Corruption in P9.6-B Pasig City Hall deal alleged

Corruption in P9.6-B Pasig City Hall deal alleged | Daily Tribune

A local contractor has exposed alleged irregularities in the P9.6-billion Pasig City Hall construction project, questioning its bidding process, cost estimates, and the involvement of foreign firm MTD Philippines Inc.

Selwyn Lao, a structural engineer and construction firm owner in Pasig, criticized the process starting from the unsolicited proposal submitted by MTD Philippines — who not only proposed the project but eventually won the contract.

“From the unsolicited proposal alone, there were already red flags. The same company that made the proposal ended up winning the bid. That’s an anomaly right there,” Lao told DAILY TRIBUNE in a weekend interview.

Lao stressed that other contractors would have needed at least six months to study the proposal and prepare a competitive bid. However, bidders were allegedly given only 45 days.

“If you only give contractors 45 days, what does that mean? You’ve already favored MTD. The one who designed the project and recommended the plan ended up being the contractor,” he said.

Lao also raised legal and financial concerns, stating that MTD Philippines does not hold a Philippine Contractors Accreditation Board (PCAB) license and has no record of withholding tax filings with the Bureau of Internal Revenue (BIR).

“They can’t even present a valid PCAB license. And if they declare withholding taxes, did they submit the necessary documents to the BIR? If not, then it’s over — not just for MTD, but for Mayor Vico Sotto as well,” Lao said.

He also questioned the staggering P855 million cost for the preliminary and detailed engineering design, saying that under Philippine standards, it should only cost around P50 million.

“How did it balloon to P855 million? Where did they base that amount on?” he asked.

Lao, with decades of experience in construction, said he could estimate a building cost within two hours. He noted that even a five-star hotel in the Philippines would only cost around P75,000 to P85,000 per square meter, far below the P220,000 per square meter quoted for the city hall.

“What kind of materials are they using — gold?” he said sarcastically. “For reference, the most expensive Italian marble can cost P12,000 to P15,000 per square meter, and that’s already luxury-level.”

He also pointed out that a Japanese firm could provide a complete detailed engineering design for only around $10 million or P500 million — far less than the P865 million quoted for the Pasig project.

“The consultancy alone already costs P865 million — and that’s before any actual work begins. Since MTD gave the unsolicited proposal and also won the contract, there’s clearly something wrong here,” he said.

Lao argued that the local government should have conducted its own feasibility studies rather than relying on a foreign firm.

“Where did the mayor’s office get the P9.6 billion figure for the city hall? Shouldn’t that be based on internal studies? But it turns out the study came from MTD, a foreign company,” he said.

He added that a proper Swiss Challenge should have been implemented — allowing other companies to offer lower bids for the same project.

“If MTD proposed P9.6 billion, any company offering P8 billion should have automatically won, or MTD should’ve been forced to match the lower price,” he said. “But Mayor Vico Sotto and City Administrator Jeronimo Manzanero disguised this as a bidding process, using MTD’s numbers and giving other contractors only 45 days. That’s what you call rigging the game.”

Lao claimed that had he been allowed to participate, he could have completed the project for only P5 billion.

“I would’ve offered P5 billion for this. MTD would have had no choice but to match that. But since they didn’t allow it, this clearly smells of corruption. I’m telling you, I’m ready to go head-to-head with Vico Sotto on this,” he said.

Another local contractor, Curlee Discaya, president of St. Gerrard Construction and head of a charitable foundation, echoed Lao’s concerns.

In an open letter, Discaya said the estimated cost of P209,197 per square meter for the 46,000-square-meter complex is excessive and urged Mayor Sotto to slash the project cost by two-thirds.

“The funding could be better used for the urgent needs of Pasigueños — like health care, education and livelihood assistance,” Discaya wrote. “Even one-third of the P9.6 billion is more than enough to complete a modern and impressive city hall.”

“Everyone who builds large buildings, whether architects or engineers, knows that the cost of construction does not exceed P70,000 per square meter even if the materials are of high quality and luxurious,” he added.

Earlier, Sotto said that the computations of costing per square meter are both “inaccurate and misleading.”

“This is not surprising considering that your source was a party with a clear conflict of interest. It seems that the allegations in their press release were not fact-checked,” he said.

The mayor also explained that as a project under the “design and build” modality of procurement, the detailed cost estimates for the new Pasig City Hall is currently being finalized before the contract signing.