Abaya, 10 others sued by DOTr over MRT deal

MANILA, Philippines — Former transportation secretary Joseph Emilio Abaya and 10 others are facing graft charges in connection with an allegedly anomalous P3.8-billion contract for the maintenance of the Metro Rail Transit Line 3 (MRT-3).

In a 29-page complaint filed before the Office of the Ombudsman yesterday, the Department of Transportation (DOTr), represented by Undersecretary for legal affairs and procurement Reinier Paul Yebra, charged Abaya along with 10 former transportation officials and 10 incorporators of Busan Universal Rail Inc. (BURI) for violating Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

The DOTr alleged that Abaya and the other officials conspired in awarding the maintenance deal to BURI on Dec. 23, 2015 despite the company’s failure to present a joint venture agreement (JVA) executed between parties in violation of the provisions of Republic Act 9184, the Government Procurement Reform Act.

The complainant said that instead of requiring the firm to submit the JVA, then Department of Transportation and Communications assistant secretary and Bids and Awards Committee (BAC) head Camille Alcaraz wrote to the Securities and Exchange Commission on the same day the contract was awarded to BURI, requesting the SEC to facilitate the registration of a special purpose corporation consisting of the members of Busan for the implementation of the contract.

Based on the DOTr’s records, BURI was incorporated on Jan. 4, 2016 consisting of five companies: Tramat Mercantile Inc., TMI Corp. Inc., Edison Development and Construction, Castan Corp. and Busan Corp.

Among the five companies, Busan held the smallest share or only 4.7 percent of the total shares of stocks of BURI.

“At the time of the signing of the contract, there was no JVA as required by law and yet the respondents insisted on and entered into a deal that is being implemented by a totally different entity,” the complaint read.

The DOTr said BURI also lacked at least 15 years of continuous experience to qualify as a railway maintenance service provider.

The complaint said BURI’s failure to carry out the project was apparent with the frequent MRT-3 service interruptions due to technical glitches supposedly caused by poor maintenance.

The three-year contract, which ends in January 2019, includes maintenance of MRT-3 systems, general overhaul of 43 light rail vehicles, total replacement of the signaling system and additional maintenance works.

In its complaint, the DOTr cited a Commission on Audit report showing that for the entire 2016, a total of 649 service interruptions and passenger unloading incidents occurred at MRT-3 “caused by rolling stocks failure, broken tracks and rails, system failure or other causes.”

The DOTr noted that from January to July this year, there were 284 recorded service interruptions and passenger unloading mainly due to “failure in the automatic train protection brake, train door failure, mechanical brake failure and, in several instances, smoke emission and burnt smell/spark.”

These were on top of seven incidents of train derailments that occurred from April to October, raising “a major concern on the safety of the MRT-3.”

“These technical glitches and failures were preventable defects and not design defects. Failure of these items could have been averred had they been properly maintained,” the complaint read.

The DOTr said BURI’s poor maintenance of the MRT-3 had caused the government undue injury in the amount of P921.208 million, equivalent to the net payment received by BURI to date.

Aside from Abaya and Alcaraz, named respondents were former undersecretary for operations Edwin Lopez, former undersecretary for planning and head of negotiating team Rene Limcaoco, former undersecretary for procurement and administration and vice head of the negotiating team Catherine Jennifer Gonzales, former MRT-3 general manager Roman Buenafe, former assistant secretary and BAC vice chair Ofelia Astrera and BAC members Charissa Eloisa Opulencia, Oscar Bongon, Jose Rodante Sabayle and Maria Cecilia Natividad.

Also charged were BURI incorporators Eldon Ferdinand Uy, Elizabeth Velasco, Chae-Gue Shim, Antonio Borromeo, Jun Ho Hwang, Elpidio Silvestre Uy, William de la Cruz and Eugene Rapanut.

Last week, the government notified BURI that it would terminate the firm’s contract due to service interruptions in the railway system.