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Senate should also probe UK bridge supplier

/ 09:38 PM October 09, 2012

The Senate is currently investigating the suppliers of the purported “overpriced” steel bridges of the President’s Bridge Program (PBP) as exposed by Sen. Serge Osmeña III. While the senators are at it, why not include in their investigation the builders of 91 bridges under the Special Bridges Program (SBP) of the Department of Public Works and Highways? Sen. Aquilino “Koko” Pimentel III had urged that Balfour Beatty UK (BBUK) be included in the investigation along with other foreign companies involved in the PBP.

Why BBUK? Because its bridges have incurred a gargantuan cost overrun of 96 percent by the end of 2011, raising the original cost of P2.48 billion by another P2.392 billion!

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With this huge overrun, BBUK bridges effectively cost taxpayers an average of P835,000 per lineal meter. At that cost, the bridges may be overlaid with gold.

Originally, BBUK’s cost per lineal meter, based on DPWH documents, was only P426,000 in 2007. This figure is already higher than the cost per lineal meter of another company since the price ranged from P217,000 to P269,500 for bridges built from 2005 to 2006.

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In 2008, when costs of steel and other materials rose, the cost per lineal meter of the same company was only P417,190 and up to P554,190 for the more sophisticated and technologically advanced “Delta” bridges.

Apart from the very high cost, BBUK managed to build only 242 bridges out of the 256 that it was contracted to complete.

For such a huge cost, BBUK bridges should be sturdy. Yet the Pasil Bridge that it built in Tabuk, Kalinga, collapsed during construction.

If this is not enough, BBUK’s checkered past in many countries should have alerted the Aquino administration. Yet, the Palace is unfazed and Osmeña is not that ready to probe a company said to be very close to his heart.

BBUK was also accused of bribery while working on a dam project in Lesotho and was held liable for a railway crash in Hatfield, England, even as seven of its workers also died while constructing the UK-France undersea tunnel across the English Channel.

The Federal Bureau of Investigation also raided the offices of Balfour in the United States in search of evidence for its massive reimbursement requests related to illegal overpricing on an Amtrak project.

With all these cases, it is eerie for the Aquino administration to allow BBUK to snatch a multibillion-peso SBP contract. If the company were doing business in countries that are strict on contracts, it would not have been simply blacklisted; it would have been kicked out.

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If BBUK were truly transparent and fair, why did it change its name three times, from Balfour Beatty to Balfour Cleveland to Cleveland Bridge?

The Senate should look into the fact that the Aquino administration has signed a deal with BBUK to build 91 bridges at a cost of P3.186 billion for a total of only 3,765 lineal meters, or about P845,215 per lineal meter. Isn’t this enormous for a penny-pinching administration?

BBUK has escaped public notice and official attention for the last 10 years, and we owe Senator Pimentel for insisting that the British company should also be investigated.

Pimentel would be amazed at how BBUK had snapped up contracts in spite of the huge costs of its bridges. The 96-percent cost overruns should not be a laughing matter to the thrifty Aquino administration.

Osmeña has been training his guns on a business rival of BBUK when he should be more concerned with the financial irregularities that characterize BBUK’s projects, including a strange provision for a 10-percent increase to protect its profits in case of changes in implementation.

Thus, he wants the builder of 1,500 bridges under the PBP from the time of President Fidel Ramos to President Gloria Macapagal-Arroyo to answer allegations that it has overpriced these projects and enriched itself at the expense of the Filipino people.

However, evidence is not on Osmeña’s side. The Commission on Audit has cleared the accused company of irregularities, and the DPWH agreed that nothing anomalous had happened, with all the projects not incurring cost overruns. Osmeña should also accept the incontrovertible fact that the supplier delivered 75 bridges in excess of the agreed target.

If allegations of anomalies and cost overruns against the company are without merit, then Osmeña should look deeper into the SBP and why it was allowed to snap up 91 new bridge projects in spite of its sorry record and its expensive costs.

The PBP has strict rules and most of its projects have been financed through Overseas Development Assistance funds, with foreign suppliers with good bridge technology competing for contracts.

At the peak of its work, PBP was building between three and four bridges per day using the fast deploying modular steel bridge technology of UK supplier Mabey & Johnson (M&J).

The company provided the best cost and the best technology product for the PBP. Its bridges are modular steel units that are assembled on site in a matter of days. Other steel bridge suppliers have not been able to match this. Old-style concrete bridges take years to build.

The steel technology that M&J developed for its bridges have passed the stringent tests of the North Atlantic Treaty Organization or Nato.

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