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THE Cebu City Council passed a resolution urging the Commission on Audit (COA) to conduct a fraud audit on the contracts for the first and second phases of the City’s traffic signal light modernization project, citing the contracts were not signed by the mayor and lacked council approval.
As the City Council raised concerns over irregularities in implementing the first and second phases of the traffic signal light modernization project, it also called for the postponement of payment for the second phase.
During the regular session on Wednesday, Nov. 6, 2024, Councilor Jocelyn Pesquera moved to pass a resolution postponing the payment for Phase 2 of the modern traffic light system, which cost P248 million.
She stressed that Casas, or anyone other than the city mayor, had no authority to sign contracts on behalf of the city government while Labella was still alive, fit, and able to perform his duties at the time the documents were signed.
She added that there were no documents from the Office of the Mayor or a resolution from the City Council authorizing Casas to sign these documents.
Pesquera said that these contracts can be potentially void and null due to these circumstances, and the City Government will no longer be obligated to rescind the contract.
The project consists of four phases, with the first two awarded to Manila-based suppliers Triune Electronics Systems Inc. and Cylix Tech CCTV and Smart Surveillance. This is to replace the more than 40-year-old traffic lights initially installed by the Sydney Coordinated Adaptive Traffic System with modern digital traffic signal lights.
Allegation
Pesquera alleged overpricing or price discrepancies in various equipment and systems supplied for Phases 1 and 2, citing a comprehensive report from Metro Manila Development Authority (MMDA) experts who reviewed the modern traffic lights in November 2023.
“From the items that I have (personally), we could save at least P20 million just for Phase 1, and everything here is multiplied per intersection, and in Phase 1 we have 18 intersections,” Pesquera said.
“On the presentation of MMDA in their report, there is a really big price discrepancy…Their cost per intersection was P3 million, but for the City of Cebu, it is about P16 million per intersection,” she added.
Pesquera said that during former mayor Michael Rama’s term, payments for Phases 1 and 2 were halted. When the supplier demanded payment, Rama sought assistance from the MMDA to review the traffic lights.
In addition to its findings, which were endorsed to the council on Sept. 18, 2024, the MMDA pointed out that the City’s traffic light system cannot process real-time traffic conditions and lacks safety features for pedestrian crossings.
MMDA also made several recommendations to improve the system.
On Sept. 25, 2024, Mayor Raymond Alvin Garcia formed a task force to investigate reports of overpricing and assess the suitability of the City’s new traffic signal light system. The move came after the supplier demanded full payment of the P480 million total cost for the first two phases, threatening to seek intervention from the Office of the Ombudsman if the payment was not made.
Awaiting recommendations
On Monday, Nov. 4, Mayor Garcia said he is waiting for the task force’s final recommendations on the review of the first two phases of the modern traffic light system.
During the deliberation, Councilor James Anthony Cuenco, chair of the committee on transportation, said he attended one of the task force meetings last week. He noted that the task force was expected to submit its findings to Garcia by Friday, Nov. 8, at the latest.
Cuenco also questioned who formulated the terms of reference for the project, asking if it was the City Transportation Office, the Department of Engineering and Public Works (DEPW), or the contractor.
In response, Pesquera suggested inviting representatives from the transportation officve or DEPW to address the query.
Payment halt
Cuenco said he is considering filing a resolution next week to halt the payment for Phase 2, citing that the fraud audit will require time to complete.
He explained that most of the equipment for Phase 2 has already been delivered, but the contractor has refused to activate it until Phase 1 is fully paid.
However, Cuenco pointed out that the systems and equipment provided do not meet the City’s needs, as they are not modern. He suggested settling the payment for Phase 1 but halting payment for Phase 2.
He added that the City Legal Office (CLO) must be consulted in the Phase 1 and Phase 2 contracts.
Cuenco also said that the current system lacks a “No Contact Apprehension” feature, which could serve as a revenue source for the City Government.
According to records from the City Accounting Office, Pesquera said only eight percent of the contract price for Phase 1 remains unpaid.
On Oct. 21, Garcia said the City Government had already made a 15 percent down payment on the P248 million cost of Phase 2.
Pesquera said records show that Garcia approved the release of 30 percent of the payment for Phase 1 last August or September, bringing the total paid to the contractor to around P213 million.
She added that there must be a retention of 10 percent on the payment in the contract price.
Authentication sought
Last month, the council approved a resolution requesting the Department of the Interior and Local Government Legal Department, the CLO and the COA Legal Department to comment on the legality of the contract.
Recently, the council also approved a resolution requesting the National Bureau of Investigation to verify the authenticity of Labella’s signature on the contract.
Councilor Nestor Archival passed a corollary motion requesting that the transportation office submit a report within 15 days detailing recent payments made to the supplier.
On the other hand, Councilor Noel Wenceslao urged the accounting department to present all disbursement documents related to the payment of the first two phases of the contract.
Councilor Rey Gealon requested the transportation office to consult with stakeholders who are experts in implementing a “No Contact Apprehension” system to incorporate this into the modern traffic lights.
The modern traffic light project has two phases, covering a total of 45 intersections citywide, with 18 intersections in Phase 1 and 27 intersections in Phase 2.
The new system features underground cables and 184 high-definition cameras with artificial intelligence capabilities for traffic flow detection and automatic signal timing adjustment. The cameras can also capture license plate numbers and images of individuals inside vehicles.