COA trims, upholds Meralco claim over Makati hospital power restoration

MANILA, Philippines – Meralco Energy Incorporated (MEI) has secured approval from the Commission on Audit en banc for its payment claim against the Makati City government over expenses incurred in restoring power at the Ospital ng Makati (OsMak) after a 2016 fire, including the installation of feeder wires and related materials.

Meralco deserves to be compensated, the state auditors ruled in a 10-page en banc decision, after finding that Makati City did not dispute the delivery and installation of new feeder wires that permanently restored power supply to the hospital following the fire. The COA noted that Makati City admitted no payment had been made despite full completion and delivery of the works.

The fire in March 2016 that hit the main building of OsMak caused damage and cut off its power supply, effectively paralyzing hospital operations.

MEI installed a temporary electrical connection to restore electricity at the request of OsMak,  but the setup was not sufficient for continuous operations, leading to the need for a permanent restoration through new feeder wires.

MEI said its team was issued a work permit on July 21, 2016 and immediately restored the hospital’s power supply, but its invoices remained unpaid by the city government despite completion of the work.

On September 23, 2019, MEI was notified by the city government that its claim was denied due to the absence of a contractual relationship and non-compliance with the Government Procurement Reform Act, and its Implementing Rules and Regulations, and was instead directed to file a claim before the COA.

Meralco acknowledged that no formal contract existed between it and OsMak, but maintained that the installation and reconnection works were completed and benefited the hospital and the public.

Responding, the city government said the claim should be denied for failure to comply with law on public bidding. It also said the supply and installation of new feeder wires lacked proper documentation, including an acceptance report or certification from the end user.

The COA en banc, in granting the petition, noted that the city itself admitted MEI had restored the hospital’s power supply.

“It is undisputed that the new feeder wires were delivered and installed since the power supply of OsMak was permanently restored by MEI. The city admitted the allegation of MEI that no payment has been made despite complete delivery and also acknowledged supply and installation of permanent feeder wires,” read part of the COA ruling.

However, the COA ruled that it could not grant the full P9.757 million as it included legal interest without legal basis. The amount was instead reduced to P7.819 million, subject to mandatory deductions and standard accounting rules. – Rappler.com