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MRT mess: Abaya cleared, Vitangcol to face raps

Transportation Secretary Joseph Emilio Abaya

MANILA, Philippines - With the Metro Rail Transit 3 breaking down regularly due to various glitches, the Office of the Ombudsman ordered yesterday the indictment for graft of former MRT 3 general manager Al Vitangcol III and five incorporators of the company that won a multimillion-dollar contract to maintain the rail service.

Those who will face trial before the Sandiganbayan are Vitangcol’s uncle-in-law Arturo Soriano, currently the provincial accountant of Pangasinan; Wilson de Vera, who ran for mayor under the Liberal Party in Calasiao, also in Pangasinan; Marlo de la Cruz, reportedly an LP campaign supporter in Manaoag, Pangasinan; Manolo Maralit and Federico Remo.

The five are incorporators of the Philippine Trans Rail Management and Services Corp. (PH Trams), which bagged the MRT 3 interim maintenance deal worth $1.15 million a month without public bidding on Oct. 20, 2012 when Vitangcol headed the agency. The contract was renewed three times until Sept. 4, 2013.

Transportation Secretary Joseph Emilio Abaya, who signed the controversial maintenance contract, was cleared by the Office of the Ombudsman, which noted that he had not yet taken over the Department of Transportation and Communications (DOTC) when the contract was signed.

It was not immediately clear why Abaya was cleared. He took over the DOTC, which has jurisdiction over the MRT, on Oct. 18, 2012, two days before the contract was awarded.

Also not clear was why the indictment was for graft instead of plunder, a non-bailable offense recommended for amounts involving P50 million or higher.

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Abaya, acting president of the LP, earlier claimed he was not aware of irregularities in the contract, saying he merely relied on the recommendations of the MRT Bids and Awards Committee (BAC).

Ombudsman Conchita Morales found probable cause to indict the six men on charges of conspiring to award the irregular contract, in violation of the Anti-Graft and Corrupt Practices Act or Republic Act 3019 and the Government Procurement Reform Act or RA 9184.

The ombudsman’s resolution, released yesterday, stated that Vitangcol used his power and authority, as the MRT’s general manager, chief end-user, head of the negotiating team and BAC member all rolled into one, “to dictate the proponents invited for the preliminary negotiations” of the maintenance services, and “intentionally hid his (affinitive) relationship with Soriano, which would have automatically disqualified PH Trams.”

BAC chairman Jose Perpetuo Lotilla had admitted before a congressional inquiry that PH Trams was incorporated only in August 2012, two months before the award of the maintenance contract, with a paid-up capital of only P625,000.

Lotilla also admitted that PH Trams, by itself, would not have qualified for the P517-million job, and it was CB&T that had the finances and technical capability.

There is no word on a separate investigation conducted by the Department of Justice on allegations made by former Czech Ambassador Josef Rychtar and private investors that a group linked to Vitangcol had tried to extort $30 million from Czech railway firm Inekon in exchange for a contract to supply MRT trains. DOJ officials said the report of the National Bureau of Investigation was forwarded to Malacañang last year.

Inekon was trying to negotiate a government-to-government deal for the supply contract. De la Cruz and De Vera were reportedly present during the alleged extortion attempt at the official residence of the Czech ambassador in Forbes Park, Makati in July 2012, when the DOTC was headed by Manuel Roxas II. Rychtar reportedly told the group that Czech firms are prohibited from engaging in bribery to win deals.

Vitangcol has denied the extortion attempt. Roxas had recruited Vitangcol, his former Senate aide, to the MRT. The mother of Vitangcol’s wife is the sister of Arturo Soriano.

False affidavit, no divestment

The ombudsman’s resolution stated that PH Trams’ incorporators were liable for executing a false Affidavit of Disclosure dated Aug. 12, 2012, stating that none of the incorporators were related by affinity with any member of the procurement teams.

Soriano claimed that he divested his shares in PH Trams on Sept. 10, 2012, or a month before the deal was awarded. But ombudsman probers found that no waiver was recorded in the Securities and Exchange Commission. It was also contrary to Soriano’s Statement of Assets, Liabilities and Net Worth, in which he declared that he obtained an interest as a stockholder of PH Trams in November 2012.

In December 1997, the MRT Corp. (MRTC) and Japan’s Sumitomo Corp. signed a maintenance contract for the safe and proper operation of the MRT trains, including the provision of labor and supervision. The agreement expired on June 21, 2010 but was extended four times, up to October 2012.

Fifteen days prior to the expiration of the last extension, the BAC adopted a resolution to undertake the procurement of an interim maintenance provider for six months and negotiate its terms and conditions. The negotiating team recommended that the project be awarded to PH Trams-CB&T joint venture for $1.15 million a month. On Oct. 20, 2012, the project was awarded to PH Trams-CB&T.

Section 3(e) of RA No. 3019 prohibits public officials from causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.

Section 3(h) prohibits a public official from directly or indirectly having financial or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest.

Meanwhile, Section 65(c)(1) of RA 9184 punishes the act of “submitting eligibility requirements of whatever kind and nature that contain false information or falsified documents calculated to influence the outcome of the eligibility screening process or conceal such information in the eligibility requirements when the information will lead to a declaration of ineligibility from participating in public bidding.”

De Vera, who allegedly acted as a middleman for Vitangcol in the deal, said he was surprised by the ombudsman’s report and would consult his lawyers.

Vitangcol was not immediately available for comment yesterday. He was forced to resign after reports came out about his family links to Soriano.

STAR columnist Jarius Bondoc, in a series of articles in the newspaper, had exposed the alleged irregularities in the MRT deal, prompting a congressional investigation.

Abaya, citing Bondoc’s columns in The STAR, decided to replace Vitangcol after learning of the family ties. Abaya said members of the DOTC’s bidding committee told him that they were not informed of the family links.

Lotilla said he and other BAC members also learned of the relationship of Vitangcol with Soriano only from the newspapers.

The DOTC, meanwhile, yesterday welcomed the ombudsman’s decision.

Michael Sagcal, DOTC spokesman, said in a text message the agency would continue to cooperate with authorities on any investigation pertaining to transport projects.

“The DOTC respects the rule of law, and has fully cooperated with the processes of the ombudsman throughout the investigation. We will  continue to be transparent and help shed light on the truth, as we also pursue the rehabilitation and improvement projects for the good of MRT-3 passengers,” he added. – With Lawrence Agcaoili, Eva Visperas

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