COA wants contractor penalized for unfinished housing project in Caloocan
MANILA, Philippines – State auditors have advised the Social Housing Finance Corporation (SHFC) to take action to impose sanctions on a contractor who has yet to complete a 352,304 high-density housing project million pesos to Caloocan City despite a two-year extension.
The Audit Commission said that the inability of the contractor to complete the housing project “deprived the 720 intended beneficiary members of the immediate use of decent housing units”.
The CA did not name the contractor in the report.
In a 2020 audit report on the SHFC, the audit team also advised the agency to terminate or cancel the agreement due to the fault or negligence of the contractor.
“A community association’s high density housing (HDH) project costing 352.304 million pesos was not completed by its scheduled completion date despite two approved extension periods or a total of two years , contrary to the provisions of the construction of the building and the site Development Agreement and HDH Company Circular No. 14-002, series of 2014, ”said the COA.
This ended up “depriving the 720 envisaged informal settler families – beneficiaries of the immediate use of decent housing, which resulted in the non-achievement of the HDH program objectives and the risk of non-recovery of the investments of the community. SHFC in housing projects. ”
The HDH project is located in Camarin, Caloocan Town, and is designed as a close-to-town relocation for 720 informal settler families from the barangays of Quezon City and Caloocan City, near the Tullahan River and its surrounding areas. tributaries.
The community association obtained a loan of 352.304 million pesos from the SHFC under the HDH program for the lot, site development and construction of houses.
Attached to the Department of Human Settlements and Urban Development, the SHFC administers the community mortgage program and the Abot-Kaya Pabahay Fund program, which are respectively depreciation support and development finance programs.
The HDH project started in May 2017 and was due to be completed in October 2018, one year after the contractor received the mobilization fee of 68.55 million pesos in October 2017.
But as of October 2018, the project was not yet finished, prompting the contractor to request an extension of the construction period.
For reasons such as heavy monsoon rains and typhoons and other construction delays, the community association approved the extension until December 2019.
Another inspection after the first extension showed that the project was only 28.61% complete, requiring a second extension of the community association until October 2020.
An inspection conducted in October 2020 by the HDH team and the engineering department found that despite a two-year extension, the project was only 62.43% complete. As of March 30, 2021, the project was 75.08% complete.
The COA also learned that the contractor’s request for an extension which lasted two years and two months had not been approved by the board of directors of the SHFC. The contractor reportedly made another request for an extension for another year.
In addition, the total amount released to the contractor reached 160.492 million pesos, or 62.43 percent of the cost of the project.
The COA recommended that the SHFC require the community association to “impose liquidated damages against the contractor for each day of delay, and initiate termination or cancellation of the agreement due to the fault. or the negligence of the contractor ”.
The audit team also advised the agency to require the Department of Engineering to perform due diligence on future projects and ensure that the contractor has the financial and management capacity, to the organizational structure, technical expertise, delivery capacity and experience necessary to complete the projects.
The SHFC was also urged to “require the Department of Engineering to strictly monitor and validate construction projects undertaken by the community association.”
In response, the crown corporation agreed to coordinate with the community association to impose damages on the contractor.
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