Philippines: DOTR questioned for continued payments on stalled projects

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Senators raised concerns about the government's continued payments to transportation contractors for projects that are still under review.

At the Department of Transportation's (DOTR) budget hearing at the Senate, Sen. Nancy Binay noted several foreign assisted projects such as the Cebu Bus Rapid Transit System that the government must decide if it will still be continued.

Project: Cebu Bus Rapid Transit. The National Economic and Development Authority (NEDA) approved the project in 2014, with the World Bank as its lead financier. But, despite beginning full-swing construction in 2023, the project hit due to concerns over heritage protection.

'It's high time to cut our losses and decide once and for all if we will continue this project because the bleeding of this project still continues,' Binay said in mixed Filipino and English.

The project, envisioned to improve capacity and quality of Cebu City transport, has been under implementation for nearly 10 years since it was approved in 2014 during which it has faced several delays and lengthened timetable. Cebu Governor Gwen Garcia in February this year issued a memorandum to stop construction in heritage buffer zones of the provincial capitol and the Fuente Osmeña Circle.

Project: EDSA Greenways. Senate Minority Leader Koko Pimentel also brought up the stalled EDSA Greenways project, funded by the Asian Development Bank.

Transport Secretary Jaime Bautista said that the project will again undergo NEDA review due to projected higher costs for the period.

The five-kilometer Greenways project, meant to make the major thoroughfare more pedestrian-friendly with elevated walkways, was originally slated for completion in 2022.

Spending for plans in limbo

Binay pointed out that even if a project is under review, the loan and commitment fees will persist. Pimentel, meanwhile, questioned why the government is spending on projects that are still under review. Bautista confirmed that partial payments had already been made for these projects.

"We've been paying commitment fees for this project," Binay said, referring to the EDSA Greenways project.

However, when asked about the total amount paid so far, the DOTR was unable to provide an answer.

Pimentel then stressed the government's obligation to comply with loan agreement terms as honorable debtors, saying, "What happens is, we do not have the walkway but we keep on paying interest and sooner or later, even the principal."

A significant portion of the DOTR's 2024 budget was allocated to unprogrammed funds. Congress reduced the DOTR's budget from an initial proposal of P213.735 billion to P41.21 billion for 2024.