Lapu mayor sued for purchase of ‘overpriced’ rice, solar lamps

·7 min read

LAPU-LAPU City Mayor Junard “Ahong” Chan is facing three charges anew before the Office of the Ombudsman-Visayas, along with several city officials and private entities, for alleged involvement in the anomalous purchase of overpriced products in 2020.

Four Lapu-Lapu City councilors and 10 other individuals, filed on Monday, April 25, 2022, cases of plunder, malversation of public funds, and violation of the Anti-Graft and Corrupt Practices Act against Chan and several individuals, including former City Social Welfare and Development Office head Ma. Annabeth Cuizon, City Disaster Risk Reduction and Management Office head Nagiel Bañacia, City Treasurer Felicitas Baguio, City Accountant Helen Dungog, members of the Bids and Awards Committee, namely: James Alan Sayson, Ronaldo Malacora, Claire Cabalda, Romeo Berame, Judith Furuta and Meriam Consuelo Fernandez, and private individuals Charles Lim, Ma. Sunshine Lim, and officers of Heritage Muebles Mirable Export Inc., as well as the owners and responsible officers of various suppliers of rice who remain unidentified.

The complainants include Councilors Michael Dignos and Flaviano Hiyas Jr., both lawyers, Dr. Alexander Gestopa Jr. and Rodolfo Potot, and concerned citizens Dr. Cipriano Flores, Elias Berdin, Eduardo Patalinjug, Arsilito Pejo, Antonio Amistad, Diosaminda Hayashi, lawyer Jeannify Tan, Charles Vailoces, Delano Eviota and Humprey Elvira.

The complainants claimed that there had been about P213,432,895 worth of overpriced purchases of rice, disinfectants, solar lamp posts and kits in 2020.

In response, Mayor Chan said the charges were politically motivated since all the complainants were allied with Team Deretso and the charges had been filed as the May 9, 2022 elections near.

Chan is seeking reelection as mayor against Lapu-Lapu City Lone District Rep. Paz Radaza, who is from Team Deretso.

Pricey rice

In a press conference on Monday in Boosog Lasang Pinoy, Baseline Mango Avenue in Cebu City, the complainants noted the utilization report on the Supplemental Budgets for 2020, in which Lapu-Lapu City procured a total of 160,992 sacks of rice for P410,636,900.

For the purchase of sacks of rice alone, its alleged overpriced procurement was at P136,843,200.

They said the City could have saved P850 per 50-kilo sack if it had bought the rice at P1,700 instead of the City’s average purchase of P2,645 per sack from at least 10 suppliers.

Based on the disbursement vouchers secured by the complainants, they noted the suppliers as anomalous, citing the Friendship Grain Center in Isabela, for which there was no match for its business name in the BNRS (Business Name Registration System) of the Department of Trade and Industry (DTI) Online and Securities and Exchange Commission (SEC) online; Queen Mary’s Gen. Merchandise in Mandaue City’s purchase, which appeared to have been made in cash but with no date indicating when the payment was received; Tupei All Star Trade Inc., which was not selling rice but only facilitating importation for its clients, whose transaction also appeared to be in cash; and A.P.R. Palay Dryer and Rice Mill in West Dagami, Leyte, which was not included in the BNRS DTI Online and SEC online as well as not having entries for the check and bank name in the disbursement voucher.

Other rice suppliers were Insee Diamond Trading Co. in Cebu City which had no physical store and was described by Google as a company engaged in the sale of spare parts and accessories for cars and industrial vehicles; Biclat Agrarian Reform Community Inc. in Biclat, San Miguel Bulacan, where the person managing the cooperative said the retail price of rice ranged from P1,700 per sack for Super Angelica and P2,350 for Jasmine Rice but added that she could reportedly ask for approval to drop the price by P300 per sack if the order was 1,000 sacks and above.

Golden Seven Distribution in Santa Fe, Bantayan Island was also reportedly not selling rice as it had no physical store and only had a bodega (storehouse) for its goods as it distributes junk food and sari-sari store items.

The name of Ride’s Enterprises in Tabok, Mandaue City, on the other hand, could not be found as well in the BNRS of DTI, while J and M Rice Trading in Abuyog, Leyte had no entries of check and bank name in the disbursement vouchers.

Ching-Ching Enterprises in Aurora, Zamboanga del Sur, whose main products were rice husk and husk pellets, also had no entries for the check and bank name.

Citing information from the 2020 Commission on Audit (COA) Report, several procurements amounting to P206,223,750 were awarded to suppliers without documentary requirements or the required warranty clause.

COA also noted that there was no distribution list of the procured rice.

Alcohol

As for the alcohol and disinfectants, the overpriced purchases reportedly reached P403,750 as these were bought at P1,287 per gallon.

They noted that the prevailing price in May 2020 was not more than P600 per gallon, while IPI sold the products only for P500 per gallon.

Solar lamps

The complainants further said overpricing of solar lamps with posts based on the difference in the price paid to the supplier of the city and the media price quoted by other suppliers was P27,051,750.

Rapidry, supplier of Lapu-Lapu City, had a price of P101,570 per set of 130w solar lamp with post, of which P68,700 was for the solar light and P32,870 for the post.

For Golden Sun Solar Energy, each set cost only P20,595, while P20,500 and P12,749 in Megasamsonite Inc. and Ecoshift Corp., respectively.

The city purchased about 7,263 sets at P9,495 each or a total of P68,962,185.

All procurements were reportedly supplied by Heritage Muebles Mirabile Export Inc. (Heritage).

The online price of exactly the same solar kits was only P2,760 per set and could be discounted if ordered in bulk.

The overpricing of kits based on the difference in the price paid to Heritage (P68,962,185) and the median price quoted by Jared Technology Inc. (P27,599,400) is around P49,134,195.

They said the total overpricing of solar lamp posts and kits had reached P76,185,945.

The complainants said the pending case of malversation of public funds and graft and corruption amounting to P47,225,550 filed last February also involved purchases from Heritage, a furniture exporter and land developer, based on 2020 COA Report.

There were also numerous purchases from Heritage in the year 2021 amounting to P35,975,550.

Response

In response, Marky Bautista, public information officer of the Lapu-Lapu City Government, said, “Again, Lapu-Lapu City has no record of disallowance from the Commission on Audit from 2020 and 2021. DILG (Department of the Interior and Local Government) even awarded Lapu-Lapu City the 2019 Seal of Good Governance and 2021 Financial Good Housekeeping.”

The councilors said the filing of the case was not politically motivated since they could not file without evidence. They said it had been difficult to get documents from the concerned officials.

Mayor Chan said he could not understand why they got to the point of looking for issues on the prices of rice when two years had already passed.

He said there was a huge demand for rice in the country amid the coronavirus disease (Covid-19) pandemic, which led to the increase in prices.

“Isip amahan sa siyudad, nangita raman unta ko og paagi nga mapkaon ang akong mga anak. Kung sala nako ang paghatag og pagkaon sa mga katawhan, andam ko nga magpapriso basta lang dili mangamatay ang mga Oponganon sa gutom. Andam nako dawaton ang sakripisyo; nungka ang mga katawhan maoy masakripisyo,” said Chan.

(As father of the city, I was just looking for a way to feed my children. If I was at fault for giving food to the people, I am willing to go to prison as long as the Oponganons do not starve to death. I am ready to accept the sacrifice; never should it be the people who should sacrifice,” said Chan.

Baustista said this is the third case filed against Chan this year.

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