Rama to terminate contract with new CCMC contractor

“I HAVE to cross the Rubicon. The die is cast.”

This was the statement issued by Cebu City Mayor Michael Rama during a press conference on Wednesday, Nov. 9, 2022, after he announced that he will terminate the contract of M.E. Sicat Construction, which has been working on the seventh to 10th floors of the new Cebu City Medical Center (CCMC).

Rama could no longer bear the delay in the completion of the public hospital, whose construction was started in 2015 during his second term as mayor.

“As your mayor, I have decided to cancel or in effect we will pursue the cancellation of the constructive works under the law with observance of due process at this point in time. I have become impatient for the people. All construction works are hereby canceled, and surely due process will be observed,” he said.

Jerone Castillo, special assistant on projects under the mayor’s office and former city attorney, said the mayor can terminate the contract with M.E. Sicat under Republic Act 9184, or the Government Procurement Reform Act.

“(Their) failure to comply with a valid instruction of the procuring entity under these rules is enough basis for us to terminate the contract. They failed to deliver what they were supposed to do, based on the contract, based on their obligation, based on their commitment to the mayor as head of the procuring entity,” he said in a mix of English and Cebuano.

M.E. Sicat Construction, however, has denied that it failed to meet its obligations in the building of the CCMC.

The mayor’s office has created a contract termination review committee, as prescribed by law, to give due process to the involved party.

Shortchanged

Rama said he doesn’t understand why the project is not yet finished after seven years, considering enough funds had been allocated for its construction.

As a result, he said, the City has failed to provide basic services.

“It is my view that they have been shortchanged of expected health, medical and diagnostic services and impatient as to the poor realization of their dream hospital for the poor with the rich man’s service,” he said.

The mayor said there won’t be a public bidding, adding that members of the bids and awards committee will find a way so that the City Government won’t have to spend to finish the CCMC.

“No more (public bidding), I have enough of it. As much as possible, we resort to certain arrangement. If there is a will, there is a way,” he said.

M.E. Sicat won the P900 million contract to finish the shell of the seventh up to the 10th floor of the CCMC in April 2022.

However, when Rama recently inspected the site, there was no progress in the construction.

“Wa man gyud koy nakit-an nga kalihukan didto sa seventh floor. Therefore, it’s about time. It’s about time,” he said. (I did not see any developments on the seventh floor.)

At the end of July 2022, however, the contractor and CCMC management, together with Cebu City’s Department of Engineering and Public Works, told Rama that they would concentrate on finishing the third and fourth floors so these could already be used for daily operations by Oct. 28, the mayor’s birthday. Rama approved this request.

Meanwhile, Rama said there is a Cebuano philanthropist who wants to remain anonymous who is willing to help finish the construction of the 10-story facility.

Rama has also been on at least three rounds of “investment begging” in the National Capital Region since August, during which he has obtained pledges from tycoons and business groups to fund one floor each of the CCMC.

Among those that made pledges were tycoon Manny Pangilinan, Ayala Land Inc., Robinsons Land Corp., Filinvest Land Inc., SM Group and SBS Philippines Corp., according to the Cebu City Public Information Office last month.

Compliant

Michael Allan Sicat, president of M.E. Sicat Construction, said Rama had not informed him beforehand about the cancellation of the contract to build Phase 4 of the CCMC.

He told SunStar Cebu Wednesday that he learned about the cancellation only on social media.

“We have not talked about that. I’m unaware of that,” Sicat said.

On whether Rama had basis to cancel M.E. Sicat’s contract, Sicat said: “I’d like to say that I’m compliant with the contract. It’s better that I might have a discussion with the mayor regarding his concerns.”

According to Sicat, the contract he signed as representative of the joint venture of M.E. Sicat Construction Inc. and Avecs Corp. with Rama as representative of the Cebu City Government on April 6, 2022 gave him 570 calendar days, or around until late 2023 yet, to complete the interiors of the third and fourth floors, and to construct the seventh to tenth floors of the CCMC.

The contract is worth P907,999,869.74.

As for the birthday deadline of Rama, which was last Oct. 28, Sicat said, “That was just a request,” and that the City Government had been able to inaugurate an operating room on the third floor on that day.

Sicat said that at present, they were “still finishing the third and fourth floors,” while construction of the seventh to tenth floors was “on hold because we’re doing some tests regarding them.”

Sicat said the purpose of the tests was “to test that the first to sixth floors were done properly,” as they were not the ones who built the first six floors.

The first three phases of construction involved three other contractors: C.E. Padilla Construction Inc., C.B. Garay Philwide Builders and Charlz Construction.

Sicat said the M.E. Sicat joint venture currently has 300 people working on site.

Under their Construction Agreement, the Cebu City Government may terminate the contract if the contractor incurs a delay of more than seven days in any phase of the project, or in the event of a substantial deviation by the contractor from the approved plans.

The Cebu City Government could then get another contractor to complete and/or correct the works, the cost of which would be for the account of the M.E. Sicat Construction/Avecs Corp. joint venture.

The Cebu City Government would also be able to terminate the contract if the M.E. Sicat Construction/Avecs Corp. joint venture “does not show satisfactory progress in the works, and has already incurred a negative slippage of 15 percent or more based on contract duration.”

Work on the new CCMC along Natalio Bacalso Ave. in Barangay Pahina Central, began in 2015 yet.

Rama had ordered the old CCMC demolished in February 2014 after it was declared unsafe for occupancy following the 7.2 magnitude earthquake in October 2013. (PJB)