The Commission on Audit (COA) has questioned the P65-billion contract covering the Cavite extension project for the LRT-1, saying it cannot complete is review due to lacking documents.
In a 2017 audit report on the Light Rail Transit Authority (LRTA), government auditors said it cannot complete its auditorial, legal, and technical review of the concession agreement due to the absence of documents such as the invitation to bid, the instruction to bidders, and project costs.
The COA explained that it was the LRTA's responsibility to complete the project's documentation to "ensure project history and continuity since staff turnover and change of administration is inevitable."
The LRTA is in charge of the LRT-2 which runs from Santolan in Pasig City to C.M. Recto Avenue in Manila.
It used to manage the Line 1 system which runs from Baclaran in Parañaque City to Roosevelt, Quezon City but management and operations of the line was transferred to private firm Light Rail Manila Corp through a P65-billion concession agreement dated October 2, 2014.
The COA noted that the LRTA has informed them that the required documents were with the Department of Transportation but these have yet to be submitted.
“While they informed us that they have requested the DOTr to submit the documents, there was no submission as of to date,” the COA said.
STATE AUDITORS CITE UNCOLLECTED AD SPACE, COMMERCIAL STALL FEES
The COA also flagged lease contracts under the current LRTA, headed by Administrator Reynaldo Berroya, which include deficiencies in rental payments and security deposits, expired contracts, questionable period and rate of the lease as well as the non-submission of documentary requirements.
State auditors found out that a total amount of P6.734 million needs to be collected as rental payment from various companies.
These include U’re Adportal Solutions, Prime Recall Advertising and Services, Trackmate Business Solutions Inc, Araneta Center Inc, and JV Pinoy Business and Ventures Inc.
The bulk of the collections would come from Trackmate which only paid P600,000 for train display monitors for four months when they should have paid P6 million, a deficiency of P5.4 million.
Araneta Center, meanwhile, only paid P1.158 million for 14 commercial stalls at the Cubao Station when it should have paid P2.314 million, or a deficiency of P1.156 million.
Discrepancies in security deposits were also noted as a total P5.3 million should have been collected from various companies.
Among firms with deficient security deposits are Ad Finity Media Marketing Corp, which owes LRTA P2.85 million for use of outdoor structural spaces; Araneta Center Inc, which owes P463,050; and Joymart and Isetann which has to pay P399,420.
The COA also noted anomalies in contracts like expired ones and computations that were not submitted.
It recommended that the LRTA collect the correct amount of rentals and get better terms on rental rates.
It also suggested that the LRTA require the payment of security deposits, comply with rules on the reasonability of contract terms, adjust disadvantageous rental rates and require the submission of documents from the concerned lessees.
Government auditors noted that the LRTA Business Development Division (BDD) committed to the submission of the contracts and other supporting documents and that the practice of month-to-month renewal was already discontinued.
The LRTA also said its BBD is currently conducting research on prevailing rental rates but they also justified their long-term contracts.
But the COA noted that the LRTA said it would conduct a study and “will aim” to comply with the recommendations on adherence to government guidelines.
In a 2017 audit report on the Light Rail Transit Authority (LRTA), government auditors said it cannot complete its auditorial, legal, and technical review of the concession agreement due to the absence of documents such as the invitation to bid, the instruction to bidders, and project costs.
The COA explained that it was the LRTA's responsibility to complete the project's documentation to "ensure project history and continuity since staff turnover and change of administration is inevitable."
The LRTA is in charge of the LRT-2 which runs from Santolan in Pasig City to C.M. Recto Avenue in Manila.
It used to manage the Line 1 system which runs from Baclaran in Parañaque City to Roosevelt, Quezon City but management and operations of the line was transferred to private firm Light Rail Manila Corp through a P65-billion concession agreement dated October 2, 2014.
The COA noted that the LRTA has informed them that the required documents were with the Department of Transportation but these have yet to be submitted.
“While they informed us that they have requested the DOTr to submit the documents, there was no submission as of to date,” the COA said.
STATE AUDITORS CITE UNCOLLECTED AD SPACE, COMMERCIAL STALL FEES
The COA also flagged lease contracts under the current LRTA, headed by Administrator Reynaldo Berroya, which include deficiencies in rental payments and security deposits, expired contracts, questionable period and rate of the lease as well as the non-submission of documentary requirements.
State auditors found out that a total amount of P6.734 million needs to be collected as rental payment from various companies.
These include U’re Adportal Solutions, Prime Recall Advertising and Services, Trackmate Business Solutions Inc, Araneta Center Inc, and JV Pinoy Business and Ventures Inc.
The bulk of the collections would come from Trackmate which only paid P600,000 for train display monitors for four months when they should have paid P6 million, a deficiency of P5.4 million.
Araneta Center, meanwhile, only paid P1.158 million for 14 commercial stalls at the Cubao Station when it should have paid P2.314 million, or a deficiency of P1.156 million.
Discrepancies in security deposits were also noted as a total P5.3 million should have been collected from various companies.
Among firms with deficient security deposits are Ad Finity Media Marketing Corp, which owes LRTA P2.85 million for use of outdoor structural spaces; Araneta Center Inc, which owes P463,050; and Joymart and Isetann which has to pay P399,420.
The COA also noted anomalies in contracts like expired ones and computations that were not submitted.
It recommended that the LRTA collect the correct amount of rentals and get better terms on rental rates.
It also suggested that the LRTA require the payment of security deposits, comply with rules on the reasonability of contract terms, adjust disadvantageous rental rates and require the submission of documents from the concerned lessees.
Government auditors noted that the LRTA Business Development Division (BDD) committed to the submission of the contracts and other supporting documents and that the practice of month-to-month renewal was already discontinued.
The LRTA also said its BBD is currently conducting research on prevailing rental rates but they also justified their long-term contracts.
But the COA noted that the LRTA said it would conduct a study and “will aim” to comply with the recommendations on adherence to government guidelines.
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