THE Commission on Audit has expressed concern over certain provisions in Quezon City’s deal with the QPAX Traffic Systems Inc. that places the city government at a disadvantage, particularly Section 9.4 which gives full control over the joint bank account to the other party.
The city entered into a JVA with QPAX on January 28, 2021 for the implementation of the “No Contact Apprehension Program (NCAP),” which is being eyed to reduce traffic congestion and make the city’s major roads safer for both motorists and pedestrians.
However, the audit team flagged several provisions of the JVA for being unfair to QC in terms of obligations imposed on the city government, access to the QPAX system, and share of revenues.
The COA said the City Legal Department (CLD) should “re-evaluate certain provisions of the JVA (joint venture agreement) that are disadvantageous on the part of the city.”
Under Section 9.4 of the agreement, both parties are required to open a joint account “with a reputable universal or commercial bank” which will hold all the revenues accruing to the joint venture.
It adds that the account shall be administered by the QPAX Project Manager.
Auditors said this is unfavorable to the interest of the city.
“The QPAX Project Manager is the administrator of the account and the authorized personnel to transfer the QPAX and City shares in their respective bank accounts, which could be disadvantageous on the part of the City having no control over the joint bank account,” they pointed out.
Under the 2013 Revised NEDA Guidelines, a special bank account involving a government entity must be under the dual control of both parties.
The audit team also warned that putting the revenues in a universal or commercial bank would run afoul with the Department of Finance Order No. 32-03, which requires government funds to be deposited only in Authorized Government Depositary Banks (AGDBs).
The QC government also agreed to be liable to penalties of P25,000 “for every instance of delay or failure to remit the fines per agreed schedule” and to pay QPAX P25,000 “for every instance of default” under Section 22.3(c) of the agreement.
“The penalty imposed against the City on every instance that the City incurs delays in the scheduled remittance of revenues collected to the designated JVA is disadvantageous on the part of the City,” the audit team pointed out.
It noted that it is the QPAX project manager, not the city, who has the power to authorize the transfer of funds corresponding to the shares of both parties “on the first business day of the month following remittance of funds to the JV account.”
However, in the event that the QPAX should incur delays in transferring the city’s share, there is no penalty imposed on it under the same agreement.
The COA also balked at the requirement that the city government has to pay P25,000 as an “access fee” every time it has to access the QPAX system although it noted that the purpose for such a fee is vaguely defined in the agreement.
Auditors pointed out that to process NCAP violations, authorized city personnel have to access the QPAX system.
“…A fixed charge of P25,000 per month will be disadvantageous on the part of the City in case of low violation collection turnout. This will be an added cost on the part of the City being deducted every month,” they said.
Aside from objecting to certain provisions in the JVA, the audit team highlighted the fact that the penalties imposed by the NCAP are too onerous or expensive compared to fees set by the Land Transportation Office (LTO) for similar offenses.
For instance, the LTO imposes a P1,000 fine for “disobedience to traffic control signals and signs” while under NCAP a motorist has to pay P2,000 for the first offense, P3,000 on the second, and P4,000 on the third.
For out-of-route public utility vehicles (PUV) the LTO collects a uniform P,1000 for each offense but the NCAP charges more than double at P2,500.
Overcharging of Fares is fined P1,000 by the LTO for each infraction. Under the NCAP, this will go up to P5,000.
The City Legal Department clarified that fees and penalties imposed were based on the Local Ordinances created by the Sangguniang Panlungsod as the City’s legislative body.
The city management assured auditors that it is working with the LTO and the Metropolitan Manila Development Authority (MMDA) to harmonize the fines and penalties to be uniform to the rates being imposed by the LTO and MMDA.
