Senate building cost could balloon to P27-B due to inflation

FILE: SUSPENDED. The construction of the new Senate building in Chino Roces Avenue Extension, Taguig City, photographed on Tuesday (July 9, 2024), is on halt for now. Senate President Francis Escudero ordered a comprehensive review amid escalating costs while the Department of Public Works and Highways said the construction is already delayed by 852 days as of July 3 due to variation orders. (PNA photo by Joan Bondoc)

By Joyce Ann L. Rocamora, Philippine News Agency

MANILA – The cost of the new Senate building project could climb to PHP25 billion to PHP27 billion due to inflation.

At the Senate Committee on Accounts inquiry on Wednesday, the Department of Public Works and Highways (DPWH) disclosed that the total estimated cost of the project was based on 2021 rates and does not reflect the present cost of materials.

“Iyong sinubmit namin na ‘yon, aaminin namin na ‘yon po ay hindi updated. So, sa term niyo pwede nating i-update ‘yon (The one that we submitted, we will admit it, was not updated. However, we can update that under your term),” DPWH Buildings and Special Projects Management Cluster project director Soledad Florencio told Senate Committee Chairperson Alan Peter Cayetano.

Florencio did not provide an estimate but former DPWH Undersecretary Antonio Molano Jr. said the updated construction inflation rate could reach at least 20 percent to 25 percent.

“To my estimate, from the time the project was bid out, more or less 20 to 25 percent,” he said.

“Aabutin ng 25 (billion) to 27 (billion), including the cost of land, plus iyong inflationary cost kasama na po (It could reach PHP25 [billion] to PHP27 [billion], including the cost of land plus the inflationary cost).”

The current cost of the project totals PHP23.37 billion, at least PHP8.9 billion of which was for the building’s core and shell, PHP2.5 billion for the fit-out, PHP10.33 billion for the works to complete, and PHP1.6 billion for the land acquisition.

In the latest hearing, a heated exchange ensued between Cayetano and Senator Nancy Binay over the total construction cost, with the latter arguing that the amount was only PHP21.73 billion, excluding the land.

At the July 10 inquiry, Senator Francis Tolentino quipped, “So, we’re now talking of a figure higher than the previously disagreed upon figure between PHP21 to PHP23 (billion).” Binay did not attend.

Cayetano, at the start, apologized to the public, saying the argument between him and Binay was an issue they would deal with later.

“We just all have to remind ourselves: eyes on the ball. What is the ball? Simple lang, paano matapos ‘yong project na to (It’s simple – how to finish this project),” he said.

Meanwhile, he instructed the DPWH to recompute the cost based on current market prices and create an efficient workflow organizational chart that maintains high construction standards.