EITHER former officials of the Department of Transportation (DOTr), then headed by ex-Secretary Joseph Emilio Abaya, failed to exercise due diligence in selecting a new maintenance provider for the Metro Rail Transit Line 3 (MRT-3), or the influence of a Liberal Party stalwart led them to make such decision.
This was raised during the hearing of the Senate public services committee on problems hounding the MRT-3 such as frequent train malfunctions and derailment.
Sen. Grace Poe, head of the committee, asked Abaya why transport officials awarded a P54-million per month maintenance contract to a two-month old company with a paid-up capital of only P625,000 in 2012.
Poe was referring to PH Trams, which was incorporated just two months before winning the bid to become the maintenance provider for the MRT-3 from October 20, 2012 to September 3, 2013. PH Trams was partnered with Comm Builders and Technology Corp. or CB&T.
PH Trams replaced Sumitomo, which was the maintenance provider of the MRT-3 from 2000 to 2010. Instead of renewing the contract of Sumitomo when it expired, transport officials decided to extend its contract for six-month periods until 2012.
‘Can’t even buy a Vios’
Poe pointed out that transport officials allowed a company that couldn’t even purchase a brand-new Toyota Vios sedan given its small paid-up capital to handle the MRT-3.
“Unlike Sumitomo, which had years of experience, PH Trams was only incorporated two months before it was awarded the MRT-3 maintenance contract,” she said.
When the MRT-3 replaced its maintenance provider, it began to experience frequent breakdowns.
Abaya said Japan’s Sumitomo backed away from the maintenance deal because the MRT-3 trains were obsolete and overloaded, but would continue if the government increased the payment to $2.2 million a month from $1.4 million, without bidding.
The former Cabinet official said Sumitomo also offered no guarantee for its service even with the increase in pay, prompting transport officials to look for new providers, which led them to PH Trams.
When asked if he was aware of PH Trams’ background, Abaya admitted that he signed the 2012 contract without knowing the “facts.”
Abaya however maintained his conscience was “clear” and that all transactions when he was Transport secretary were aboveboard.
“I was new then. Just imagine ma’am if I came there as a doubting Thomas, being careful that I won’t sign anything. MRT-3 would have stopped on October 19. No maintenance provider. Sumitomo would have packed its bags. That, I could not explain to our people,” Abaya told Poe.
The PH Trams-CB&T joint venture was replaced by Global APT up to 2014.
Poe also asked Abaya about a certain Marlo de la Cruz, a major figure in both PH Trams and Global APT.
She said her committee would look into the involvement of de la Cruz, who was chairman of PH Trams and later the authorized representative of Global APT.
The senator said she was intrigued on why experienced but not necessarily qualified companies wanted to be involved in a joint venture with de la Cruz on the MRT-3 repair and maintenance deal, given his apparent lack of experience and track record in railway maintenance.
De la Cruz was invited by the committee to attend the hearing but he did not show up.
De la Cruz, according to a source, is close to former Interior secretary Manuel Roxas 2nd, the defeated Liberal Party presidential candidate who served as transport chief before Abaya took over.
Also during the hearing, current maintenance provider Busan Universal Rail Inc. dismissed claims of supposed non-performance on its part particularly maintenance works on all 73 coaches and the overhaul of 43 coaches.
It was learned that no coaches have been turned over, delivered or accepted despite the agreement that 17 of 43 train coaches should have been initially overhauled.
Busan lawyer Charles Mercado told the senators the delay in overhauling was beyond the firm’s control as the parts needed for the train were not readily available.
He said Busan even informed the transport department about the rescheduling of the train overhaul in a letter. But since the department did not respond, the firm deemed that it was approved.
Mercado noted that Busan was able to restore 10 cars on its first month alone, 10 cars in July 2015, and six at the end of 2016.
No letter received
But Deo Leo Manalo, MRT-3 director for operations, said he did not receive the letter.
Manalo nevertheless told senators he expected an improvement in train operations by the end of the year. Long queues at train stations, for instance, will be gone with the completion of the MRT-3’s power upgrade that will allow more trains to run, he said.
The MRT-3 has 20 three-car trains in operation, serving 500,000 people daily at a speed restriction of 40 kilometers per hour (kph).
By June, Manalo said, two three-car Dalian trains would be deployed during off-peak hours.
The new Dalian trains are among the 43 light rail vehicles (LRVs) that were brought by the Department of Transportation in the previous administration to hike the MRT-3’s capacity, costing P3.8 billion.
The LRVs have been delivered by Dalian and are undergoing testing. Their signaling systems are also being configured.
“If we run more trains, we need more power. The upgrade will be completed by November and by December we could add more trains,” Manalo told senators during the hearing.
The MRT-3, he said, should be able to deploy 15 four-car trains and five four-car Dalian LRVs by December, increasing average daily capacity to 600,000 riders from 500,000.
“So by the end of the year we could put an end to long lines in MRT,” Manalo said.
The rails meanwhile will be replaced by April 2019, allowing trains to run at 60 kph, which means more train trips and more passengers.
Poe suspended the proceedings and said she would invite former MRT-3 general manager Al Vitangcol and Transport Secretary Arthur Tugade, among others, in the next hearing.