Malaybalay City okays P409-M loan for road project

MALAYBALAY CITY (MindaNews/30 June) — The city council approved earlier this month to apply for a P409-million from the Land Bank of the Philippines to complete the concreting and widening of “farm to market” roads in the Basakan area, the city’s agricultural district, a copy of a resolution showed.

The road project includes the Barangay Violeta-Apo Macote road section, Apo Macote-Sto. Nino junction Bangcud-Nabag-o road section and the Simaya to Bangcud road section.

The resolution said the project was certified as “a local infrastructure and/or other socio-economic development project in accordance with the approved Annual Investment Plan” of the city for 2014.

Vice mayor Roland Deticio told MindaNews via telephone Monday the city government needed to apply for a loan to avoid yearly increases in construction costs if the project would be financed on annual allocations.

Deticio said that when they started the project the cost per kilometer was only P18 million.

“Now it is between P25to 25 million per kilometer,” he added. He said the increase in cost per kilometer per year is between P3 and 5 million.

He explained the city can avoid bigger costs with lumpsum financing of the project [through the proposed loan].

According to the resolution sponsored by City Councilor Warren Pabillaran, the loan would be paid in 15 years inclusive of two years grace period on principal.

The resolution authorized Mayor Ignacio W. Zubiri to “full power and authority to represent the city government in negotiating the terms and conditions for the said proposed loan.”

The loan’s principal, according to the resolution, will be payable in 52 equal quarterly payments to start at the end of the ninth quarter from date of initial loan release. The interest, on the other hand is to be paid in 60 quarterly payments. The resolution did not cite the actual interest rate but mentioned that “prevailing LBB lending rates at the time of the availment …”

Deticio noted that the city government still has an outstanding loan with LBP – the controversial P225-million three-building public market complex with H.R. Lopez Co. Inc. as contractor. The project, started in 2004 and expected to be completed in 2007, has remained unfinished.

The official clarified that the city government is paying only for the principal and interest of around P100 million of the total loan amount, and promised to provide updates on the project.

He said the city government will use part of its annual internal revenue allotment as payment for the proposed loan for the road project. (Walter I. Balane/MindaNews)

URL: http://www.mindanews.com/top-stories/2014/06/30/malaybalay-city-okays-p409-m-loan-for-road-project/

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