A Fatally Flawed Study
(Part IV)

        Today, this column will again be devoted to bringing into focus the feasibility study prepared by Preferred Ventures Corporation (PVC) on the Proposed New Tacloban Market, Bus Terminal and Shopping Center.

        For a short background: the project involves the sale of “Onward Tacloban Boards” amounting to P315 million to fund the project which will be located in Barangay Abucay, an area consisting of six hectares now used as a garbage dump.

        The bonds will carry a term of 7 years at an interest rate of 11% per year. In other words, the P315 million plus the value corresponding to the 11 percent interest will be paid back within 8 years from the sale of the bonds. That’s roughly P167.750 million in interest payment that the city goveornment will have to put up to pay for the bonds as presented in the study.

        In previous weeks, I have looked at the over-all aspects of the study then tackled the market aspects last week.

        In today’s column the technical aspects will be mentioned.

        The most glaring gap in this part of the study is the absence of a cost breakdown. How was the project cost of P299 million arrived at?

        Without such a cost breakdown, how would the city government know whether the P315 million bond float is sufficient to complete the project. Conversely, it is possible that the amount exceeds the required funding for the project.

        The study should include an analysis of the timing, nature and schedule of resource (that is, funding and manpower) of the project. A distinction should be made between the resources required for the pre-operational stage (or construction period) and those needed in the operational phase (when the project’s facilities are now open for public use) including those needed for maintenance.

         Such as a distinction is important in determining the funds needed for each phase.

         With this distinction, it would be possible to conclude whether or not the funding required for operating the facilities is adequate.

         It is also advised that no bidding and/or award of contract for the construction of any part of the project should be made unless the detailed engineering investigation, surveys and designs for the project have been sufficiently carried out and duly approved.

         The entire set of comments on this project which have been or will be mentioned in this column has been sent to the City Mayor, Vice-Mayor and Councilors of Tacloban City.

         The series of comments made public in this column should broaden the public’s understanding of the project. It is their patronage of this project which will have a big impact on whether or not it will be successful in meeting objectives.

         As mentioned in previous issues, a project this big needs the full attention of all residents of Tacloban City.