NEWS: Mayor, 8 others face Ombudsman suit over P90 M bond flotation project in Compostela Valley

aug 24

The entire town officialdom except for three opposing councilors in Nabunturan, Compostela Valley were charged of graft case at the Office of Ombudsman for Mindanao by a journalist and community leader for pursuing the P90-million bond flotation intended to fund the construction of a new public market building.

Charlie “Cha” Monforte, correspondent of Philippine News Agency, Business Mirror and local dailies, and Emilio delos Reyes, a president of a local parents-teachers association, charged in their joint complaint affidavit filed Thursday at the Ombudsman that Nabunturan Mayor Macario Humol, Vice Mayor Romeo Clarin and his seven councilors favoring the project have allegedly committed gross violations to Anti-Graft and Corrupt Practices Act for failing to conduct public bidding in getting the services of the Preferred Ventures Corporation as the financial advisor/consultant of the bond flotation.

Respondent councilors of the case were Darwin Tan, Iluminada Cabuga, Eduardo Menoza, Vivencia Secuya, Cheryl Asion, indigenous peoples’ representative Felipe Masambo and Sangguniang Kabataan representative Jennifer Gamao.

Monforte and Delos Reyes have earlier prayed a petition for preliminary injunction and restraining order at the Regional Trial Court-Branch 3 in Nabunturan in trying to stop the implementation of Municipal Ordinance No. 2008-10 approving the P90-million bond flotation scheme.

RTC Branch 3 Judge Hilarion Clapis Jr has yet to rule on their petition.

For opposing the local bond float since early last year, Councilors Raul Caballero, Alfonso Tabas and Editha Arangcon were spared from the complaint.

The complainants stated that under the project Preferred Ventures Corp. is guaranteed a consultancy fee of P2.37 million and its project engagement “is not limited to advisory and review services but also includes pre-investment, feasibility, design, construction supervision, management and related services and other technical services and special studies”.

They claimed that even without the “legislative enactment, ordinance or resolution to hire a financial consultant and advisor for the municipality’s infrastructure project, Mayor Humol proceeded to enter into Memorandum of Agreement with Preferred Ventures” and “(it) became an automatic financial consultant/advisor without passing through the bidding procedure as required by law”.

They charged that the MOA signed on February 14, 2008 “is illegal and void ad initio” and that despite this, Humol proceeded also to conduct a pre-bid conference last May 15 for the construction of the public market building.

They also claimed that the bond flotation option is “grossly disadvantageous to the government” as even found out in the comparative study made earlier by the town’s Local Finance Committee (LFC) which recommended for a direct bank borrowing than the local bond float as in the latter “there are undetermined expenses that will result in problems in the budgeting and accounting process later”.

The LFC also stated in its study that under a loan from government financial institution “the cost of borrowing will be properly stated and easily provided in the budget” aside from the fact that “easier terms can be negotiated with the depository bank”.

Moreover, the complainants stated that as found out by the LFC “the LGU of Nabunturan will already spend (P39.6 million) on interest payment alone” under the bond float scheme “compared to only a projected total interest payments for GFI borrowing at (P30.9 million) for the same period of time”.

The complainants also charged that based on the approved final feasibility study made by Preferred Ventures Corp the monthly stall rental for a 10-square meter space could shoot up to P10,500 rate, and at that  “unconscionable rate” lowly market vendors whose stalls were burned over three years ago could no longer afford and face the spectre of being displaced from their long source of livelihood.

With that rate and to make the project feasible, self-liquidating as well as income-generating instead “in sum, the proposed public market building supposedly funded through the much-ballyhooed ‘bond flotation’ would be anti-poor and anti-people,” the complainants stated in their complaint affidavit to the Ombudsman. (RUN)

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