Legal battle seen over Malaybalay’s P225-M market project

MALAYBALAY CITY (MindaNews/13 Jan) – The Malaybalay City Government is at a crossroads over its controversial P225-million public market-terminal-commercial building complex.

The contractor of the ill-fated project, H.R. Lopez Co. Inc., has requested for the city government to turn over the site of the construction to them so they can continue building or they may opt to sue the city government, Vice Mayor Victor Aldeguer told MindaNews.

Aldeguer said the city council is now deliberating the city government’s final option in response to the contractor’s November 15 letter requesting the turnover. The city council held a closed door meeting with Mayor Ignacio W. Zubiri, City Engineer Teodocio Pabillaran, and other city officials Tuesday.

Signed by lawyer Jose Miguel Palarca, the firm’s counsel, the request is yet the firm’s latest in a string of requests for the turnover, which was turned down by the previous city government administration.

The firm sent five requests for turnover during the time of Mayor Florencio T. Flores Jr., Aldeguer said. But the then mayor, now second district representative, chose not to turn over the site because of the present occupants, including market vendors and leases.

“What will we do to do the vendors, where will we relocate them?” Aldeguer said, adding that a temporary relocation was never considered an option because of its cost.

Aldeguer said the contractor has insisted on the turnover, an option that is provided in the terms of reference of the contract and agreement for the project signed in 2004.

The contractor has pointed out in the letter-request that the city government’s refusal to turn over is a breach of contract.

But Aldeguer noted that the city is not likely to turn over the project because of the occupants and another reason, which he refused to reveal in order not to preempt the meeting scheduled next Wednesday, January 19.

He said that during last Tuesday’s closed door meeting, the councilors already had a plan to propose to H.R. Lopez next week. But he refused to describe the plan.

Aldeguer said in case the contractor will not agree with the city’s proposal, then there is a big chance that they may take legal action against the city, a situation that may prompt the city to terminate the contract.

But he maintained that nothing is final yet until the Wednesday meeting. Aldeguer said they hoped they find the solution to the problem. “Most of us wanted this to end already so we can continue building the project,” he said.

He admitted that a legal battle is a costly and unwanted option. “But the city will face it,” he added.

Only one of the three buildings has been “completed” and turned over by the contractor to the city government in 2009. Also, only one floor of the two-floor public market building is operational.

The project includes the construction of an integrated bus terminal and a commercial building.

The city government of Malaybalay opened its controversial new public market on September 18, 2009 with simple rites amidst uncertainties whether the two other phases of the project would push through.

The opening came two years late of its target opening date of November 2007.

Former Mayor Florencio T. Flores told MindaNews in September 2009 the city government opened the market even if it is not yet complete following the expiration of a nine-month extension given to H.R. Lopez.

Flores challenged his detractors to go to court if they have proof that indeed money changed hands in the project.

He also broke his silence on the allegations that the city government hired a contractor that ended up subcontracting the project to another firm.

“It’s for them to settle. We did not deal with a subcontractor,” Flores said. He added that the supposed subcontracted firm, Dreamworks, Inc., who tried to collect payment from the city government, has stopped doing so.

But Flores said they have seriously evaluated the capacity of H.R. Lopez whether they are able to finish the whole project, adding that extending the project for another term with the contractor is “no longer an option.”

He cited the firm’s doubted capacity and the legal skirmish that fraught the project’s contract and payment scheme as the mix which caused the delay of the 540-day project.

Flores said that for the remaining two phases, they will have to pick from only two options: to rebid or for the City Engineer’s Office to take over. He has been mum yet about possible legal action against the contractor.

In March 2009, Flores told this reporter they are leaving it to the City Legal Office to study the right move after the City Engineer’s Office certified that the contractor had not finished the project despite the nine-month extension.

The firm is supposed to finish the whole project within the extended time, including the integrated bus terminal and the commercial complex adjacent to the public market.

Based on the slippage alone, Flores said, the city government can already take action against the firm.

Then Vice Mayor Ignacio W. Zubiri, now mayor, shared Flores’s position but stressed there should be amicable settlement.

The project was initiated in 2004.

The project was first extended from February to July 2007. In July 2007, the Commission on Audit’s Legal and Adjudication Sector considered the contract void, a decision which the firm appealed in September that year.

Construction was stopped in September 2007, according to city engineer Teodocio Pabillaran, but H.R. Lopez said they stopped in November 2007.

On July 3, 2008, the COA Legal and Adjudication Sector declared no legal impediments to the validity of the contract, prompting the firm to request for the nine-month extension since “they are ready to complete the balance of work.”

Flores endorsed the request on August 1, 2008 to the city council, which approved the extension three months later, on October 21. But councilors noted that the firm resumed construction on August 15, or prior to the approval.

Zubiri said then that the P250-million loan acquired for the project will incur interest only when money is withdrawn. He said rules might allow another extension if the firm asked for it. “But I prefer termination,” he said. (Walter I. Balane / MindaNews)