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PCC probes alleged rigging of Kaliwa Dam project bidding

/ 05:12 AM August 26, 2019

The country’s antitrust body is looking into the alleged rigging of a bidding for a big-ticket China-funded project under the Duterte administration’s “Build, Build, Build” initiative.

The project is the P18.7-billion Kaliwa Dam Project in Quezon province, a top official of the Philippine Competition Commission (PCC) told the Inquirer.

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This developed after a document issued by the Commission on Audit (COA) to the Metropolitan Waterworks and Sewerage System claimed the bidding for the project and the awarding of the contract were questionable. It was a “negotiated contract,” it claimed.

A Chinese state-owned company won the bidding held in December last year, besting two other Chinese contractors who were disqualified for failing to comply with the requirements, which COA claimed seemed intentional.

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“The PCC will confer with the COA and obtain more detailed information about its findings on the conduct of the bidding for the Kaliwa Dam project,” PCC Chair Arsenio Balisacan said.

Under the competition law, the PCC could go after entities accused of anticompetitive behavior, such as rigging of a bidding.

According to the MWSS, the New Centennial Water Source-Kaliwa Dam Project has been planned since 1967 to provide another major water source for Metro Manila.

The detailed engineering, design, and construction of the project was awarded to China Energy Engineering Corp. under the Duterte administration.

According to COA’s audit observation memorandum, there were two other bidders—the consortium of Guangdong Foreign Construction Co. Ltd. and Guangdong Yuantian Engineering Co., and Power Construction Corp. of China Ltd.

The memorandum, dated June 10, said the consortium failed eligibility and technical requirements. COA noted the consortium did not have a business permit and a license from the Philippine Contractors Accreditation Board, despite claims that it had conducted or completed projects in the Philippines before.

Power Construction Corp., on the other hand, got disqualified after giving a financial bid of P13 billion, which was 6.91 percent higher than the approved budget for the contract.

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This, the COA said, was despite the fact that the bidders were already informed beforehand that a bid in excess of the approved budget “shall be automatically rejected.”

“In summary, it can be deduced that the two bidders/contractors were included merely to comply with the ‘at least three bidders’ requirement as stated under the Procurement law,” the document read.

The PCC has a memorandum of agreement with COA which, Balisacan said, provided for the sharing of information between the two agencies.

“Under the Philippine Competition Act, bid-rigging occurs when competitors manipulate the outcome of bids, leading to higher costs passed on to consumers and taxpayers. This conduct is punishable both criminally and administratively,” he added.

Whether this case will merit a full blown PCC investigation remains to be seen. But this brings increased scrutiny to the Chinese-funded project.

The competition law offers a leniency program, which offers either immunity from suit or reduction of fines based on certain conditions. Under the law, an administrative penalty could be slapped with a fine of up to P250 million.

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