Malaybalay council eyes city takeover of P225M market complex project

MALAYBALAY CITY (MindaNews/18 April) – The city council here passed a resolution Tuesday asking Mayor Ignacio W. Zubiri to take over the controversial P225-million public market complex project and notify the contractor about it.

The city council said in its resolution that contractor H.R. Lopez Co., Inc., despite two extensions given, failed to meet the target date of completion, the construction company saying it was due to bad weather and right-of-way problems.

“After the contract period had long expired, the company’s delay has unjustly deprived the people of Malaybalay of the services that the proposed projects would have provided,” Councilor Roland Deticio said in his draft of the resolution.

Zubiri refused to comment on the resolution yet as of last Tuesday.

The city council passed the resolution unanimously after Deticio read his draft to “severe the city government” of the effects left by the unfinished three-phase infrastructure project.

He said the Land Bank of the Philippines has informed the city council that it intends to terminate the loan agreement of the remaining loan amount of about P110 million not yet withdrawn and which the bank considered “idle.”

According to the resolution, the firm bound itself for the planning, design, site, development, and construction of the public market, bus terminal, and commercial building for P225,330,795.38 originally within 540 days upon receipt of the notice to proceed.

But only the public market was finished and turned over to the city government on September 9, 2009. The construction of the two remaining buildings, the resolution said, is yet to start.

In February 2011, MindaNews reported that the contractor declined the city government’s offer to continue the stalled project through a turn-key scheme.

Marianito G. Rivera, vice president of H.R. Lopez, said in his letter to the city council dated January 27 but received only on February 14 that they would continue to finish the project but they will “abide by the terms and conditions” of the contract.

“We hope that with the above stand of the company, we can now proceed to start the remaining works at the soonest possible time,” he added.

Vice Mayor Victor Aldeguer told MindaNews then that it was a blow to their proposal to pursue the project based on the preference of the city government. The contract signed in 2004 provides for periodic collection based on progressive output.

Rivera said the decision was arrived during the firm’s board of directors meeting on January 26, 2011, seven days after he met city officials here.

The firm insisted that the length of time for the completion of the project be based on the original approved PERT-CPM schedule.

The company also asked possession of the two other structures in the three-phase project.

Last month, in a closed-door meeting, the city government opted to negotiate with the contractor in an effort to complete the project amidst the possibility of legal battle.

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

The meeting, held at the city council session hall, was prompted by a November 15 letter sent by the contractor demanding full possession of the construction site, a term included in the contract. But the city government refused the contractor’s demand due to difficulty relocating vendors back then. H.R. Lopez warned of a legal option if the city government would not give in, a warning prompting possible termination of the contract.

Back then, some of the city councilors preferred to initiate negotiation. The city government, Aldeguer said, offered to H.R. 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 said then 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.

The city government, in response to at least five requests for turnover during the administration of former mayor now Rep. Florencio T. Flores Jr. (2nd Dist.), refused to turn over the site because of the difficulty in relocating the occupants.

The city’s position demanded 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.(Walter I. Balane / MindaNews)