OFFICIALS of the Department of Transportation and Communications are facing graft charges before the Office of the Ombudsman over the P3.8-billion maintenance contract for the Metro Rail Transit 3.
Named respondents were Undersecretary for Planning Rene Limcaoco; Undersecretary for Administration and Procurement Catherine Gonzales and general manager Roman Buenafe, who were all part of the government’s negotiation team, said Vito Gaspare Enrico Silo, secretary general of the Alliance for Consumerism and Transparection.
Also included as co-respondents were officers of the awarded joint venture group of Busan Transportation Corp., Edison Development and Construction Corp., Tramat Mercantile Inc., TMI Corp. and Castan Corp.
“We filed the case last week without any media hype so as not to preempt our actions,” Silo told The Standard.
The charges arose from alleged anomalous award of a P3.8 billion contract to maintain the train system for three years, and conduct a general overhaul of the rail line’s 43 trains and the total replacement of the line’s signaling systems to a joint venture group on Dec. 23, 2015.
In the group’s complaint, Silo said DoTC and MRT3 committed violations of the procurement law, which mandates a public bidding.
He said DoTC added scopes of work in the “emergency” negotiated procurement, particularly the general overhaul of the 43 trains and the replacement of the signaling systems, even though these were not included in the two failed public biddings.
The complaint said the inclusion of the additional scopes necessitated the increase of the appropriated budget from P2.25 billion in the first failed bidding and P2.39 billion in the second bidding.
The budget even rose to P4.25 billion when the negotiating team started procurement on Sept. 1, 2015.
“More importantly, the subject maintenance for the first two public biddings only covers [the] maintenance service provider. Thus, to justify further the negotiated procurement and the increase of the approved budget, the public respondents included in the maintenance service provider, the general overhauling of 43 units of train and total replacement of signaling,” the complaint read.
“This is highly irregular considering that the maintenance of the signaling system has already been awarded to Bombardier, a highly regarded OEM [original equipment manufacturer]. Therefore, the upgrading of signaling system should have been accomplished and to enter anew with another maintenance on the entire system is clearly not only anomalous resulting in the dissipation of government funds on the first phase of completed and systematic upgrading of signaling system undertaken by Bombardier, but also highly suspicious.”
The DoTC neither posted the negotiated procurement on their website, nor on the Government Electronic Procurement System (PhilGEPS), and worse, had merely distributed the information and copies of the 447-page manual on the negotiations to their selected invitees, the complainant said.
Action pointed out the DoTC negotiation team had only accepted one qualified bid or offer, that of the Busan-Edison-Tramat-TMI-Castan group, and had disqualified two other bids or offers from DM Consunji, Inc., and SBI-CB&T.
Action said the acceptance of the supposed Busan-led group was done despite information gathered by the negotiating team that Busan failed to meet the 15-year experience requirement they had set from bidders for the contract, since Busan Transportation Corp., was organized only in 2006.
“While Busan gave the excuse that they were a subsidiary of Busan Metro, a Korean government-owned and controlled corporation organized in 1986, Action said the DOTC did not verify this claim and check if Busan Metro and Busan Transportation had interlocking directors or corporate officers.”
Action also questioned the technical qualifications of the local partners, since Edison was in construction, Tramat Mercantile is in agricultural equipment supply, TMI is in trading, and Castan is in plumbing.
“It is clear therefore that the negotiating team of the DoTC-MRT3 hired financially and technically incompetent maintenance service providers.”
With a total budget for the contract set at P4.25 billion, the Filipino partners of Busan Transportation did not have a net worth equal to even just half of the contract budget of P2.126 billion, Action said.