos Pag di nila Pera, at Ito Ay Pera ng taong bayan. Naway magising na Ang taong bayan at Pilipino na Huwag ng iboto Ang mga kawatan at sinungaling. Wala na nga tayong asenso, nanakawin pa ang Pera ng bayan. We don’t need thief and liars to lead us by 2016. We need the Robredo, Poe, to dig up their grave and help us to fight for good governance. We are a nation of poor, OFWs, Nanny, And become 2nd class citizen at home, our business are run by, Chinese, Spanish, and American. We are still lagging behind, because we become corrupt.

  8. You raise a good point which has entered my mind, why the city and the provincial government not involved? Because at the end of the day, the Ilongos will be the one who will benefit from this, 2 hotels and a convention center, is it because the owner is the DOT. You cannot just say it is overpriced just because Mr. Mejorada says so, based on what? Let the evidence speak for itself. Megaworld did not donate the property out of the goodness of their hearts, it’s all about MONEY.

  9. As a Professional Civil Engineer and a building consultant, almost all projects properly designed and constructed were subjected to “change orders”. It is the additional work done that increases the original cost. The additional work depends if structurally and architecturally needed or mandated by the owner of the building. That is where construction management comes into the picture. It is always a big issue of final payment after project is constructed and ready for occupancy. A well managed project must have a daily record of activity – progress of construction and progress of payments. Questions that arises after project is completed are hard to reasonable answers specially if project records were not keep in safe place. Their is a learning curve to well manage project between owners and contractors.

  10. mega world will use the helipad when its executives visit their hotels, building offices etc. at the former old iloilo aiport. Simple as that. Using govt money. That’s the private, public partnership PPP they are talking about. Government building for the country’s ultra rich

  11. vagoneto rieles on

    Three points regarding Mr. Ramos’ piece:

    a) Senator Drilon deferred to the Blue Ribbon Committee and submitted himself to questioning.There are those who believe that this is beneath them..and snub the Senate.
    b) Mr. Tan, the donor of the property is within his rights to ask that his design and building planbe followed, as the building should blend with the overall site development. The new Iloilo airport terminal, by the way, was designed and built by the Japanese financiers who insisted on this to ensure that it conforms with international concepts and functionality.
    c) Mr Ramos’ dissertation is conjecture, as it depends on hypotheses. “..If the two floors were not added..”; “..If the building were located elsewhere..”.

    Mr. Ramos might have had reliable exposes` before. This one just seems inadequate..and the ‘Ilongos’ have every reason to be upset about the offensive, and undeserved heading.

    • Your title is an exaggeration and a gross insult to the Ilonggos. If I say that Ilocos is the land that breeds a dictator or Pampanga is the land of whores & thieves or Makati is the capital of corrupt families then what do you think. You are insulting the whole Ilonggo nation and you are not after corrupt individuals but you are trading bigotry.

      I can surmise that you are ‘dugong aso’ is that good?

      I would like to ask the Iloilo City Govt. to declare you as ‘Persona Non Grata’ and unleash the Ilonggos wild dogs wherever you are.

      This is to make even with your grandstanding. If you attempt to become a well known columnist you have chosen the wrong way.

      The only way you can make amends is to give a public apology. In that way you can become more popular and maybe we can accept you as an ill-fated writer, dumb and foolish in his attempt to reach the limelight.

  12. Im wondering couldnt they find similar buildings in size constructed for private corporations & compare how much it costs them to build. If it shows a huge difference in price there you will have it, corruption. Like those hospital beds that binays wife purchased from tui. Each one cost over P500,000 yet if a private hospital bought them it would cost about P30,000 each. There you see corruption plain & simple. Now all you need is a quantity surveyor to work out how much concrete, steel bars & whatever is needed for that project. So the basc costs of raw materials will be the same for anyone. Then you look at the manpower that was used & that total cost & you can work out the total profit of the company. Now we all know they have to make profit but im sure the experts know what is truly exxessive profit & if they dont then get rid of them & get experts who do.

    • I have suggested the same to do actual costing. Get a Quantity Surveyor. Getting the volume of concrete for both substructure and superstructure used would be easy as long as you have the structural engineering design of the building.

    • That is quite easy to figure out whether the project is overpriced. A good quantity surveyor can verify the BOQ rates in the contract against the current rates then check the quantities whether it fits the approved construction drawings. They need not check everything because an experienced quantity surveyor can readily see and flag over priced rates!

    • Like Papelito stated, here are the pertinent documents that needed to be analyze to fully know if indeed a project has been bloated or not. A good estimator can easily accomplish this.

      DPWH Documents:

      1. Approved Working Drawings
      2. Building Materials & Work Specifications
      3. Detailed Estimates/ Approved Program of Works
      4. Department Order Cost Analysis
      5. Agency’s Canvass Sheets

      Bidder’s Documents:

      1. Detailed Estimates
      2. Bid Summary
      3. Bill of Quantities
      4. Bid Form

  13. I see this whole transaction as the grand scheme of a manipulative developer, Andrew Tan of Megaworld, to build his conceived convention center without having to pay a single centavo for it and to even get a tax credit for the other real properties ( lots and a hotel building) in the area. Megaworld Inc. which constructed a hotel building in the area adjacent to the site of the planned ICC suffered a continued slack in sales due to the absence of tourists. His solution – tie up with the government’s tourism dept by a donation contract fraught with one-sided self interest and malevolence which would build his convention center without him having to spend for its construction and with him getting a huge tax credit aside for his lots and hotel building in the area. His terms – he donates the lot to the Tourism Dept. but he puts in as a condition sine qua non the construction of the convention center according to his own plan drawn up by Architect W. Coscuella. In other words, Mr. Ramon Jimenez, has no choice but to take in the Arch. Coscuella as part of the deal.

    The intriguing part of this deal according to the revelation of Mr. R. Jimenez himself, at the keen questioning of Sen. Serge Osmena, is that they are committed to turn the whole project over to the private sector once the building is over. They will accept bids for the takeover of the finished Convention Center. The probing mind of Senator Osmena saw through the whole scheme. I saw this too. Megaworld will bid for the eventual takeover and repossession of the Convention Center.

    The issues at play then is not just overpricing but the more critical crimes of using the DAP for its construction (as admitted by Sen. Drilon) and defrauding the govt of taxes due it through an anomalous scheme of tax evasion. Calling Kim Henares to investigate this angle. Clearly, within this senate investigation must be found that the government was grossly disadvantaged in violation of RA No. 3019.

    • The result ICC will be given away to MEGAWORLD, as arranged by Sen. Drilon. I think Drilon committed an act of conflict of interest when he talked with MEGAWORLD. Drilon admitted this under oath during the BRC hearing. He should have had his hands off. I was appalled that he said it if he does not understand that even the appearance of conflict of interest is reprehensible, let alone doing it blatantly. He admitted this as if it is a common practice. Perhaps, it is in the Philippines.

    • I completely agree. It is grand conspiracy. The Brazen Temerity of people like Senate President Drilon and the Idiocy of people like DoT Secretary Ramon Jimenez who agreed that the architectural and engineering be imposed upon them by MegaWorld. He even said during the Senate Blue Ribbon Committee that he is “proud to be the owner of the beautiful” ICC. What do you expect from an advertising executive that P-Noy appointed as Secretary of Tourism.

    • Tourism Secretary Jimenez had a choice of NOT agreeing, but he did? Why? Either because Senate President Drilon forced him to agree or he is part of the conspiracy. The third possibility is that Jimenez is just plain Stupid, which is not hard to see.

  14. Mr. Ramos…It’s insult to Ilonggos to call Iloilo the corruption captial of the Philippines. Don’t you have better subject to describe the issue on Ilolilo convention center.

    • There are many Ilonggos who agree that Iloilo is the Corruption Capital of the Philippines, my own wife included.