Senator Panfilo “Ping” Lacson uncovered a new modus operandi involving congressmen with construction businesses, which may contribute to overpricing and substandard work in flood control and other infrastructure projects.
Lacson explained that the new scheme, called the “passing through” method, forces contractors to pay 5% to 6% of the project cost when working in a district where a lawmaker or their relative is the contractor.
“For example, if the district’s influential figure is a congressman who is also a contractor or has a relative who is a contractor, any contractor entering that area must pay a 5% ‘passing through’ fee—like a toll. This immediately reduces the project’s budget. The Department of Public Works and Highways is fully aware of this,” Lacson said in a radio interview.
Based on their investigation, Lacson stated that when passing-through fees, commissions, taxes, and other contractor payoffs are combined, up to 40% of the project funds are lost before any work begins.
“Where will the contractor recover the money if not by cutting corners or using substandard materials? The government gets shortchanged,” Lacson said.
One cost-saving tactic contractors use involves “sheet piles” in flood control projects—instead of driving them 150 meters deep, they only go 50 meters.
“The dike will collapse because the materials are insufficient, and this isn’t visible since they’re buried,” Lacson explained.
Another example is using sand instead of gravel for the dike’s foundation.
“When a storm hits and the river overflows, the dike easily breaks because the foundation lacks strength without gravel,” Lacson said.
Due to the passing-through fee, contractors only earn 10% of the project cost instead of the usual 15%.
