Aug 022014

Is P400 million enough to construct an 11-storey building? 

Observers note that for the  Makati City government under the leadership of former Mayor Jejomar Binay and current head Junjun Binay, it wasn’t.

In 2007, councilors passed a resolution to secure a P400 million loan from the Land Bank of the Philippines (LBP) for the construction of an 11-storey parking building.

Based on official data from the National Statistics Office (NSO), the said amount was more than enough to cover the construction cost as only P7,691 per square meter was needed for commercial and institutional buildings during that time.

With a total area of 31,928 square meters, the construction of the parking building will cost just aroundP246 million, giving the city savings of about P154 million.

However, P400 million was still not enough.

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In 2010, or less than three years after the initial fund was approved, the city council and new Mayor Junjun Binay approved the appropriation of an additional P760 million for the construction of the building, bringing its total to P1.16 billion.

Not contented with the additional funds, the Binays did not stop there.

The next year, Mayor Binay approved a city council resolution earmarking another P400 million from the P5-billion loan it obtained from the Land Bank of the Philippines (LBP) for the construction, raising the total budget to P1.560 billion.

However, the existing acceptable construction cost per square meter is only P25,000 per square meter or P798 million for the whole building. Through simple computation, the project was grossly overpriced by P761.8 million.

Sadly, the approved amount covered only building construction so another P47 million was earmarked for furniture and fixtures and another P350 million for the transfer of the Urban Development Department of Makati City to the new building.

With total expenses reaching almost P2 billion, the 11-storey Makati parking building could make it to the Guinness Book of World Records as the most expensive parking building in the world.

The Binays may claim again and again that they were allowed by law to use continuing appropriation for unfinished projects such as buildings, but it will not erase the fact that the project is overpriced.

This latest overpriced project came as no surprise because Vice President Binay has been hounded by cases of overpricing and graft and corruption during his term.

In the 1990s, observers note that Binay built the most expensive city hall in the country, which, according to his critics, cost about P260,000 per square meter.

Binay’s defenders and minions, however, placed the value of the city hall at around P220,000 per square meter.

Either way, an average of P240,000 per square meter for a city hall was too much.  A case was filed against Binay but luckily, he dodged the bullet.

Jejomar and Elenita, who took over as mayor from 1998 to 2001, were also charged with graft and corruption for alleged irregular and overpriced purchases worth P232 million for the city hall.

The charges against the couple were originally dismissed due to technicality but the case against Elenita was recently revived when the Ombudsman found probable cause after a thorough review of the case.

The Binays insist that the issue was politically motivated.

The younger Binay claimed that the case was part of a grand plan to besmirch the reputation of his father and derail his presidential bid in 2016.

The next day, the Vice President appeared on several television programs and declared that more issues and cases will be thrown at him by political opponents as 2016 elections near.

In Makati, the Vice President said, they always make sure that buildings and other projects are of high quality, or in other words expensive and overpriced.

What Binay was trying to say is: Why settle for an ordinary and cheap Crispa when you buy a Lacoste or Guess using people’s fund.

In the coming months, the Vice President expects a slew of corruption cases to be filed against him and immediate family members.

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