Chiz stops construction of “costly” Senate building

MANILA, Philippines – Senate President Francis Escudero has ordered the halt of construction of the new Senate building in Taguig City, calling the total cost at P23 billion, “shocking and distasteful.”

In a casual interview with Senate reporters yesterday, Escudero admitted that he was surprised to learn of the allocation of P23 billion for the construction of the new Senate building, although, he noted, only an amount of P8.9 billion had been tendered.

The Senate President quickly clarified that the suspension decision was not due to questionable circumstances, but that he simply considered the costs to be excessive.

“It is shocking and distasteful that the Senate is spending so much on our new home and office,” he said. “With so many bills I’m asked to sign, I want to look at it first and carefully consider whether it is really appropriate.”

Escudero said they would also look at how to reduce costs.

He disclosed that the cost of the project, originally estimated at P8.9 billion, has now risen to P13 billion and another P10 billion is needed for completion, bringing the total cost to P23 billion.

“It’s a little hard for me to swallow and it’s really surprising,” he said.

Escudero announced his decision to suspend construction of the new Senate building during his first flag-raising ceremony as Senate president, informing officials and staff that the planned move to the new building would be delayed.

“It is not true that we will be able to move into the new building and property this September. It is also not true that we will be able to move before the end of the year. I do not think it will be until 2025 because there are still many things that need to be prepared and there are also many things that we have seen and experienced that still need to be analyzed and studied,” he said.

Escudero noted that the unexpectedly high spending is particularly difficult to accept given the economic crisis facing most Filipinos.

He added that he has already given specific instructions to Senator Alan Peter Cayetano, the new chairman of the Senate Committee on Finance, who will be responsible for ensuring the smooth relocation of the Senate to the new building and overseeing the quality and timeliness of the project.

“I have instructed Senator Cayetano, based on his recommendation and letter, to postpone all bills and works until we can analyze and study them,” Escudero said.

He said he made the decision after receiving a detailed report and recommendations from Cayetano last Friday on the rising costs, quality issues and management inefficiencies related to the new Senate building project.

After assuming the presidency of the Senate on May 22 last year, Escudero told reporters that the new Senate building would not be ready in 2024, 2025 or even 2026.

Cayetano’s report highlighted several critical points, including a dramatic increase in the project budget from the original P8.9 billion to an expected P23.3 billion.

The committee’s preliminary review revealed numerous variations, deviations and modifications to the project that were not properly validated. These changes resulted in additional costs of P833 million, representing nearly 10 percent of the original contract price.

Inspections by the Senate’s coordination team also raised questions about the quality of execution and compliance with the original scope of the contract.

The report also pointed to procurement delays and missteps by the project manager, the Department of Public Works and Highways (DPWH), that contributed to project delays and cost overruns.

In his report, Cayetano explained that the DPWH’s actions will determine whether the agency and the contractor, HillMarc’s Construction Corp., will implement the remaining portion of the project, which has an approved budget of P10.33 billion but has not yet been awarded.

Cayetano proposed that the DPWH be required to establish a high-level liaison team for this project, consisting of the DPWH Unified Project Management Office as project manager and the Bureau of Design for proper coordination.

He also recommended bringing in an external construction management team to clarify and validate the project up to its current status, both technically and financially.

“This will assist in a value analysis aimed at reducing construction costs, taking into account the high planned costs, the subsequent delays and the desire to hand over a building that conforms to the original design,” he said.

Meanwhile, former Senator Panfilo Lacson, who oversaw the construction of the new Senate building as chairman of the Committee on Accounts in 2018, demanded clarification on the issues surrounding the project.

“While I agree with SP Chiz’s decision to revise the cost of the new Senate building from P23.3 billion to the original estimate of P8.9 billion we had when construction began, I would like to clarify some points based on my recent request to my former staff and team of advisers, which were taken over by Senator Nancy Binay when she succeeded me,” Lacson said in a Viber message to The STAR.

He pointed out that the DPWH is the implementing agency and therefore submits estimates and change orders (VOs), but ultimately it is the Senate that decides or rejects the proposed additional budgetary allocations of the DPWH.

“Not a single peso of the P10.3 billion in additional funds has been allocated even though it is already part of the GAA (General Appropriations Act) for 2024 and covered by the MYCA (Multi-Year Contractual Authority) since Senator Nancy and her team consistently objected to the DPWH’s requests for VOs,” he said.

The new total cost of P23.3 billion includes the cost of equipment accessories and technical components of the security system as well as the acquisition of the land, which was then valued at P1.62 billion (P90,000 per square meter) and has since increased tremendously in value, according to the former senator.

“As far as I know – and this may not be true – the current property value in the same area is P500,000 per square meter. There is a multi-level underground parking lot for senators, their staff and employees. I am not sure if it has been changed,” he said.

“As for the senators’ office space, I have to look into it since I have acceded to the request of Senate Minority Leader Aquilino Pimentel III to accommodate at least 65 regionally elected senators should the proposed constitutional amendment be implemented at that time. Therefore, I cannot imagine that the offices in the new Senate building could be smaller than the GSIS building currently used by the Senate,” he added.

Equally shocked

Binay was also shocked by Escudero’s decision to suspend the construction of the new Senate building.

“Honestly, I was also surprised where SP Escudero’s information about the new Senate building came from,” she said.

“Unfortunately, if SP had had the time to inquire about the construction developments, he would have been more enlightened and would have given more input and suggestions on how to save more and not delay the Senate’s move to the new building,” she added.

Binay said Escudero was a sitting senator in 2019 and part of the 17th Congress, and expressed his belief that he was informed about the project costs.

She said Lacson clarified in plenary in February of the same year that the approved multi-year commitment authorization for the new Senate building was P8.9 billion, which covered the “core and shell” of the four-towered building, while the interior and finishes were completely separate.

“Let’s talk about parking – the new Senate building in Taguig has a three-story underground parking lot. It is false news that there is no parking there,” the senator noted.

“During my tenure as Chair of the Committee on Public Accounts, we sent official invitations to all Senators for eye inspections and one-on-one meetings on the progress, status, timelines and other matters related to the new Senate building,” she added.

Binay said she understood that Escudero had good intentions in reviewing the budget for the new Senate building, but the review needed to be expedited.

She said there was great urgency to complete construction by 2025 and delays would mean cost adjustments, additional fees, penalties and another round of rent increases.

“The Senate cannot afford a setback because every day of delay has a cost. I agree with SP that we must look for ways to reduce costs,” Binay said. “If there are questions and clarifications or things that need to be verified or confirmed … I am just a call or text away.”