Manila Bulletin
Philippines
P1.12B gov't compromise deal with private contractor to become void without Congress OK
Philippines
P1.12B gov't compromise deal with private contractor to become void without Congress OK
P1.12B gov't compromise deal with private contractor to become void without Congress OK
Published Jun 3, 2020 12:00 am
By Ben Rosario
The chairman of the House Committee on Metro Manila Development has warned that a P1.12 billion compromise agreement to settle a legal controversy between the government and a private contractor will be voided without congressional imprimatur.
Manila representative Manuel Luis “Manny” Lopez (Photo courtesy of Manny Lopez Facebook / MANILA BULLETIN)
Manila Rep. Manuel Lopez aired this warning in a May 21 letter to General Manager Marcelino Escalada Jr. of the National Housing Authority who is reportedly set to carry out the settlement with RII Builders Inc. (RBI), contractor of the defunct Smokey Mountain Development Corporation and Reclamation Project (SMRDP).
The Commission on Audit had earlier flagged the NHA's plan to pay RBI P1.12 billion and transfer five hectares of government land to settle the court cases with the contractor.
It will be recalled that RBI sued NHA in its efforts to recover some P4.4 billion in assets it lost as a result of the joint venture agreement for the implementation of the SMRDP.
The COA position is contained in an Audit Observation Memorandum it released recently. In the AOM, the audit agency took note of a legal comment made by the Office of the Government Corporate Counsel that pointed out that there are indications that the NHA may have allegedly “overpaid” the RII Builders Inc (RBI), SMRDP contractor by as much as P300 million.
In his letter to Escalada, Lopez said the compromise agreement cannot be held as legal unless it has been approved by Congress.
“Without the approval of Congress, sought through the Commission and the president, who shall provide recommendations, any such settlement or agreement can be considered void,” he said.
Lopez said this is provided under Executive Order No. 292 and the Administrative Code of 1987.
The administration lawmaker asked Escalada to submit to Congress a copy of the proposed compromise agreement. He said NHA must also submit its recommendation on a “thorough review and audit of the transactions between NHA and RBI.”
“Ultimately, I trust we are one in our mutual desire that all public funds are allocated only for legitimate purposes. No excessive or abusive expenditures are made, and any agreement disadvantageous to the government is disallowed,” said Lopez.
In the AOM submitted on May 12 by senior auditors Liza de la Cruz and Radito Chin, COA called on the NHA to submit a copy of the comments of the Office of the Government Corporate Counsel on the out-of-court settlement between RBI and NHA.
The audit team added: “As a consequence, evaluation of the validity of the transactions could not be had.”
The AOM revealed that certain documents, including the Compromise Agreement signed on November 21, 2018, have not been submitted by NHA.
The auditors pointed out that this violates the freedom of information policy “that recognizes and confirms the commitment of the Government to full public disclosure, transparency, and accountability in public service.”
The OGCC, which provides legal services to government-owned and controlled corporations such as the NHA, had reviewed the proposed compromise agreement that resulted from a planned amicable settlement of RBI, which is owned by businessman Reghis Romero II.
Government Corporate Counsel Elpidio Vega advised NHA to reconsider the planned settlement of the court cases with RBI.
Vega, in a letter sent to Escalada on October 16, 2018, cautioned NHA on the supposed “variance” between its own computation and the proposed settlement with RBI amounting to P1.12-billion plus five (5) hectares of government property in Vitas, Tondo.
Citing a computation made by NHA’s accounting department to the agency’s board, the OGCC disclosed that the NHA may have allegedly “overpaid” the Romero-owned firm by as much as P300 million.
Aside from the alleged variance, Vega urged the NHA to defer its mediation with RBI stressing that any possible settlement should involve proper computation of interest as well as proper valuation of the properties to be given as payment to the firm.
“Given the manifest variance in the findings of NHA’s Accounting Department as well as Board Resolutions , such findings and resolutions have to be harmonized and justified for the benefit of both the NHA and its Board,” Vega said.
Manila representative Manuel Luis “Manny” Lopez (Photo courtesy of Manny Lopez Facebook / MANILA BULLETIN)
Manila Rep. Manuel Lopez aired this warning in a May 21 letter to General Manager Marcelino Escalada Jr. of the National Housing Authority who is reportedly set to carry out the settlement with RII Builders Inc. (RBI), contractor of the defunct Smokey Mountain Development Corporation and Reclamation Project (SMRDP).
The Commission on Audit had earlier flagged the NHA's plan to pay RBI P1.12 billion and transfer five hectares of government land to settle the court cases with the contractor.
It will be recalled that RBI sued NHA in its efforts to recover some P4.4 billion in assets it lost as a result of the joint venture agreement for the implementation of the SMRDP.
The COA position is contained in an Audit Observation Memorandum it released recently. In the AOM, the audit agency took note of a legal comment made by the Office of the Government Corporate Counsel that pointed out that there are indications that the NHA may have allegedly “overpaid” the RII Builders Inc (RBI), SMRDP contractor by as much as P300 million.
In his letter to Escalada, Lopez said the compromise agreement cannot be held as legal unless it has been approved by Congress.
“Without the approval of Congress, sought through the Commission and the president, who shall provide recommendations, any such settlement or agreement can be considered void,” he said.
Lopez said this is provided under Executive Order No. 292 and the Administrative Code of 1987.
The administration lawmaker asked Escalada to submit to Congress a copy of the proposed compromise agreement. He said NHA must also submit its recommendation on a “thorough review and audit of the transactions between NHA and RBI.”
“Ultimately, I trust we are one in our mutual desire that all public funds are allocated only for legitimate purposes. No excessive or abusive expenditures are made, and any agreement disadvantageous to the government is disallowed,” said Lopez.
In the AOM submitted on May 12 by senior auditors Liza de la Cruz and Radito Chin, COA called on the NHA to submit a copy of the comments of the Office of the Government Corporate Counsel on the out-of-court settlement between RBI and NHA.
The audit team added: “As a consequence, evaluation of the validity of the transactions could not be had.”
The AOM revealed that certain documents, including the Compromise Agreement signed on November 21, 2018, have not been submitted by NHA.
The auditors pointed out that this violates the freedom of information policy “that recognizes and confirms the commitment of the Government to full public disclosure, transparency, and accountability in public service.”
The OGCC, which provides legal services to government-owned and controlled corporations such as the NHA, had reviewed the proposed compromise agreement that resulted from a planned amicable settlement of RBI, which is owned by businessman Reghis Romero II.
Government Corporate Counsel Elpidio Vega advised NHA to reconsider the planned settlement of the court cases with RBI.
Vega, in a letter sent to Escalada on October 16, 2018, cautioned NHA on the supposed “variance” between its own computation and the proposed settlement with RBI amounting to P1.12-billion plus five (5) hectares of government property in Vitas, Tondo.
Citing a computation made by NHA’s accounting department to the agency’s board, the OGCC disclosed that the NHA may have allegedly “overpaid” the Romero-owned firm by as much as P300 million.
Aside from the alleged variance, Vega urged the NHA to defer its mediation with RBI stressing that any possible settlement should involve proper computation of interest as well as proper valuation of the properties to be given as payment to the firm.
“Given the manifest variance in the findings of NHA’s Accounting Department as well as Board Resolutions , such findings and resolutions have to be harmonized and justified for the benefit of both the NHA and its Board,” Vega said.