The Supreme Court (SC) has reversed the 2015 decision of the Sandiganbayan as it acquitted the former board members and officials of the then Public Estates Authority (PEA), now Philippine Reclamation Authority (PRA), and the private contractor of graft charges in the alleged overpriced construction of the President Diosdado Macapagal Boulevard (PDMB).
The negotiations for the construction of PDMB, then called the Central Boulevard Road Project, started in 1998. The project was initiated in 1995 by then President Fidel V. Ramos. The road project, which was renamed PDMB, was inaugurated on April 5, 2002 and was opened to the public on July 15, 2002.
Acquitted in the SC decision issued on Feb. 8, 2023 and made public last Aug. 1, were former PEA officials Cristina Amposta-Mortel, Theron Victor Lacson, Leo Padilla, Manuel Berifia, Jr., Jaime Millan, Bernardo Viray, Raphael Pocholo Zorilla, Daniel Dayan, Frisco Francisco San Juan, Elpidio Damaso, Carmelita D. Chan, and contractor Jesusito Legaspi.
The SC decision was written by Justice Jhosep Y. Lopez.
In 2015, the Sandiganbayan found them guilty of graft and imposed on them a prison term ranging from six years and one month to a maximum of eight years. They were also ordered to pay civil liability of P173.44 million.
The anti-graft court also declared private contractor Legaspi liable for P57.5 million for the construction of the Seaside Drive Extension, which was not part of the original contract for the PDMB project.
It ruled that those charged simplified the bidding rules because they shortlisted bidders not based on the master list of the Philippine Contractors Accreditation Board.
Also, the anti-graft court ruled that those charged conducted the bidding and recommended the award to Legaspi without detailed engineering specifications in violation of Section 2 of Presidential Decree 1594, and without the required appropriation and actual availability of funds for the total contract price.
In granting the separate petitions filed by those convicted by the Sandiganbayan, the SC agreed with the petitioners that they had to rely on the list of contractors provided by the Department of Public Works and Highways (DPWH) since the PCAB master list was not yet available then.
The SC said: “Nowhere from the evidence presented by the prosecution was it shown that JD Legaspi or any of the bidders was unqualified or had no competence to undertake the PDMB Project because the PEA relied on the DPWH list.”.
“The circumstances that led to PEA's action in utilizing the DPWH therefore negates the presence of manifest partiality, evident bad faith or gross inexcusable negligence under Section 3(e) of R.A. No. 3019,” the SC said.
“At the most, the absence of a detailed engineering could affect the budget or cost for which government must spend for the completion of the project. Overpricing should however be proven to have been committed with deliberate corrupt ways before one can be indicted for violation of R.A. No. 3019,” it said.
“In this case, the Special Audit Report of the COA found that there was no overpricing in the portion of the contract awarded to Legaspi,” it added.
Also, the SC said that the construction of the Seaside Drive Extension, even without presidential approval, cannot be used as basis in holding the petitioners liable for graft without proof of bad faith or gross inexcusable negligence.
It noted that the Seaside Drive Extension was constructed at a portion of the PDMB in order to have a road that will connect it to the Roxas Boulevard and serve as a link to the other roads going to and from the PDMB.
“With a legal basis for which the actions taken by petitioners were anchored, it cannot be said that their actions were coupled with a clear inclination to favor another or that a conscious wrongdoing, ill-will or dishonest purpose was being committed,” it pointed out.
In reversing the Sandiganbayan, the SC said:
“While the variation orders performed by Legaspi may have been done in advance, this does not deprive him, moreso, make him liable for payment of the cost of the project, especially that the public is now reaping the benefits of the said road construction.
“The principle of quantum meruit thus applies, and as the COA found no irregularity in the amount paid to him by the government, such amount should no longer be returned. Moreover, the contract price adjustment in the amount of P42,418,493.64 was considered reasonable by the COA.
“Here, there was no undue injury to the government or any party, or any unwarranted benefit that was proven by the prosecution. The government cannot be said to have suffered an actual loss since there was no showing that it had to perform acts prejudicial to its interest that wouldpertain to the loan obtained by PEA, or to the construction of the President Diosdado Macapagal Boulevard.
“To the contrary, the timely completion of the project resulted into a benefit in favor of the government with the increase in value of the land surrounding the area, as well as the public who continue to reap the benefits of having alternate routes that would let them avoid traffic congestion.
“Likewise, no circumstance was shown to favor JD Legaspi in the award of the main contract and the variation orders that would amount to an unwarranted benefit in his favor. It is undeniable that the contract for the main project underwent the necessary procurement procedure. As to the award of the Seaside Drive Extension, the same was brought about by the honest belief of petitioners that it fell within the parameters of a negotiated contract.
“Under the rules on negotiated contract, a project may be awarded to the same contractor who was awarded with the ongoing project.
“Considering that JD Legaspi was awarded with the main contract, there is nothing irregular for the petitioners, believing in good faith as to the applicability of the rules on negotiated contracts, to award the Seaside Drive Extension to JD Legaspi. Thus, there was no unwarranted benefit that favored JD Legaspi in the award of the Seaside Drive Extension.
“With the foregoing, the civil liability imposed by the Sandiganbayan upon the petitioners should be deleted.
“Accordingly, the consolidated Petitions are granted. The Decision dated Feb. 5, 2015 and the Joint Resolution dated Sept. 16, 2015 rendered by the Sandiganbayan are reversed and set aside.
“Petitioners Cristina Amposta-Mortel, Theron Victor Lacson, Leo Padilla, Manuel Berifia, Jr., Jaime Millan, Bernardo Viray, Raphael Pocholo Zorilla, Daniel Dayan, Frisco Francisco San Juan, Elpidio Damaso, Carmelita D. Chan, and Jesusito Legaspi are acquitted of violation of Republic Act No. 3019 on the ground of reasonable doubt. The civil liability imposed by the Sandiganbayan is hereby deleted. Let an entry of judgment be issued immediately.”