CPA weighs new policy for design annd construction

The board of directors of the Commonwealth Ports Authority is seriously looking at adopting a new policy which would separate the architectural and engineering design work with construction management contract to provide check and balance in various projects.

According to CPA board finance committee chairman Roman Tudela, the proposed scheme of providing two separate contracts for construction management and architectural and engineering design will only apply to projects worth over $1 million.

During the recent board meeting, CPA director Fidel Manglona noted that giving the two jobs to one company can lead to financial abuse due to constant change orders.

Manglona was specifically referring to the dredging work in Rota Harbor which led to numerous change orders amounting to $741,000. He said such huge expense could have been avoided had the construction management firm made sure that the interest of the ports authority was protected.

This developed as the finance committee is still looking at revising the budget for fiscal year 2000 to make sure that the ports authority does not only have the money to finance its operation but also have enough funds to pay for its debt.

Tudela wants the proposed $9.5 million budget for FY 2000 revised to reflect the current cost-cutting measures, impact of raise in fees and incentives offered by the ports authority.

Under the FY 2000 appropriation, airport operating budget will be $8.5 million while the seaport will be $1 million.

Debt payment is still the biggest problem of the ports authority as Asia’s financial crisis has led to the drastic decline of the airport revenue. As a result, management is keeping a tight watch over its expenditures for the remaining six months of 1999 to make sure that it is maintaining the smooth operations of its facilities.

Interest on the $20 million airport bonds alone is payable semi-annually at 6.25 percent. For 1999, the ports authority would have to pay $1,245,625 in monthly interest alone at this time when revenues are on a decline.

The ports authority has implemented various cost-cutting measures since last year but the biggest decision management ever made was to carry out a reduction in the working hours instead of laying off personnel.