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PRESIDENT Gloria Arroyo has expressed concern on the
ballooning cost overruns for foreign-funded projects last year,
government officials said Wednesday.
“The cost overruns are becoming
a worry to the President . . . it calls her attention,” Budget
Secretary Rolando Andaya Jr. said.
Socioeconomic Planning Secretary
Augusto Santos on Tuesday presented the projects which incurred cost
overruns to President Arroyo and her Cabinet members.
Andaya said that to address the
problem, the government will harmonize the rules on cost overruns.
Public Works Secretary Her-mogenes
Ebdane Jr. said that the National Economic and Development Authority
(NEDA) disapproved the further funding of their projects because of
cost overruns.
Ebdane, however, said his agency
will still push for the funding of a flood-control project.
Documents obtained from NEDA
showed that 19 ongoing projects funded by foreign donors incurred
cost overruns amounting P31.15 billion last year from P30.33 billion
in 2006.
Of the 19 projects, nine
undertaken by the Department of Public Works and Highways incurred
P12.70-billion overruns; four by the Department of Transportation
and Communications, P6.7 billion; four by the National Irrigation
Administration, P4.1 billion; one by the Bases Conversion and
Development Authority, P6.47 billion; and one by the Light Rail
Transit Authority, P1.12 billion.
NEDA said the reasons that the
five agencies gave for such overruns were high bids, consultancy
services, additional civil works, rights-of-way and land
acquisitions, currency-rate movements, increased administrative
costs and claims for price escalations.
Of the 19 foreign-funded
projects, 16 worth P26.23 billion were funded by the Japan Bank for
International Cooperation; one costing P2.47 billion by South Korea;
also one worth P1.24 billion by China; and another one costing P1.22
billion by the World Bank.
The cost overruns are subject to
reevaluation by the NEDA Investment Coordinating Committee.
Under the guidelines and
procedures of the authority and the committee, an ongoing program or
project involving changes in costs, scope, implementation period or
extension of loan validity beyond 12 months and resulting in cost
overruns or time overruns of more than 20 percent is subject for
reevaluation.
As of last year, the total
cumulative loans obtained as official development assistance, or ODA,
which financed 125 ongoing projects, reached $9.28 billion.
--Darwin G. Amojelar
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