Mercado: SCTEP contractors to pull out
By Ram Mercado, Sun Star
JAPANESE builder-contractors of the Subic-Clark-Tarlac Expressway Project (SCTEP) virtually hold the necks of Filipino subcontractors in a tight economic grip, which hinders the early completion of this highly vaunted infrastructure.
This was the situation last week in the troubled project when local subcontractors met in a gripe session, with most of them signaling to back out of their work.
The local builders, long distressed by a slump in the construction industry, had rushed into accepting work portions in the P21-billion project. Soon they realized that the modest profit they expected was just enough to keep their nose above water.
Although the contractors knew the traditional shrewdness and ruthless pricing policies of most Japanese contractors, they thought they could beat the odds, according to Western Angeles Realty Development director Danny Ramos.
Ramos, who talked to the disgruntled local builders, reported several construction companies had walked out of their contracts because of the pricing squeeze the Japanese contractors put them under.
While the main contractors were working on a Philippine-government approved P270 cost per square meter, only P100 per square meter of work done is being paid the local builders.
The SCTEP infrastructure, funded by Japanese loans, is currently undertaken by two known Niponggo builders with their consortium. The Clark-Subic phase is handled by the group Hobayashi-Kajima; Clark-Tarlac by Hasam and others.
The subcontractors seemed to have entered into a business trap, Ramos said, making do with the barest amount the Japanese could slice the price.
Local builders who ventured into but who expressed great disappointment over their enterprise with the Japanese builders had already pulled out. More firms expressed their desire to discontinue their work.
Aside from the low cost enforced by the principals - Hobayashi and Hasama and consortium - the Nippongo builders did not meet timely delivery of road materials which regularly delayed construction work. A delay of one day in the material arrival would cost the local builder enormous sum in work hours lost as the workers remained idle until the material has come, Ramos added.
Already six months behind schedule, the Japanese contractors in effect punish the subcontractors with this misfeasance. The main builders attribute the delay in road material delivery to lack of equipment, or frequent breakdown of hired movers. Local subcontractors perform "Labor Only" contracts, further removing small margins of project in supply management.
These include known builders Tokwing, Pingul, New Kanlaon Builders, Liberty, Sta. Clara, William Tan, O.R. Sarmiento, RD Policarpio, Blas Cervantes.
Another obstacle to the smooth progress of the SCTEP is the right-of-way disputes in various communities traversed by the project, Ramos said. BCDA community affairs officer Leonardo Lopez said the firm is fastly moving to address the disputed, with most land workers and claimants already paid.
Reports from Manila quoted Taiwanese and Singaporean investors who expressed dismay over the delay in the SCTEP work. "This would set back our timetable of participation in the development of industrial activities in the economic zones of Subic and Clark," the disappointed investors were quoted.
Various multi-national firms who had visited Clark Development Corporation chief Antonio Ng recently told him of their plans to do business in the country after this smooth connection between the economic zones of Subic and Clark, it was learned from CDC public affairs head Angelo Lopez Jr.
With local subcontractors shying away from the SCTEP work contracts due to the stiff pricing policy of the Nippongo builders, the future for an early economic corridor between Subic and Clark is uncertain. Next week, more subcontractors will be abandoning their work assignments due to the irrational and unrealistic treatment the Japanese builders subject local constructors, Ramos said.
The Palace should summon the BCDA top executives, the local builders, and the Japanese firms to address this mounting headache to the President and effect necessary price adjustments and prevent further work slippage in this vital infrastructure, he added.
JAPANESE builder-contractors of the Subic-Clark-Tarlac Expressway Project (SCTEP) virtually hold the necks of Filipino subcontractors in a tight economic grip, which hinders the early completion of this highly vaunted infrastructure.
This was the situation last week in the troubled project when local subcontractors met in a gripe session, with most of them signaling to back out of their work.
The local builders, long distressed by a slump in the construction industry, had rushed into accepting work portions in the P21-billion project. Soon they realized that the modest profit they expected was just enough to keep their nose above water.
Although the contractors knew the traditional shrewdness and ruthless pricing policies of most Japanese contractors, they thought they could beat the odds, according to Western Angeles Realty Development director Danny Ramos.
Ramos, who talked to the disgruntled local builders, reported several construction companies had walked out of their contracts because of the pricing squeeze the Japanese contractors put them under.
While the main contractors were working on a Philippine-government approved P270 cost per square meter, only P100 per square meter of work done is being paid the local builders.
The SCTEP infrastructure, funded by Japanese loans, is currently undertaken by two known Niponggo builders with their consortium. The Clark-Subic phase is handled by the group Hobayashi-Kajima; Clark-Tarlac by Hasam and others.
The subcontractors seemed to have entered into a business trap, Ramos said, making do with the barest amount the Japanese could slice the price.
Local builders who ventured into but who expressed great disappointment over their enterprise with the Japanese builders had already pulled out. More firms expressed their desire to discontinue their work.
Aside from the low cost enforced by the principals - Hobayashi and Hasama and consortium - the Nippongo builders did not meet timely delivery of road materials which regularly delayed construction work. A delay of one day in the material arrival would cost the local builder enormous sum in work hours lost as the workers remained idle until the material has come, Ramos added.
Already six months behind schedule, the Japanese contractors in effect punish the subcontractors with this misfeasance. The main builders attribute the delay in road material delivery to lack of equipment, or frequent breakdown of hired movers. Local subcontractors perform "Labor Only" contracts, further removing small margins of project in supply management.
These include known builders Tokwing, Pingul, New Kanlaon Builders, Liberty, Sta. Clara, William Tan, O.R. Sarmiento, RD Policarpio, Blas Cervantes.
Another obstacle to the smooth progress of the SCTEP is the right-of-way disputes in various communities traversed by the project, Ramos said. BCDA community affairs officer Leonardo Lopez said the firm is fastly moving to address the disputed, with most land workers and claimants already paid.
Reports from Manila quoted Taiwanese and Singaporean investors who expressed dismay over the delay in the SCTEP work. "This would set back our timetable of participation in the development of industrial activities in the economic zones of Subic and Clark," the disappointed investors were quoted.
Various multi-national firms who had visited Clark Development Corporation chief Antonio Ng recently told him of their plans to do business in the country after this smooth connection between the economic zones of Subic and Clark, it was learned from CDC public affairs head Angelo Lopez Jr.
With local subcontractors shying away from the SCTEP work contracts due to the stiff pricing policy of the Nippongo builders, the future for an early economic corridor between Subic and Clark is uncertain. Next week, more subcontractors will be abandoning their work assignments due to the irrational and unrealistic treatment the Japanese builders subject local constructors, Ramos said.
The Palace should summon the BCDA top executives, the local builders, and the Japanese firms to address this mounting headache to the President and effect necessary price adjustments and prevent further work slippage in this vital infrastructure, he added.
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