China railways are best? Not in Philippine experience

The Philippines’ only two railway contracts with China were flops. One, the 32-km Manila-Clark Field commuter line, never got past design stage. Still Filipinos fully paid China $630 million (P31.5 billion) for inexistent trains and tracks. The other, 48 light rail vehicles for MRT-3, are uncertified for safety, reliability, or conformity. Nine of those are being used – at grave risk to lives and limbs – only because MRT-3 direly lacks coaches for 350,000 daily riders.

Yet Usec. for Railways Timothy John Batan extols China as best rail supplier for the Philippines. “We know that our needed capability, experience, and expertise, China has and will be able to provide,” he toots. The country’s top rail official seems unaware of the Northrail and Dalian train failures. He’s excluding other countries from the 639-km Manila-Bicol long haul, the Subic-Clark run, and the 102-km Mindanao circumferential railway. One can only be afraid, be very afraid.

This is not to say China’s rail industry is backward. Fast trains connect its hundreds of cities. Light and heavy tracks are being laid down at dizzying rates of tens of kilometers a day. Sleek coaches roll up to Tibet, and zip from Beijing to Shanghai in under seven hours. About 6,300 cargo runs were made through Central Asia in 2018 alone. (My countless rides in China are comparable to those in Europe and Japan.)

But in train exports China derails too often. Singapore, Malaysia, Pakistan, and Hong Kong have had to return defective LRVs, and New Zealand and Australia hazardous locomotives. Quality control to other lands is fuzzy.

MRT-3’s P3.8-billion coaches from Dalian Locomotive and Rolling Stock Corp. are all wrong. Each of the 48 is 3.3 tons overweight, so will ruin the tracks. The chassis is short, so unfit for the existing P200-million maintenance depot hoist. Dalian broke the contract specs and terms of reference. Ninety-four parts and components – auto-doors, bogey wheels, brakes, etc. – were untested for safety, so officially remain unaccepted. DOTr’s $1-million auditor TUV Rheinland reportedly found the coaches unfit. Yet they anomalously are being used in daily MRT-3 runs. Maintenance techs must beware of inhaling deadly asbestos dust, like in Dalian trains delivered to New Zealand. Tip: check the friction brake pads and soundproofing panels. (See https://www.philstar.com/opinion/2019/01/14/1884817/were-dalian-trains-checked-deadly-asbestos-fibers)

DOTr is trying hard to keep – and pay for – Dalian’s faulty LRVs. Insiders say it has to do with China loans and companies for the Manila-Bicol, Subic-Clark, and Digos-Davao-Tagum rails. The borrowing binge is odd, since government has money for those works. There already was initial P6.5 billion in the 2018 national budget for rights of way and engineering startups of the P35-billion Mindanao rail. Yet DOTr downgraded the design to suit China’s desired loan amount.

Sumitomo, which DOTr is to hire soon to rehab MRT-3, wants nothing to do with the flawed Dalian trains. Talk is that, once Sumitomo starts, the 48 Chinese junks will be moved to the LRT-1. Good luck with the legal and technical justifications, plus safety and interoperability.               

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The fight over Iloilo’s electricity is heating up. Home and office consumers face power outages this sizzling summer. Booming tourism and call centers will be busted. Can a solution amicably be struck up?

Panay Electric Co. (PECO) refuses to give up its expired franchise. Congress’ new licensee More Electric and Power (MORE) is offering to buy its assets for P482 million to stand down. Saying it’s worth five times that, PECO sought from a Mandaluyong City court a temporary stay of Republic Act 11212. Since that law makes MORE the new franchisee, it got the Court of Appeals provisionally to restrain the lower court.

Consumers are caught in the stalemate. Worried groups ask the Energy Regulatory Commission for protection. PECO swears never to give up its 95-year-long Iloilo power business. MORE vows to not do anything rash.

MORE is in a hurry, though, to fulfill franchise commitments. It immediately must correct PECO’s poor services, overcharging, frequent blackouts, expensive rates, old and unsafe facilities and practices, and other service deficiencies. For P1.3 billion, it will rehab high-tension wires, install new connections to peripheries, replace dilapidated substations and electric posts, replace mechanical with electronic meters, and fix sagging cables and the billing database. Already it has talked to three power generators to supply it with cheaper electricity. Upon takeover, MORE can at once reduce electricity charges by P1.21 per kilowatt-hour from the present P7.84, among the country’s highest.

Something’s gotta give. During the appellate court’s 60-day injunction, the contenders must sit down and negotiate. They need to settle the amounts. PECO wants full recompense for all the facilities and parts it put in from the start. MORE disagrees, saying Iloilo consumers already have repaid PECO’s capital expenditures through their monthly billings. PECO cannot double-book. The Electric Power Industry Reform Act of 2002 states that “the costs for the acquisition, construction, and establishment of the power distribution system were allowed to be recovered through the retail rate approved by the ERC.” The ERC-approved retail rate “covers the full recovery of the costs/funds used to acquire, construct, and establish these power distribution system assets.”

Perhaps local and national business and government leaders can mediate. More than 65,000 residential and commercial customers depend on it.

The alternative can be harsh. In granting MORE’s franchise, Congress had delegated to it government’s power of eminent domain. Electricity being a basic necessity, MORE can expropriate PECO’s facilities and start its new operations. A court will thence determine the just compensation. MORE already had computed that as the P482 million it is offering. MORE in fact has filed expropriation proceedings with the Iloilo City court.

Any more delays can invite drastic actions. The power struggle of PECO vs MORE cannot be let to disrupt economic and political activities, including the midterm election in May. That would make it PECO vs Government. Other branches and agencies might step in. MORE’s franchise is unprecedented. Usually such grants merely lapse into law. This one was signed by the President no less.

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