THE COMMISSION on Audit (CoA) has flagged the Cagayan Economic Zone Authority (CEZA) for failing to fully utilize almost P598 million worth of infrastructure projects that were completed last year.
“The infrastructure projects completed in calendar year 2022 costing P597.92 million were idle/underutilized and only generated minimal revenue,” its 2022 audit report made available on June 9, 2023 noted.
The projects include the CEZA Commercial Center, which was completed in January 2022, and several warehouses and warehouse offices.
The CEZA management explained to CoA that it recently awarded a contract of lease for the third floor of the commercial center, while the first and second floors will be leased by another locator within the year. CEZA added that eight of its warehouse units are undergoing repair.
CoA also said that P199.6 million worth of master plans and feasibility studies “have not been used and taken advantage of by CEZA as of Dec. 31, 2022.”
“The audit team also observed that other projects that are not even part of these feasibility studies were prioritized by management,” it said.
In response, the CEZA Planning Division said it is “actively pursuing” the proposed projects through public-private partnerships.
PORT COLLECTION
State auditors also called on CEZA to intensify and improve its port collections system after finding that P8.53 million worth of receivables from various port users and service providers remain uncollected as of Dec. 31 last year.
The management committed to collect the said port fees and charges.
State auditors also found that P10 million worth of investment with the Northeastern Luzon Pacific Coastal Service, Inc. (NLPCSI) has been dormant for 17 years.
The NLPCSI was created in 2004 under the Strong Republic Nautical Highway flagship program. It was jointly organized by CEZA and the provinces of Cagayan, Isabela, and Aurora in Luzon.
“It is only in calendar year 2021 that CEZA recognized its 25% share in the net income of NLPCSI which mainly consists of interest from bank deposits. In contrast, the P10-million investments would have been more profitable had it been invested in higher interest-earning deposits with an authorized government depository bank,” CoA said.
The management is seeking approval for the dissolution of the NLPCSI from its board of directors and the local government units involved.
CEZA’s balance of audit disallowances amounting to P3.23 million remains unsettled as of Dec. 31, 2022, CoA said. — Beatriz Marie D. Cruz