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CPA cautious with fund use
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Posted on Mar 05 1999
Due to shrinking revenue, the Commonwealth Ports Authority board will adopt a strict policy in carrying out Capital Improvement Projects by ensuring that a company hired to carry out the architectural and engineering design will not be allowed to handle the construction management job.
“This will provide check and balance, in case there is a mistake in the engineering design,” said Roman Tudela, CPA board finance committee chairman.
During a recent board meeting, board director Fidel Manglona vehemently protested the additional payment of an additional $17,000 for the hauling of Rota Harbor dredged materials. He said the Rota project which originally cost $220,000 has shot up to $700,000 due to several change orders.
Rex Palacios, financial consultant, said the board should partly take the blame for the increases in cost of infrastructure projects because members have not really taken time to get involved in the architectural and engineering design.
For example, Palacios noted that an architectural and engineering design in one project undergoes changes at least four to five times as CPA management try reconcile the project’s concept.
The ports authority has suspended the implementation of some infrastructure projects due to lack of funds as management struggle with the financial difficulties besetting the agency.
When it carried out a $53 million bond flotation in March 1998, the ports authority used the money to complete various projects that were suspended due to the plunge in revenue brought about by Asia’s financial crisis.
In a move to raise more revenue, the CPA board had approved the increase in fuel flowage fee, and use of incinerator as well as seek the immediate return of some 58,000 sq.m. of public land to the ports authority.
According to executive director Carlos H. Salas, this will provide additional revenue amounting to $1.2 million for one year which will be used to save its operation and pay for its financial obligation.
At the same, the ports authority has been encouraging employees who are due to retire to avail of the retirement program to reduce further expenditures in wages and salaries.
