by MALOU MANGAHAS, TITA C. VALDERAMA, and KAROL ILAGAN

This report comes with photos of project sites and the contractors' offices, and summary tables on the profile of the companies that bagged the biggest contracts, by value, from the DPWH.

SHE HAS been president for the last seven years, but Gloria Macapagal Arroyo could also be called “queen” — queen of roads, that is.

	QUEEN OF ROADS. Arroyo's obsession with road projects is such that she wanted networks of roads and bridges rolled out across the nation, so that she could visit the towns and provinces on weekends and while there, preside over project inaugurals. [photo by Tita Valderama]

Arroyo seemed so obsessed with roads that her first budget secretary, Emilia T. Boncodin, recalls: “You could point to a road anywhere on the map of the Philippines, and she could tell you its name. She had memorized it all.”

According to Boncodin, the president had told her first Cabinet that she wanted to roll out networks of roads and bridges across the nation so that on weekends, she could visit the towns and provinces and while there, preside over project inaugurals.

Quickly, public works officials and contractors began moving gravel, sand, and equipment just so Arroyo could regularly inaugurate roads that are now bound to be part of her legacy. To be sure, she is not the first Philippine president to turn to public infrastructure as political shrines that would perpetuate his or her memory. “It just so happens,” says Boncodin, “that the easiest projects to build are roads and bridges.”

They are, however, apparently not the cheapest, especially when the government is footing the bill. Based on a two-month scrutiny of the online database of the Department of Public Works and Highways (DPWH), the PCIJ has found that the total value of civil-works contracts the department awarded from 2000 to 2008 reached a staggering P138.5 billion ($2.87 billion).

	NEXT PART 2 looks at a number of policy issues and problems — from precipitate haste in project rollout to the lack of capability of procurement officials in verifying contractors' credentials, to the many lump-sum funds for civil works projects lodged with the Department of Public Works and Highways.

Yet a big proportion of those projects did not result in new roads. Instead, over half of the 27,535 contracts awarded during the period involved the regraveling, repair, maintenance, or improvement of barangay and local roads.

And while Public Works Secretary Hermogenes Ebdane Jr. says that “infrastructure investment has been recognized as a critical pillar in economic development and poverty alleviation under the administration of President Gloria Macapagal Arroyo,” these projects did little to reduce poverty incidence in eight of the 10 provinces that got the biggest value of contracts.

POLITICS AND PROFIT
In truth, the rush to roll out multiple projects might have been driven by a combination of political considerations and personal concerns for profit-making. One congressman, for instance, points out that regraveling is often done on farm-to-market roads and repeated almost on a yearly basis because “this is the easiest thing to do to make money. The contractor puts gravel on a road, and when heavy rains pour, the gravel is washed away, and you are back to having a dirt road again that needs regraveling.”

The less-than-altruistic motivation also led to the flouting of laws, while the fast-paced awarding of contracts only helped to overwhelm a bureaucracy already riddled with inefficiency and ineptitude. Thus, obscure contractors, including some with insufficient licenses and registration papers, were able to snag government projects worth billions of pesos each even though there appeared to be no proof that they were capable of doing quality work.

	[photo by Tita Valderama]

Fixated as she was on roads, Arroyo, according to Boncodin, “did not give as much thought to cost and quality.”

The PCIJ had conducted its review of the DPWH contracts database as a follow-up to the January 2009 report of the World Bank’s anti-corruption unit, the Department of Institutional Integrity (INT), which established collusion and corruption in Bank-funded road projects implemented by the DPWH.

The PCIJ corroborated and correlated the DPWH database with other official databases on poverty, health and education; election turnout in 2004 and 2007; appropriate laws and relevant reports from registration, procurement, budget and audit agencies; statements of assets and liabilities of public officials; and interviews and site visits to the offices of the contractors in Metro Manila, Bulacan, and Batangas.

The PCIJ imported the database in its entirety, keeping intact the integrity of the information to the last decimal digit. The PCIJ later organized the database into a searchable file using a customized comma-separated values format program.

The PCIJ adopted this research method after DPWH officials denied a written request in January 2009, as well as repeated follow-up queries, for a spreadsheet version of the department’s database.

TOTAL DEALS: 27,535
A total of 27,535 contracts were posted on the agency's website, www.dpwh.gov.ph. These excluded as yet projects funded under the Priority Development Assistance Fund (PDAF), also derisively called “pork barrel” and other lump-sum project funds lodged with the DPWH for implementation.

In a written response to PCIJ’s queries, Secretary Ebdane indicated that the online data were not complete. He said that from 2004 to 2008 alone, “a total of P185.341 billion ha(s) been allocated covering 92,737 projects under the Department of Public Works and Highways.”

But the data on the DPWH website were enough to yield interesting information, such as the names of the top 10 companies that bagged the biggest value of contracts.

Because of their huge projects load, the PCIJ presumed that contractors that received from P2 billion to P5 billion worth of DPWH projects over the last seven years would be registered as corporations. Yet the PCIJ found out that four contractors in the top 10 list operate only as sole-proprietorship entities.

In theory, these entities should have no problem taking on low-cost projects, which they are allowed to bid on under the law. In reality, they clinched billion-peso project portfolios, and did so by winning multiple low-cost to big contracts, with the acquiescence of the DPWH's Bids and Awards Committees (BAC).

Boncodin offers an explanation: “The DPWH BAC members did not know, they didn't check, or the contractors fooled them.” She adds, “obviously, they (contractors) have very, very powerful connections.”