Claiming that up to 60 percent of funds allocated for a number of public works project including control were lost to graft and other irregularities before even construction begins, Senator Panfilo ‘Ping’ Lacson has blamed for this the so-called ‘pass-through’ graft scheme that is prevalent in most government infrastructure projects.
Lacson detailed the practice referred to by contractors as “passing through,” which requires payment of five to six percent of a project’s cost when the construction takes place in a legislative district where the lawmaker is a contractor or has relatives in the construction business.
“For example, if a contractor builds a project in the district of a lawmaker who is a contractor or who has relatives that are contractors, he/she must pay a five-percent ‘passing through’ fee, like a toll. That already deducts from the cost of the project. This is known in the Department of Public Works and Highways (DPWH),” he disclosed in a radio interview.
“The fee is usually five percent, but sometimes it goes up to six. Based on the information we got from contractors, the project is compromised. How will the contractor be compensated if he/she does not use substandard materials or take shortcuts? The government is thus shortchanged,” he added.
The senator spelled out that after factoring in the said fees, along with taxes and commissions, “not even 40 percent” of the budget remains for actual construction.
“This (is where it) often leads to shortcuts—such as building only 50 meters of a dike instead of the required 150 meters, driving sheet piles just three meters deep instead of six, or skimping on gravel and sand mixtures—resulting in weak structures that fail during cyclones,” he revealed.
“The dike will be easily damaged because the contractor scrimps on materials,” he cited while noting that such arrangements also reduce contractors’ profit margins from 15 percent to 10 percent.
“People die during floods brought by cyclones. That is the worst part,” he lamented.
In ending, Lacson recounted how some members of the House of Representatives had contacted him after reports surfaced that he had a list of 67 lawmakers engaged in contracting. He clarified that he does not keep such a list.
“(Defensively), they told me that not all their contracts are with government and most are with private companies. I chuckled and said I don’t have a list and I didn’t know they or their relatives were contractors until they told me (that),” the senator concluded.
