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SOURCE: Press and Public Affairs Bureau

TADECO contract highly onerous: Speaker Alvarez
12 October 2017 11:00:42 AM

The House committees on good government and public accountability and on justice chaired by Rep. Johnny Pimentel (2nd District, Surigao del Sur) and Reynaldo Umali (2nd District, Oriental Mindoro, respectively, have resumed their joint investigation into the alleged grossly disadvantageous contract entered into by the Bureau of Corrections (BuCor) and the Tagum Agricultural Development Company, Inc. (TADECO).

The congressional inquiry is being conducted following the filing by Speaker Pantaleon Alvarez (1st District, Davao del Norte) of House Resolution No. 867, which seeks to look into the joint venture agreement (JVA) between the BuCor and TADECO on the Davao penal colony.

Pimentel said the basic issue raised in HR 867 is “whether or not the government is being shortchanged in the operation of the joint venture agreement (JVA) executed by BuCor and TADECO involving the Davao prison and penal farm.”

In a separate press conference, the Speaker said the Bucor-Tadeco contract is clearly disadvantageous to the government. He also said the renewal of the contract did not go through public bidding.

“Well, malinaw dito na talagang agrabyado ang gobyerno. Malinaw talaga yun. Kasing linaw yun ng sikat ng araw. Why? Kasi, yung binibigay sa gobyerno, compared doon sa kinikita nila, eto, year 2016 pa lang ha? Tingnan nyo yung submission ng Del Monte Fresh. Yun lang yun ha? Isa lang yun ha? Yung buyer nila. It runs into the billions of pesos. Ang share ng gobyerno, mga hundred plus pesos lang. Malinaw yun,” Alvarez said.

Alvarez also said the contract is not valid, pointing out that the law does not allow the lease of more than 1,000 hectares of government land. He further said the land being leased to TADECO is more than 5,000 hectares.

“Hindi valid, sabi ng DOJ, sabi ng COA, sabi ng SolGen. Hindi valid, kasi tingnan mo yung Constitution, you cannot lease more than 1,000 hectares of land ng gobyerno. At yun ay 5,308 hectares,” Alvarez said.

Pimentel pointed that during the last joint committee hearing that information on the reported earnings and profit of TADECO from the produce of banana was provided by the Securities and Exchange Commission (SEC) based on the audited financial statement submitted by TADECO to the agency.

“For 2016, TADECO reported the production and profit share of P44.9 million given to BuCor which was 0.63 percent of the reported revenue of TADECO. And for 2015, the production and profit share of BuCor was P44.7 million which was 0.65 percent of the revenue of TADECO,” Pimentel said.

“The joint committees also learned that TADECO listed the rental expense under JVA as part of the cost of sales under the line item Land Rentals during years 2002 to 2013. While for years 2014 to 2016, TADECO listed Production and Profit Share under the JVA as part of the cost of sales,” he said.

“This information reflects on the relationship of BuCor and TADECO under the JVA whether it is a partnership or a lessor-lessee relationship,” he added.

Pimentel pointed out that the audited financial statement of TADECO clearly shows that what the company is remitting to BuCor is not profit sharing but only land rental, which is a violation of the JVA.

Pimentel stressed that the information acquired by the joint committees, DOJ on the legality of the JVA, and the facts obtained from other resource persons and stakeholders will guide the joint committees in coming up with a comprehensive report.

According to him, the comprehensive report will include findings on the legality of the JVA and any impairment suffered by the government from such contract.

“In case the commission of malfeasance, misfeasance and nonfeasance is established, the committee on good government and public accountability will recommend the filing of appropriate charges against the erring official or employee,” Pimentel said.

“The committee will likewise recommend necessary remedial legislation to preclude the repetition of similar transaction or a recommendation on how to rectify such transaction that will not be prejudicial to the interest of the state,” Pimentel said.

Umali said the revenues that can be generated from the programs like the BuCor-TADECO joint venture should be optimized in order to fund the planned modernization of the country’s jails, penal colonies, and other correctional facilities. / ABR