World Bank’s intervention in what ought to be obligation and duty of Philippine government stirred the nation lately. WB blacklisted some contractors engaged by Department of Public Works and Hi-ways [DPWH] for road projects that WB is funding.
I’ve been a civil construction worker. Project costs estimate is an exact science and not guesswork. Let’s take a simple house for example. In structural work, the total volume of concrete – cement, sand and gravel, can be approximated; likewise, the volume of all the steels needed for reinforcement. In electrical, there would be the quantities of wires, switches, circuit outlets, lighting units, breakers and panels, etc. And then there are the aspects of Plumbing and what more else provided with plans and details. With the lists of material completed, figures in money can be supplied in easy. Items like labor, consumables, rentals, insurance, social security, documentations, depreciation of equipments, profit, taxes, etc. are added to complete the total estimate.
There are other tested methods employed, shortcuts in costs’ estimation. But normally, they all come up to more or less the same. Now we can take the biggest and tallest building instead of the simple house – from ground, basement, up to tower… or, let’s take a stretch of road to be constructed. Nobody just can snatch figures from nowhere! [Except a crook in cohort with another crook like I once knew.]
It is elementary for a contractor to know how much it will cost, especially the bottom line of a project, before it will negotiate. It is also assumed that the owner or developer has its own Costs estimate as they are usually the origin of the approved plans where contractors base their independent estimates. Otherwise, project owners do not know if they are paying right and not being robbed. They needed an estimate before they have even decided to look for a contractor.
In this case, it would be stupid to think that World Bank does not have its own people engaged in cost management, scrutinizing the same plans that all the parties are furnished. Thus it does not take intrigue or proof for them to determine that something is smelly, out of norms, or that needed a deeper look. That a contract for a certain road project in Basay, Negros, for example, is ridiculous!
Estimates of some items may be based on percentage, cost-on-material. Labor could be at minimum 40%, for example. Then, a 30% profit on top of everything could be considered high in this part of the world. Sometimes the winning bidder will arranged with sub-contractors, sharing his profit with them. General contractor in that situation opts for less but sure profit free of any possible overrun, and free of sweat. For sub-contractors, profit can sometimes be squeezed out of some items. You don’t want to know them.
But a 300% profit, or a 65% value-added on what possibly is a lucrative proposal, for example, would be absurd and a big cause for alarm especially when we are talking here of hundreds of millions and billions of pesos. Such is highly improbable where fair, free, healthy competition is in place wherein bidders would be trying to out-edge and out-bid everyone else. No, there is no law governing profit. There is only freedom of competition to follow. Something that cost a centavo that sold for a peso would be great! But a centavo that is fraudulent is a one-centavo-fraud that is a fraud.
World Bank, by its act of blacklisting the contractors, is in effect saying that there is monopoly and cartel involving Philippine Public works. In that case, then the situation can be complicated than we think. 1. The contractors have agreed to play by orchestration. 2. For reward, they get guaranteed employment in a project to be assigned or shared by all of them. 3. They get what is due them for their share of work, perhaps better than if there will be free, tough competition. 4. They might not have robbed Juan dela Cruz but they are party to conspiracy by playing exactly as directed. 5. The contractors are just one side to it. We have masterminds to hunt, or does WB already know them? Just a theory?
There Is No Fail Safe Measure against Corruption
An independent permanent assessment and technical audit that strengthens transparency of the bidding process.
Enhanced processes for procurement, financial management, internal controls, and audit of the road management agencies.
Inclusion of a new and innovative coalition of citizen and road users group, called “Road Watch” in the project management setup.
I think bullets one and two, in principles, are nothing new. They are in places everywhere. Perhaps they are matters that need renewed or more focus, or needed to be strengthened. Sometimes a crook can penetrate a system. In that case owner-developer then sees right when it should be seeing wrong in his contract. His system is corrupted and rendered futile by virus!
Bullet three I think is something new. [In fact this is the manner by which World Bank intervened, something I don’t remember it did before.] It calls for formation of a watch group to watch the watch group, forming a second line of defense against crooks. The remedies must be in a manner and makeup so that it will be hard by crooks to hack thus disabling the system. And, it should be free of partisan politics or else it will be another futile thing itself.
It is obvious that the Senate probe of the World Bank blacklisted contractors will have little legislative value, because it has been overtaken by events. Pres. Arroyo has already ordered the Department of Trade and Industry to investigate the subject. The Ombudsman is already conducting preliminary investigation of the criminal cases, and she is scheduled to release the results in February.//excerpt, Senator Miriam D. Santiago, The Contractors, 26 January 09 archives
Now you see them, then you don’t. This is the Philippines. There is no effective measure against graft and corruption really in place or seriously tried yet. The issues involving Public work contracts are not new as far as I can remember which would be since the time of President Marcos. Filipinos simply became tired of them. Nothing usually came out of them, and there seemed nothing could be done about the problem. Or, maybe you have not heard about the corrupt being hard to persecute because of corruption. Abangan na lang natin.
I grew up in a town where our house used to be at the gate of District engineering, Ministry of Public Works, or DPWH today. We had a canteen where everybody used to hang out. The place used to be a sort of a second office to some. A majong den by some of them lazy bureaucrats, sometimes. I’m familiar with them from managers, equipment operators, to ordinary laborers and local contractors. Yeah, [local] corruption down the grass roots that everybody is talking about was there like they’re nothing! [Even the night watchmen were not outdone!]
Graft and corruption could be from the top [bureaucracy] or it could be from below [the contractors]. It could be anywhere of the system. It could be the janitor generating it all and acting as go-between, which explains his life style was at par with the managers. Which also explains why sacking the manager or the contractor did not work! Sure, there were always good people around. I guess they shut their mouths most of the time if you call that good! But we are talking there about bread crumbs at some lower level.
Talk with people long enough in the construction world. Public works is no place for a contractor who has no guts for corruption of any form. That’s been the playing field ever since. It could also be suicide for a whistle blower. They will tell you that.
Corruption does not always involve cash payola, by the way. A “damaged culture” as one foreign observer once summarized the nation that drew indignation from Filipinos like the chap Chip Chow now is reaping. [Mr. Chip is wrong for being not factual. The Philippines is not a nation of servants as he said. Factual is, The Philippines is a nation that is the top exporter of servants!]
Corruption as one “normal” way of life is not acceptable to the Filipino people. They have seen other nations that have managed theirs at very low level. And I think Philippine government must shape up while it has time.
Moral Renewal for Filipinos
There have come out louder calls for moral renewal or moral uplifting for Filipinos lately. I absolutely agree with that! Filipinos appear to be at the mercy of corruption. We seem to be in a situation wherein change can only come from the corrupt or corrupted themselves by their own free will!
With the election fever on the rise, we have heard names like Among Ed [Father Ed Panlilio], Bro Mike Villarde, Bro Ed Villanueva – heavyweights in religion, being pushed forward for President this 2010. Any of them to bring end to corruption? I think we can send all the Saints after them but I doubt very much if it will work. There are no devils to exorcise in the first place. There are only crooks to send to jail or better still – hang for all to see. Maybe then, and only then, will everybody make that change within them.
But, execution of heinous criminals is not the way of the religious as we know. In fact it was the Church that had influenced the abolition of death penalty in the country. Bro Ed Villanueva, claiming seven million followers, lost Presidential election in 2004. I guess he had failed to explain to three quarters of his flock how exactly he could make this nation great again, something many Filipinos could not quite imagine of him. But who knows if he won… or if they will win.
Well, since there was mention about virus and viral infestastion Take no action, Repair, Move to chest, Delete file… System restore… they are all the options. Sometimes infection is serious that Security center and Virus protection, to include System restore were disabled. That would leave no option. No more option except one recourse… Reformat of the system. And that’s a fact. Which of the situations, or which way now, folks?