Councilors say Surigao City mayor’s proposed P120 million loan is “too high”

SURIGAO CITY (MindaNews/15 Dec) —  The P120 million loan Mayor Ernesto Matugas has proposed for the purchase of heavy equipment is “too high” for a local government already struggling financially and some councilors want the amount reduced.

Councilors Luceniano E. Lancin and Jose Expeditus B. Bayana noted that the P120 million price tag for heavy equipment purchase is excessive.

The mayor had earlier said the equipment was to allow the city to embark on the most basic infrastructure projects such as road repair. He also said the city was well within its capacity to borrow.

“We are proposing for the reduction of the amount because there are basic services to be affected by this, and to think that our IRA will be reduced by 54 million next year,” Lancin said, referring to the city’s share in the Internal Revenue Allotment, which will see a huge cutback because of the Supreme Court decision reversing again the earlier ruling on the creation of 16 new cities.

Lancin also called for rebidding of the project, although a winning bidder has been chosen and City Hall has insisted the bidding process was above board.

Bayana said City Hall should not take their opposition in a negative light because “what at stake here is a big amount of people’s money.”

Lancin and Bayana, both lawyers, are leading the majority in scrutinizing the loan whose bidding process was reportedly railroaded. Several councilors have noted that the Bids and Awards committee had already declared a winning bidder even as the city’s Local Finance Committee had yet to certify the availability of funds  to pay for the loan.

Earlier, Councilor Baltazar C. Abian, Ways and Means committee chair, said several “technicalities” in the contract governing the loan with the Development Bank of the Philippines (DBP) were too significant to ignore. He said a number of councilors feared they would be sued, thus their decision to put the brakes on the loan.

But Matugas defended the loan, saying procurement procedures have been followed. “I,  too, fear  getting sued. We ensured that the contract is above board and to the benefit of our people,” he said.

He said it was more beneficial to own equipment than rent them, saying the city government spends around P3 million in five months to rent out a heavy equipment unit.

In addition, Matugas said the city would not spend a centavo from its IRA to pay for the loan, saying the equipment would be rented out to private contractors so that these will become “self-liquidating.”

He said the councilors should also think of the money to be saved from rentals when the city intitiates infrastructure projects such as barangay roads, public cemetery and mass housing.

Matugas said the loan, which has a 10-year maturity term, will be paid in seven to eight years. He said he has convinced the bank to waive the prepayment penalty.

Below are prices and type of heavy equipment:

PhP 12-M: One unit Brand New Crawler Dozer 4 stroke cycle, 6 cylinder diesel engine, hydrostatic drive 120 hp minimum; Close type operator’s cabin amounting;

PhP 13-M: One unit Brand New Wheeled Type Excavator 4 stroke cycle, diesel engine 570 liters minimum, (0.57) minimum bucket capacity,  110 hp minimum closed type operator’s canopy

PhP 17-M: One unit Brand New Crawler Dozer 4 stroke cycle 6 cylinder, 150hp minimum diesel engine, hydrostatic drive close deluxe;

PhP 10-M: One unit Articulated Wheel Loader 4 stroke cycle 6 cylinder, 3 power mode diesel engine (low, medium, high); 130 hp., minimum, close type operator’s cabin, 2.5 cu.m., minimum bucket capacity;

PhP 15-M: One unit Brand New Wheeled Type Excavator, 4 stroke cycle, 6 cylinder diesel engine, 120 hp., minimum 0.60 cu.m. minimum bucket capacity, close type operator’s cabin;

PhP 16-M: One unit Brand New Motor Grader 4 stroke cycle, 6 cylinder diesel engine (low high) 140 hp., minimum articulated frame, close type operator’s;

PhP  6-M: One unit Brand New Vibratory Single Drum Roller 99 hp., minimum diesel engine, articulated chassis, hydrostatic drive for both drum and wheel maximum compaction force 15, 000 kg. minimum;

PhP  7-M: One  unit Brand New Loader/Backhoe 4 wheel drive, diesel engine 90 hp., minimum, close type operator’s cabin with Jack hammer;

PhP 11-M: Two units Brand New 6- Wheeler’s Dumptruck 4 stroke cycle, diesel engine turbo charged 240 hp, minimum, 5.0 cu.m. minimum dump capacity airconditioned TIER II/EURO II certified at Php 5.5-M per unit.

PhP 13-M:  and Two  units Brand New 10-Wheeler’s Dumptruck 4 stroke cycle diesel engine turbo charged 340 hp., minimum 10 cu.m. minimum dump capacity, airconditioned, TIER II/EURO II certified at Php 6.5-M per unit. (Roel Catoto/MindaNews)-