Bayan Muna party-list Representative Carlos Isagani Zarate on Wednesday said the Department of Transportation (DOTr) “parked” funds for its railway projects with the controversial Procurement Service-Department of Budget and Management (PS-DBM).
During the resumption of the House budget deliberations, Zarate said, “DOTr has the expertise on railway technical issues but asked why did it have to use PS-DBM which is mainly mandated to procure commonly used supplies and equipment for other government agencies?”
The lawmaker asked which projects utilize the PS-DBM.
In response, Bataan Representative Jose Enrique Garcia III, sponsor of the DOTr’s proposed P150.76-billion budget for 2022, said that the P350-billion Metro Manila Subway Project and the P777-billion North-South Commuter Railway projects are the latest projects utilizing the PS-DBM.
“The PS-DBM in effect is handling P350 billion in the Metro Manila Subway project and P777 billion in the North-South Commuter Railway project. All in all it is a whopping P1.127 trillion worth of railway projects,” Zarate said.
“Also with this kind of record why would the DOTr transfer more than a trillion peso projects to the controversial agency when they are hardly qualified or experts in rail or train matters?” the lawmaker asked.
“We should get to the bottom of this because this may just be another Pharmally issue and taxpayer’s money or even foreign loans are being siphoned off to enrich certain individuals,” he said.
Garcia, in response, said “the DOTr’s designation of PS-DBM as procurement agent does not involve obligation or disbursement of funds from DOTr to PS-DBM. PS-DBM only covers the steps from Pre-Procurement to issuance of BAC (Bids and Award Committee) Resolution Recommending Award.”
“After this BAC Resolution, DOTr issues the Notice of Award, DOTr issues the Notice to Proceed, DOTr signs the contract, and DOTr obligates and disburses all payments to the winning bidder. No funds are transferred to PS-DBM for the procurement, hence, there is no ‘parking of funds’ under DOTr’s Procurement Agent MOA with PS-DBM,” Garcia said.
In a separate statement, the DOTr said Zarate was “not listening” during the budget deliberations.
It said that Garcia clearly responded to Zarate’s question on the DOTr’s procurement of Build Build Build railway projects in PS-DBM.
The DOTr said agencies can undertake procurement through PS-DBM in different ways.
First is through the Agency Purchase Request (APR) route, wherein an agency transfers funds to PS-DBM and wherein PS-DBM undertakes both procurement and contract implementation activities.
“This is what Cong. Zarate appears to be aware of, and mistakenly assumed to be what DOTr is doing,” the agency said.
Second is through the Procurement Agent (PA) route pursuant to Section 7.7.3 of RA 9184, which does not involve any transfer of funds to PS-DBM, since PS-DBM only undertakes procurement activities, and it’s still the agency that undertakes contract implementation activities. This is what DOTr is undertaking with PS-DBM for its Build Build Build rail projects.
“To correct this misunderstanding, it is noted that the DOTr is not only a member of the Bids and Awards Committee (BAC)— the Technical Working Group (TWG) of the BAC is also composed of highly qualified railway consultants of DOTr, along with engineers and other representatives from the relevant DOTr, PNR, and LRTA Project Management Offices,” DOTr said.
Moreover, the DOTr said it utilizes the PS-DBM for its Official Development Assistance (ODA) financed Build Build Build rail projects, wherein the concerned ODA Partner (e.g., the Asian Development Bank, Japan International Cooperation Agency) is involved at each procurement milestone.
“DOTr’s Procurement Agent arrangement with PS-DBM for its Build Build Build rail projects has proven to be markedly successful, enabling DOTr to increase its number of awarded rail contracts from a mere 9 contracts in July 2016 to 35 contracts as of July 2021 (average contract amount of 16 billion), with 12 more contracts already ongoing bid evaluation, 7 more contracts with upcoming bid submissions, and 14 more contracts for publication,” it said.—LDF, GMA News
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