Malaybalay negotiates with market contractor

MALAYBALAY CITY (MindaNews/21 Jan) – The City Government of Malaybalay opted to negotiate with the contractor of its ill-fated public market-bus terminal-commercial building project in a closed-door meeting with a representative of the firm in an effort to complete the project amidst the possibility of legal battle.

Vice Mayor Victor Aldeguer told MindaNews Thursday they have exchanged intentions on what to do with their six-year contract to build the three-structure P225-million project.

The project was originally planned to be completed in only 540 days in 2007. But misunderstanding and legal squabbles between the contracting parties stepped on the way.

The meeting, held at the city council session hall last Wednesday, was prompted by a November 15 letter sent by contractor H.R. Lopez Co., Inc. demanding full possession of the construction site, a term included in the contract but the city government refused to grant due to difficulty relocating vendors

The contractor has warned of a legal option if the city government would not give in, a warning prompting possible termination of the contract.

But some of the city councilors preferred to initiate negotiation.

The city government, Aldeguer said, offered to HR Lopez the plan to finish the remaining two phases of the complex but on condition that they do it on “turn-key” scheme and using the balance of the P225-million project started in 2004.

Aldeguer told MindaNews that of the P225-million loan made available to the city government by the Land Bank of the Philippines, only P110 million was left to fund the two remaining phases of the project. Only one phase, the wet and dry market, was completed in September 2009. Two more buildings have yet to be built.

The city government, in response to at least five requests for turnover during the administration of former mayor now second district Rep. Florencio T. Flores Jr., refuses to turn over the site because of the difficulty in relocating the occupants.

In the latest of the letters, signed by counsel Jose Miguel Palarca, H.R. Lopez has warned the city government it may be forced to take the legal path if the city fails to give in.

Aldeguer said the city government has retained its position not to turn over and asked the firm to work on turn-key basis.

He explained that in the scheme, the contractor will have to complete the project before they can claim payment. The city will only pay if the contractor completes the building.

In the present arrangement, payment is based on periodic accomplishment. In 2007, the contractor and the city government had a legal standoff at the Commission on Audit on the billing scheme.

In January 2009, Atty. Alfredo Reyes, director of the Commission on Audit in Region 10, opined that the payment of the contractor’s billing be based on the quantities accomplished multiplied by its unit cost in every billing period.

Aldeguer said that H.R. Lopez vice president Marianito Rivera was receptive of the city’s plan. But he did not commit any decision. Aldeguer quoted him as saying they need to meet the board to decide on the city’s proposal.

Aldeguer said Rivera vowed to report to the city government on the firm’s decision next week.

He noted that it is possible for the contractor to invoke adjustment of the P110-million project balance based on price escalation. “The contract provides for it. But we will have to check on it,” he added.

Aldeguer noted that H.R. Lopez expressed desire to finally complete the project.

He said the meeting was cordial. Mayor Ignacio W. Zubiri was in the meeting. After the opening remarks, the councilors allowed Rivera to speak. After him, each of the councilors gave their reactions.

MindaNews called Rivera in his office in Manila but a staff said he was on field. (Walter I. Balane / MindaNews)