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G-WATCH TOOL FOR CITIZENS’ MONITORING OF PUBLIC WORKS PROJECTS

G-WATCH TOOL FOR CITIZENS’ MONITORING OF PUBLIC WORKS PROJECTS. Prof. Juan Mayo Ragragio Ateneo School of Government 21 September 2004 • Makati City. Why monitor DPWH?. Public works are vital public goods Big amount of contracts Corruption in agency. What to monitor in DPWH?. Delays

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G-WATCH TOOL FOR CITIZENS’ MONITORING OF PUBLIC WORKS PROJECTS

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  1. G-WATCH TOOL FOR CITIZENS’ MONITORING OF PUBLIC WORKS PROJECTS Prof. Juan Mayo Ragragio Ateneo School of Government 21 September 2004 • Makati City

  2. Why monitor DPWH? • Public works are vital public goods • Big amount of contracts • Corruption in agency

  3. What to monitor in DPWH? • Delays • Cost increases • Causes of delays and cost increases • Readily observable physical defects • Deviation from normative process

  4. Framework for Citizens’ Monitoring • Tool and method must be simple and can be applied easily by ordinary citizens • Consultation with agency regarding the monitoring activity must be part of the method

  5. Monitoring Tool

  6. Methods • Site visit • Data-gathering • Documents review and analysis • Interviews

  7. Documents to use • Progress reports and summary reports (Central Office data and field data) • Contracts • Supplemental Agreement • Variation Orders • Notice to Proceed • Notice of Award • Program of Work

  8. Phase 2: Tool improvement Phase 3: Tool maturation and preparation for localization G-Watch Phases Phase 1: Tool development and testing

  9. Phase 1 • No MOA with agency • Coverage • 4 highway projects • 1 flood control project • Ave. delay: 415 CDs/project • Ave. cost increase: P176.5M/project • Problems attributed to: • delayed fund releases from DBM • bad weather condition • financial crisis

  10. Phase 2 • MOA with agency signed • Coverage • 6 road projects • 1 flood control project • Ave. delay: 831 CDs per project • Ave. cost increase: P105.5M per project • Additional consultancy fee due to delay: P522M • Problems on right-of-way and environment clearance

  11. Phase 3 • MOA with agency signed • Coverage • 15 Locally Funded Projects (LFPs) • 11 Foreign-Assisted Projects (FAPs) • Ave. delay: 52 CDs/LFP; 287 CDs/FAP • Ave. cost increase: P241,290/LFP; P59M/FAP • Delays attributed to bad weather condition, late GOP payment, peace and order situation, RoW • Cost increases attributed to changes in work plan and work suspension

  12. HIGHLIGHTS OF PHASE 3

  13. Monitoring Objectives: • To check the progress of on-going projects and performance of completed projects • To identify problems that cause delay in project implementation • To check on variances in targets (in terms of time, cost or project specifications) • To identify other issues related to project implementation

  14. COVERAGE Criteria Projects identified in consultation with DPWH Implementing Office (Central Office, Local Offices) Project Status (Completed, On-going) Project Type (Road Construction, Flood Control, Airport Terminal, Road Maintenance) Funding Source (ADB, WB, JBIC, locally-funded) Geographical Spread (Luzon, Visayas, Mindanao) There are a total of 26 projects monitored by G-WATCH

  15. According to Region Foreign Assisted Projects Locally-funded Projects Total Cost Variance Mindanao P 354,641,354.03 (1) P54,963.3 (3) Visayas P11,954,000.00 (2) P0.00 (2) Luzon P267,380,448.37 (8) P3,564,402.03 (9) SUB-TOTAL P655,941,231.24 P3,619,365.33 Total Time Variance Mindanao 540 CD (1) 240 (3) Visayas 114 CD (2) 0 CD (2) Luzon 1990 CD (8) 457 CD (9) SUB-TOTAL 2644 CD, Ave. delay of 240 CD (8 mos) 697 CD, Ave. delay of 50 CD (1.6 mos) 11 FAPs vs. 14 Local Projects

  16. Project Name Original Implem’n Pd Revised Implem’n Pd Variance Macalelon-Mulanay Road Project, Quezon (ADB) August 30, 1999 to February 28, 2003 1279 CD October 30, 1999 to August 27, 2004 1825 CD 546 CD Tagum-Carmen Road, Davao del Norte (JBIC) January 2000 to October 18, 2002 990 CD January 2000 to April 10, 2004 1530 CD 540 CD CP 6M-2, Cataingan-Placer Road, Masbate (ADB 23 Aug 99 to 12 Aug 01 720 CD August 23, 1999 to May 29, 2002 but as of February 2004 site-visit, not yet finished due to suspension of work 1,010 CD 290 CD600 days already since the lapse of the time extension on 29 May 2002 890 CD ON-GOING PROJECTS: DELAYS OF MORE THAN 1 YEAR % ∆ in time 42.6% 54.5% 123.6%

  17. SUMMARY (Time Variance): • 18 out of 25 projects incurred delays (72% of those monitored) • 4 projects incurred delays of more than 1 year • All are Foreign-assisted • 1 Completed, 3 On-going • % Change in Time: {43% to 123%} • Total Time Variance: 3,941 CD or an average delay of 158 CD (5 months)

  18. REASONS CITED PROJECTS Bad Weather Condition (4) • Mangayang Bridge, Nueva Vizcaya • San Emilio-Quirino, Ilocos Sur • Barili-Carcar-Bato, Cebu (ADB, JBIC) • Oras-Jipapad-Concepcion, Eastern Samar Peace and Order Situation (5) • Tagum-Carmen, Davao del Norte • Junction National Road – Sitio Layug Bunga, Catanduanes • Macalelon-Mulanay, Quezon • Improvement of barangay roads, Pampanga • National Road-Sitio Layug, Catanduanes Delayed GOP payments (2) • Santiago-Saguday-Mangandigay Road, Quirino • Barili-Carcar-Bato Road, Cebu (ADB,JBIC) Contractor’s Capability (financial/ equipment/materials) (2) • Macalelon-Mulanay, Quezon (lack of equipment) • Nasugbu-Ternate (scarcity of construction materials) Time suspension due to prelim inspection @ 95% completion & repair of defective works (2) • Taft Canavid-Dolores, Eastern Samar • Gattaran-Capissayan, Cagayan Revision in Plans (4) • Tagum-Carmen, Davao del Norte • Gattaran-Capissayan, Cagayan • Gattaran-Capissayan, Cagayan • Improvement of airport terminal, Cagayan de Oro City Right of Way Problem (4) • San Emilio-Quirino, Ilocos Sur • Malicboy-Macalelon, Quezon • Macalelon-Mulanay, Quezon • Mulanay-San Narciso, Quezon CAUSE OF DELAYS

  19. Project Name Original Cost Revised Cost Variance Construction/ improvement of subprojects, Nueva Ecija P565,174,321.41 P730,574,485.83 Tagum-Carmen, Davao del Norte (JBIC) P385,042,573.16 P739,683,927.19 (2x revised) TOP 2 PROJECT COST INCREASESIN PERCENTAGE P165,400,164.42 29% P354,641,354.03 92%

  20. SUMMARY (Cost Variance) • 14 out of 25 projects increased project cost (56% of those monitored) • 2 projects increased cost by more than 25% • All are Foreign-assisted • 1 Completed, 1 On-going • Total Cost Variance: P659,560,596.57 or an average increase of P26,382,423.86

  21. REASONS CITED PROJECTS Change in Work (additional work, extra work) (5) • Tagum-Carmen, Davao del Norte • Improvement of subprojects in Nueva Ecija • Gattaran-Capissayan, Cagayan • Santiago-Lidlida, Quirino • Improvement of airport terminal, Cagayan de Oro City Quantity changes in contract items and/or new item of work (2) • Taft-Canavid, Eastern Samar • Improvement of subprojects in Nueva Ecija Time suspension due to prelim inspection @ 95% completion and repair of defective works (2) • Taft Canavid, Eastern Samar • Gattaran-Capissayan, Cagayan CAUSE OF COST INCREASES

  22. SUB-CONTRACTING Macalelon-Mulanay Road, Quezon, ADB BID IRREGULARITY Babak-Samal-Kaputian National Road MULTIPLE CONTRACTS Bislig Bridge, Surigao del Sur MISCOMPUTATIONS Some Local projects OTHER RELEVANT ISSUES DPWH Responses (August 11) • Allowed sub-contracting: to verify amount/percentage sub-contracted if within limit • To be verified by CO • Splitting or Multi-release contract… to be verified by CO • Due to manual computations thus subject to human error

  23. A CASE OF SUB-CONTRACTING:Macalelon-Mulanay, Quezon • Reported case of sub-contracting: • Subcontracted by E. Ramos Construction to Wee Eng Construction – km 247+700 to 265+700 • 41% (18 km) of road project’s net length, 43.54 km • Amount: P170,800,000.00 or 18% of contract price Subcontract agreement: XXX shall be subject to increase or decrease by the CONTRACTOR depending on its assessment of actual work done • D.O. 4 and 70 s.2004: • prior written consent of the approving authority • not > 50% of value of project

  24. PROJECT NAME/ SCOPE/ FUND SOURCE PROJECT DATA (Physical Target) PLANNED ACTUAL a)Bid Date b)Bid Type c)ABC d)NTP e)Nag. Date a)Const. Budget b)Compl. Budget c)Start Date d)Expiry Date e)Duration a)Prg This Year b)Prg Next Year c)Start Date d)Expiry Date e)Duration 1101-02-010-3 Const. Of Babak-Peñaplata-Kaputian Section GRAVEL TO PAVED VILP CY 2002 a)28 Mar 2003 b) Public c)9249.33779 d)09 June 2003 e) a)10,000.0 b) c)25 Apr 2003 d) e) • 10,000.0 • 25 Apr 2003 • 20 Dec 2003 • 289 A CASE OF BID IRREGULARITY: Babak-Samal-Kaputian National Road • Actual Start before Notice to Proceed Important Dates: • Bid Date: March 28, 2003 • Notice of Award: April 9, 2003 • Project Start: April 25, 2003 • Notice to Proceed: June 9, 2003 • Notice of Award closely scheduled with Bid Opening…

  25. Bislig Bridge WHEN WILL WE SEE THE BRIDGE ? 99.99% accomplished 1998: P 31,116,039.51 All refer to exactly the same contract information 96.16% accomplished 1999: P 12,158,707.57 92.51% accomplished 2000: P 22,917,091.79 Actual Project Start: July 13, 2000 60.32% accomplished 2002 (SA1): P 28,741,362.44 As of Feb 2004, researcher noted local district officials’ observation that the project is not even 25% complete in physical appearance. They estimated that it may take another 5 years to complete. Original Project Cost Increased byP63,817,161.8 P94,933,201.31

  26. Project Name Original Implem’n Pd Revised Implem’n Pd Variance Bislig Bridge, Surigao del Sur (Local) July 13, 2000 to August 26, 2002 775 CD (1998, with budget already) July 13, 2000 to April 16, 2004 1279 CD 504 CD (+730…1234 CD) Project Name Original Cost Revised Cost Variance Bislig Bridge, Surigao del Sur (local) P31,116,039.51 (1998) P94,933,201.31 (3 additional budgets, 1999-2001) Bislig Bridge (Time & Cost Variances) Time Variance % ∆ in time = 159.2% Cost Variance P63,817,161.8 205%

  27. Estimated Cost of Project Works11 7,747,974.73 • Estimated Cost • Direct Cost • Mobilization/ Demobilization • Materials • Supplies and Delivery • Testing of Matierials • Labor (including fringe benefits) • Equipment Expenses • Pre-Engineering • Indirect Cost • Overhead, Contingency, Miscellaneous (7% to 12% of A1 to A4) • Profit (5% to 12% of A1 to A4) • Comprehensive All Risk Insurance (1.5% of A1 to A4) • VAT (10% of A3 to A4) 77,479.75 6,533,487.24 100,262.49 1,114,225.00 200,000.00 598,805.87 704,290.90 121,448.75 Sub-Total (Contract Cost) 9,450,000.00 • Estimated Government Expenditures • Engineering and Administrative Overhead (3% of A1 to A4) • ROW/ Site Acquisition • Materials to be furnished by the Government • Preliminary Engineering 350,000.00 200,000.00 CASES OF MISCOMPUTATIONS Program of Work: Babak-Samal-Kaputian ∑ A1 to A4 = 7,825,454.48 3% of ∑ (A1 to A4) = 234,763.63 Variance: 350,000 - 234,763.63 = 115,236.37

  28. Major Questions • Why do the same findings occur yearly? • Why are they not addressed and corrected immediately?

  29. Learnings • Non-technical monitoring by citizens can be done and can pressure both government and constructor to improve work quality • Non-adversarial engagement with agency bears results Thank you!

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