Mark Lapid, ex-DOT chiefs face raps for P300-M Boracay sewerage deal

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Metro Manila (CNN Philippines, May 18) — Actor and former tourism official Mark Lapid, as well as several former and current Cabinet chiefs including former Tourism Secretary Wanda Tulfo-Teo face graft raps for an alleged anomalous deal to operate Boracay's sewerage system.

The complaint was filed at the Ombudsman by Rod Padilla and Roberto Gelito, who identified themselves as residents of the island, on May 8 at the Office of the Ombudsman.

Also implicated in the complaint as members of the TIEZA board are several of President Rodrigo Duterte's and former President Benigno Aquino III's cabinet secretaries including Public Works Secretary Mark Villar, Environment Secretary Roy Cimatu, Interior Secretary Eduardo Año, Interior Assistant Secretary Epimaco Densing, former Public Works Secretary Rogelio Singson, former Environment Secretary Ramon Paje, and former Tourism Secretary Ramon Jimenez.

Also implicated as part of the TIEZA board are former Secretary Teo's husband, Roberto Teo, and Tourism Promotions Board Chief Cesar Montano.

They also included Virgilio Rivera Jr. as Group Director for Regulation and Corporate Development of Manila Water Company, Inc. (MWCI), Luis Juan Oreta, Frank Beaumont, and Jose Rene Almendras as the incorporators of the Boracay Island Water Company (BIWC). Almendras later headed the Department of Energy from 2010 to 2012.         

The complainants alleged Lapid violated Section 3 of the Anti-Graft and Corrupt Practices Act (R.A. 3019) when the Philippine Tourism Agency (now TIEZA) that he headed, on April 21, 2009, went into a joint venture with MWCI to operate, manage and maintain the sewerage systems of Boracay.

MWCI and PTA created BIWC through their joint venture agreement. According to the complaint, the P300 million total annual capital of BIWC was split 80-20 percent between MWCI and PTA (later, TIEZA) favoring MWCI, a private company.

The complainants argued that the deal greatly disadvantaged the government, as MWCI has majority control of BIWC.

"As a consequence of this clever scheme through the questioned Joint Venture Agreement, the PTA was illegally deprived of its income, particularly the Concession Fees equivalent to five percent of the gross income of the Joint Venture Company," the complaint read. 

They also argue that the PTA had rigged the competitive challenge for public-private ventures in granting MWCI the contract to operate the island's sewerage system.

"Respondents, in connivance with one another, violated Section 3(e) of R.A. 3019 for giving MWCI unwarranted benefits, advantage or preference through manifest partiality when they rigged the process of PTA in selecting MWCI as its joint venture partner for the project contrary to the [Joint Venture] Guidelines," read the complaint.

The complainants said had Lapid followed proper procedure, the PTA would have published the invitation to challenge MWCI's proposal within 7 days after it had publicly announced the said proposal through a resolution.

The PTA issued a resolution on March 5, 2009 and announced the challenge on March 17, 2009. The complainants argued they should have announced the challenge on March 12 at the latest. 

The body then awarded the contract to MWCI on April 14 of the same year. The complainants argued that according to the guidelines for joint ventures, private companies should be given 30 days to respond to a challenge. Had the PTA issued the challenge on March 12, then the award should have been granted on April 12.

CNN Philippines has reached out to those named in the complaint for comment.