Must-do list

Fresh developments in July afford the  Department of Transportation and Communications (DOTC) and its attached agencies a chance to sort out the current mess in our train system.

DOTC executives led by Secretary Joseph Abaya and Light Rail Transit Authority (LRTA) administrator Honorito Chaneco, who is concurrent MRT3 OIC,  stil have time to weed out unqualified contractor-bidders and review not only the performance of the train lines’ current maintenance service providers, but also its original commitments to MRT Corp. (MRTC), which runs the MRT3 rail system.

It would also give time to Abaya and Chaneco to conduct a long-sought technical audit of the accident-prone MRT3, either by an independent third-party expert or jointly by DOTC/LRTA and its estranged partner MRTC.

LRTA spokesperson Hernando Cabrera announced last week the deadline extension for the submission of bids for the maintenance contracts of LRT1 and 2  and MRT3, to give more time for the bidders to submit their offers.

The deadline for the submission of bids for the three-year P1.33-billion M&O contract for LRT2 has been moved back from July 16 to Aug. 22, while that for the one-year LRT1 P423.2-million M&O contract has been postponed from Aug. 13 to Sept. 12.

The postponement of the two auctions came on the heels of the Supreme Court’s decision to declare as “unconstitutional” four components of the Disbursement Acceleration Program (DAP), which had ostensibly cleared the way for Malacañang to fund assorted programs since 2011, including the P4.5-billion MRT3 Capacity Expansion Project.

But Abaya only exacerbated the DAP-triggered controversy and public confusion in claiming days later that the DOTC awarded the P4.5-billion capacity expansion contract to lone bidder Dalian Locomotive & Rolling Stock Co.  in April for the supply of 48 MRT3 light rail vehicles (LRVs) on the basis of a P4.5-billion allocation in the 2014 General Appropriations Act (GAA) or national budget and not via DAP.

The announced postponement of the auctions for the LRT 1 and 2 maintenance contracts has become interesting because of the participation of parties believed to be responsible for the worsening system glitches and accidents at MRT3, and have in fact been the subject of parallel investigations by the Office of the Ombudsman and the National Bureau of Investigation (NBI) in connection with the $30-million extortion charge by Czech Ambassador Josef Rychtar and Inekon Corp. boss Josef Husek, and the allegedly fraudulent award of this train line’s interim M&O contracts over the past two years.

With the number of MRT3 passengers increasing by the day beyond the system’s capacity, it is imperative for government to do a technical audit ahead of the capacity expansion program and be more stringent in choosing M&O operators, in light of the glitches and accidents that have been happening with increasing frequency ever since  Philippine Trams Rail Management & Services (PH Trams) and, later, Autre Porte Technique Global Inc. (APT Global) took over as interim contractors two years ago.

In one of two letters to President Aquino last April,  MRTC directors Rafael de Tagle Jr. and Rogelio Bondoc Jr. sought Malacañang’s assistance for a technical audit of MRT3 to ensure the safety of the riding public.

The eight companies that have expressed interest in bidding for the P1.3-billion LRT2 maintenance contract are Marubeni Corp. of Japan, DM Consunji Inc., Telefonika Inc., Global Epcom Services Inc., Busan Transportation Corp. of Korea, the tandem of Multi-Scan Corp. and Hyundai Rotem Corp. of Korea, Comm Builders & Technology Phils. Corp. (CB&T), and APT Global.

APT Global and Telefonika make up the four-member consortium (along with STIV and Pacific) that is LRT2’s current maintenance service provider.

APT Global took over the EDSA rail system’s M&O contract last year from the PH Trams-CB&T consortium, which, in turn, won the contract under highly irregular circumstances following the DOTC’s 2012 decision to dump longtime MRT3 maintenance operator TES-P of Sumitomo Corp. of Japan (TES-P/Sumitomo).

Observers suggest that Chaneco as MRT3 OIC should review the performance of APT Global as interim maintenance service provider before its contract expires in August, if not cancel this contract at once, amid questions surrounding its award and this firm’s ties to its predecessor PH Trams.

The DOTC/LRTA, or better yet the MRTC, should properly bid out the MRT3 contract this time around to avoid a repeat of the irregularities that mired the award of interim contracts to the consortium of PH Trams-CB&T in 2012 and to APT Global in 2013 — and that eventually led to Vitangcol’s unceremonious exit as MRT3 general manager.

Others are of the opinion that Abaya and Chaneco have to cancel APT Global’s about-to-expire contract and take legal action against its officers and those of PH Trams, to put a stop to the recurring glitches and accidents, and avoid both DOTC officials’ possible criminal prosecution for the highly anomalous award of the two contracts to PH Trams-CB&T and APT Global as successive interim maintenance providers.

Both contracts are said to be void from the beginning for being manifestly and grossly disadvantageous to government and for giving undue and unwarranted benefits to the two favored contractors in violation of the Anti-Graft and Corrupt Practices Act, and for usurping MRTC’s authority as the private operator of this EDSA train system, as so provided in the firm’s BLT agreement with the government.

The  1999 BLT deal requires the review and prior approval or consent by MRTC for any such MRT3-related contract entered into by the government with any other private party.

In both instances, the DOTC did not submit the Terms of Reference (TOR) of the M&O contracts to MRTC before signing them with PH Trams-CB&T and APT Global, as so provided in their 1999 BLT accord.

Before they could even think about extending APT Global’s M&O contract when it expires this August—in the same way that PH Trams-CB&T’s contract was extended twice after its original six-month contract ended in February 2013—or of awarding to it the LRT1 and/or LRT2 contracts, Abaya and Chaneco must first explain speculations that the same Soriano-Dela Cruz-De Vera troika was the true beneficiary of APT Global’s contract on the basis of Dela Cruz’s connection to both consortiums.

Come to think of it, the DOTC and LRTA wouldn’t have to go through all these legal and financial troubles at MRT3 if these agencies had only upheld the government’s BLT with MRTC and approved its November 2011 proposal to take over the train line (instead of toying around with its grandiose EVBO proposal that has been having great difficulty getting off the ground).

In fact, MRTC is in an even better financial state at this point to take over MRT3, as proven by PhilRating’s week-ago credit upgrade for this private firm’s securitized debt notes covering the government’s payment of future ERPs to this operator.

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