5% kickback in MRT-3 ‘confirmed in email’

The five-percent kickback in the P3.7-billion purchase of commuter trains in 2013 is confirmed. The Filipino reps of the Chinese supplier talked about it by text and email. That is the basis of MRT-3 ex-general manager Al Vitangcol in charging transport officials last week with graft.

Accused before the Ombudsman are former secretary Joseph Abaya, undersecretaries Jose Perpetuo Lotilla, Rene Limcaoco, Julianito Bucayan Jr., and Catherine Jennifer Gonzales, and present MRT-3 general manager Roman Buenafe.

Vitangcol charged them last Thursday, June 29, their last full day in office in the Aquino admin. In so doing, he ensured the Ombudsman’s jurisdiction over them as public officers. Lotilla had resigned before the May 2016 election to run for a congressional seat, but lost. Buenafe is one of thousands of holdovers whom President Rody Duterte extended till end-July.

Also named in the complaint are Antonio de Mesa, Philippine agent of Dalian Locomotive and Rolling Stock Corp., and broker Eugene Rapanut, a long-time supplier at the transportation department.

On May 17, 2013, de Mesa texted Rapanut that three percent will be given to the latter’s inside contacts, Vitangcol alleges. One percent was to go to the Bids and Awards Committee (BAC), chaired by Lotilla, with Limcaoco and Bucayan as members and Gonzales as secretariat head. De Mesa told Rapanut to “take care of the others who help, along with some officials in the DOTC’s circle.”

The next day Rapanut confirmed to de Mesa by email: “In the event of a successful bid, Dalian has committed to give 5%.” Two percent of that was to go to higher “DOTC officials,” meaning Abaya, Vitangcol swears. (Vitangcol expounded on his complaint in an interview last Saturday in my weekly radio show “Sapol”.)

The originating email address was [email protected], sent to [email protected]. Vitangcol got copies of the text and email from DOTC insiders. A computer forensics expert and lawyer, he says the Ombudsman must validate the email with Yahoo, which keeps records up to five years.

The de Mesa-Rapanut exchange came in the midst of preparations for the DOTC bidding for 48 additional MRT-3 coaches. On Feb. 22, 2013, Gonzales had published the Invitation to Bid for the supply.

Bidding was held on June 11, 2013. Dalian’s only rival was another Chinese state firm, which the BAC disqualified on a minor technicality. Dalian’s price offer won: P3,759,382,400.

The two percent to “DOTC officials” was P75,187,648. The one percent to the BAC was P37,593,824. Vitangcol assumes that de Mesa and Rapanut reserved the last two percent for yet others involved.

On Jan. 9, 2014, de Mesa received a Notice of Award from Lotilla, approved by Abaya. On Jan. 24. 2014, Lotilla signed the contract for the DOTC, with Min Xing, Li Depu, and de Mesa for Dalian. Abaya issued a Notice to Proceed on Feb. 21, 2014.

The Terms of Reference (TOR) called for 48 new light rail vehicles (LRVs) with On-Board Communications (radio, public address, intercom); On-Board ATP (Automatic Train Protector); and one unit Train Simulator. Delivery of the prototype shall be 18 months from issuance of the Notice to Proceed, or Aug. 25, 2015. Then, the 48 coaches shall be delivered within 17 months from acceptance of the prototype, at three units per month.

Buenafe was impleaded for ignoring the TOR as basis for contract fulfillment. The prototype, defined as a fully functional sample or model, had no traction motors, as exposed in this column in Sept. 2015. Abaya publicly acknowledged the major defect of the prototype, Buenafe nonetheless accepted it.

Thereafter only six coaches have been delivered as of June 2016. None had the Communications and ATP that should be connected to the main signaling. All were untested for 5,000 km at various speeds, curves, and slopes at the Dalian factory. No Simulator has been delivered to train MRT-3 engineers to operate the coaches. Buenafe has announced the fielding of three of the coaches.

The Anti-Graft and Corrupt Practices Act (R.A. 3019) was violated. The law forbids officials “to request or receive any gift, present, share, percentage, or benefit for himself or others in connection with a government contract or transaction.” It also penalizes the “cause of any undue injury to the government, or giving any party any unwarranted benefits, advantage or preference ... through manifest partiality, evident bad faith, or gross inexcusable negligence.”

The Code of Conduct for Public Officials (R.A. 6713) also was broken. It forbids “solicitation or acceptance ... directly or indirectly, (of) any gift, gratuity, favor, entertainment, loan, or anything of monetary value ... in the course of their official duties or in connection with any operation being regulated ... or any transaction which may be affected by the functions of their office.”

Vitangcol cites two official documents as further proof of the anomaly. One is a sworn affidavit of then-Czech ambassador Josef Rychtar filed with the Ombudsman as far back as 2013. In it the envoy revealed how the train procurement was manipulated for a favored bidder after Inekon Corp., the Czech maker of MRT-3’s original 73 coaches, was edged out of contention in 2013.

The other was the 45-page report of Sen. Grace Poe’s five hearings on the scam in 2014. She recommended indictment of DOTC officials, describing the award to Dalian as “very suspicious.” The officials were waiting for a “friendly party” to come along, she concluded.

Vitangcol’s co-complainant is Leon E. Peralta, founder of the Liga ng Eksplosibong Pagbabago, “a Duterte-inspired NGO.”

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