The Commission on Audit (CoA) has flagged the Metropolitan Manila Development Authority (MMDA) for failing to recover nearly P30 million in advance payments to contractors responsible for seven infrastructure projects that were either terminated or abandoned.
The 2024 audit report, released in December, showed that of the total P29,585,205.17 in unrecouped payments, more than P10.5 million has been outstanding since 2003, or more than two decades.
The amount pertains to the mobilization fee paid by the MMDA to a contractor for the development of the North Transport Terminal A component of the Greater Manila Area in September 2003.
Although the project was never implemented following a cease-and-desist order issued by a Quezon City Regional Trial Court, the advance payment was not recovered by the MMDA even after 21 years, contrary to Article 1144 of the Civil Code of the Philippines.
The provision sets 10 years within which a government institution may take legal action for obligations arising from contracts, including the recovery of unrecouped advances.
Due to the prolonged delay, state auditors warned that the government risks losing the amount as it has already exceeded the prescribed period.
“If no legal action is filed against the contractors, the government will eventually lose related resources,” the CoA said.
“Delays in addressing these matters could also lead to administrative concerns, highlighting the importance of continued oversight and adherence to existing policies,” it added.
Similarly, two projects involving structural works for the development and relocation survey of Commonwealth Avenue in Quezon City, amounting to P184,483.28 and P39,000, respectively, have remained outstanding since 2006.
Although the MMDA assured it would demand refunds from the contractors, the advance payments remained unrecouped as of 2024.
Audit findings showed that the largest share of unrecovered funds, totaling more than P14.5 million, was related to the upgrading of the traffic signal system. The total contract cost was P390.4 million, but the project was terminated in 2020.
The MMDA filed breach-of-contract charges against the contractor in 2024, although the funds remained unrecovered as of year-end.
For the bikeway development of the Pasig River Ferry Service, P2.6 million was transferred by the MMDA as an advance payment in 2019.
The project was terminated in December 2021 after the contractor incurred a 371-day delay and a negative slippage of 254.06 percent.
Also terminated was the design and installation of a lighting system at Ninoy Aquino International Airport Terminal 3 in Pasay City.
The contractor was paid P855,579.95 as an advance, but the MMDA has yet to recover the amount four years after termination, which followed the demolition of the Layag Islas Monument in connection with expressway construction at the site.
The supply and installation of cat’s eye markers along a private lane on EDSA, with an advance payment of P670,689.93 made in 2010, likewise remained unrecovered as of 2023.
“[The MMDA] was unable to either demand from the contractors the immediate refund of the unrecouped advances or forfeit the performance or surety bonds posted by the contractors concerned upon default or termination of the contracts,” the CoA said.
“In view thereof, the contractors had taken advantage of the interest-free use of the funds or advances for purposes other than the contracted works pending resolution of the problems or issues,” the audit report added.