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Audit: PUP ‘wasted’ P575m on 2 buildings

By Merck Maguddayao | Oct. 04, 2013 at 12:13am
The Commission on Audit described as a “waste of government funds” the purchase of two dilapidated five-storey Government Service Insurance System (GSIS) Condotel-Hostel buildings in Manila for P575.7 million in 2007 by the Polytechnic University of the Philippines.

The result is that PUP is now paying for the structures for P1.6 million annually for 30 years and while already incurring rehabilitation cost of P101.2 million for Building A, COA records show in its 2012 Annual Audit Report of the country’s biggest state university.

PUP explained that in order to generate more income to augment its resources it purchased the property in Lepanto, Manila six years ago with a feasibility study stating that one of the buildings was intended to serve as an extension of the College of Technology to accommodate the projected increase in its enrollees while the other was to be converted into a University Dormitory primarily for students, faculty members, administrative employees and transients, according to the COA report.

COA stated that only two floors of Building A were utilized by the College of Technology and College of Engineering while Building B, which could not be utilized because it was not in usable condition when acquired, is left deteriorating and exposed to the natural elements which resulted in the waste of government resources.

As of 2012 yearend, records show that PUP has already paid GSIS a total of P84.15 million from March 2008 to December 2012, leaving an unpaid balance of P491.64 million payable over the remaining period of 25 years.

On the other hand, renovation and or rehabilitation costs for Phases 1 to 3 for Building A alone already amounted to P101.3 million, out of the contract cost of  P181.98 million for the conversion of the Condotel-Hostel into classrooms and dormitory, thus, bringing the total cost of the two buildings to P677.1 million.

During inspection, state auditors found out among others that the basements of both buildings were flooded because the area is prone to floods due to its proximity to Pasig River.

“Before making the purchase, PUP should have taken into consideration the physical condition of the buildings and should have thoroughly and meticulously studied whether or not acquiring them would be feasible, viable and advantageous to the University,” the 2012COA report released yesterday read.
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