China state firm to supply trains

Why isn’t the Senate investigating the outrageous P4-B MRT deal?

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Third of a three-part series

I’m referring to the contract signed by the Department of Transportation and Communications (DOTC) with a Chinese firm in June to buy 48 light-rail train cars for the decrepit Metro Rail Transit Line 3 (MRT-3) worth P3.9 billion.

It’s certainly a bit ironic: A state-owned company of a country, which President Aquino has called a bully in claiming our territory, has bagged not only a huge procurement government contract under his watch, but a strategic one involving the safety of our main metropolitan mass transit system, the MRT-3.

Maybe it’s so stupid of us as a nation, but so brazen – and arrogant that they believed they could get away with it – for the DOTC officials to have done so. Consider the facts:


The Czech Ambassador to the Philippines Joseph Rychtar alleged in April last year that the DOTC’s MRT-3 general manager Al Vitangcol 3rd asked $30 million (P1.3 billion), in bribes for the Czech firm Inekon Group to be given the contract to supply 52 new light-rail vehicles (LRVs, or the train cars) for the mass transit system. Rychtar alleged Vitangcol was extorting the money for a group that included personalities closely linked with the Liberal Party.

This occurred, he claimed, in July 2012. That was when the DOTC was still headed by Mar Roxas. It is not known whether Roxas’ transfer just a month later to the interior and local government department was related to the bribery attempt.

Let’s buy Made-in-China trains instead? MRT-3 train derailed last August. Inset below, MRT-3 general manager Vitangcol whom the Czech ambassador accused as attempting a $30 million extortion when Roxas, above, was DOTC secretary.

Let’s buy Made-in-China trains instead? MRT-3 train derailed last August. Inset below, MRT-3 general manager Vitangcol whom the Czech ambassador accused as attempting a $30 million extortion when Roxas, above, was DOTC secretary.

(The reason why Inekon, the fourth largest supplier of LRVs in the world, was keen on the contract is that it had pirated train engineers from CKD Tatra, which was the original supplier of MRT-3 trains, and therefore was confident it could build the right trains and within schedule. CKD Tatra had gone bankrupt in the early 2000s and was sold to a German engineering firm.)

A political earthquake
As an ambassador for five years (to Greece and Cyprus), I can say without a doubt that such an accusation of high-level corruption by an envoy against officials of the host government is a political earthquake. In countries complying with the rule of law and with an independent press, that would have required the host government dropping everything to get to the bottom of such serious allegations. If we only had a fiercely independent press that was not under Aquino’s influence, I’m sure this government would have already been toppled in the wake of such scandal.

What makes the ambassador’s allegation credible, that it could have involved the highest levels of this government, is that funding for the contract was made available at that time, unknown to most people, but told to the Czechs.

This was because Budget Secretary Florencio Abad had, at that time, hijacked the Congress-approved budget through his scheme that was euphemistically termed the “Disbursement Acceleration Plan.” Through the DAP, which was exposed only last year, Abad issued on the last day of the year (Dec. 28, 2011) what was called a “Notice of Cash Allotment” (NCA-BMB-A-11-0023872) to the DOTC.

The NCA informed the DOTC that P4.5 billion was already in the Land Bank of the Philippines for the department to use for the “capacity expansion of MRT3,” which meant money was available for the purchase of new trains to add to its 50 odd cars in service.

I was told that the Czech ambassador had been told that if Inekon agreed to the “arrangement” for the payment of $30 million, the contract would be awarded in a few days’ time and payment for the contract made right after that.

Sorry I have to use that worn-out cliché: Only in the Philippines. After the extortion attempt was exposed by the Manila Times’ chairman emeritus Dante Ang Sr. on June 2013, DOTC Secretary Emilio Abaya matter-of-factly vouched for his official, while presidential spokespersons muttered their overused “we-will-investigate” replies.

Suspended a year later
Vitangcol would even remain in his post, and was suspended only a year later for involvement in another allegation of corruption – one of his relatives and his friends were part of the firm that got the P600-million maintenance contract for MRT-3.

In his statement submitted in May to a committee of Congress investigating the allegations, Rychtar said: “I, as the Ambassador of the Czech Republic, confirm that an extortion attempt took place in July 2012, followed by other suspicious circumstances, which led to a questionable bidding process in March 2013.”

He added: “I wish to inform you… that the Czech company Inekon Group was, of course, not blacklisted officially by the DOTC, but we did receive the informal information that our proposal would not be entertained, which was manifested by the fact that our letters to DOTC (asking about how to participate in the bidding) were unanswered.”

The bidding the Czech ambassador was referring to actually was done on June 11, 2013, which, unlike most government biddings, was not open to media. DOTC spokesman Michael Sagcal would only reveal the results of the bidding after it has taken place:

“Two Chinese companies participated in the bidding, Dalian Locomotive & Rolling Stock Co. CNR Group and CSR Zhuzhou Electric Locomotive Co. Ltd.”

“CSR Zhuzhou was declared ineligible by the DOTC’s Bids and Awards Committee due to its failure to submit a certificate of reciprocity and to comply with a technical requirement. As a result, its financial proposal was no longer opened,” the spokesman said.

What a charade.

The “CNR” in the CNR Group, of which Dalian Locomotive and Rolling Stock Company is a member firm, stands for China North Railway, while the CSR in CSR Group Zhuzhou Electric Locomotive Co. Ltd is an acronym for China South Railway.

If their names seem the same except for the “North” and “South” adjectives, it is because both were formed in the 2000 and 2002 period out of the mammoth “China National Railway Locomotive & Rolling Stock Industry Corporation,” the monopoly in train service in the country. As with the original mother company, the two firms are both state-owned enterprises supervised by the State Council of the People’s Republic of China, and likely under a single commissar.

In short, the two bidders were two firms owned by the same entity, China, and the DOTC claims there was a proper bidding?

Given our quarrel with China, shouldn’t we be realistic and worry that if our relations get worse with that superpower, it may decide to chuck unilaterally that deal, give some convoluted excuse for doing so, then watch the MRT-3 collapse with its decrepit trains, and gloat at the resulting political chaos here? Have the DOTC officials compromised our national security?

LRV manufacturers
There has been a boom in light-rail mass transit systems in the world because of environmental concerns and the US’ recent rush to adopt the technology. Hence, there are more than a dozen LRV manufacturers today. The four firms that have the biggest shares are Germany’s Siemens (which bought CKD Tatra, the company that manufactured the first MRT-3 trains), the Japanese Kinki Sharyo, the American United Streetcar, and the Czech Inekon. Other LRV manufacturers are the Canadian Bombardier Transportation, the Austrian Lohner-Werke, the Swiss Stadler Rail, the German Duewag, and CAF USA.

None of these firms, if we are to believe the DOTC, were interested in supplying MRT-3 with their LRVs? Only the Chinese Dalian, which hasn’t manufactured the kind of LRVs needed by MRT-3, showed an interest?

And why this Chinese firm, which on its website itself says that the MRT-3 deal is the first contract it has obtained to build such type of LRVs? It even noted that the LRVs will operate in extreme conditions, “close to the equator, where the monthly maximum temperatures are above 30 degrees, the air humidity and salt content high, and with a complex weather with typhoons and rainstorms.”

And when will the Chinese deliver its 48 trains? “The first train is scheduled for delivery in 18 months,” its website reported in June. That means we will see a prototype only at the end of next year. Delivery of the trains is likely to happen after Aquino steps down from office and bunkers down in Hacienda Luisita.

Why aren’t we outraged that the DOTC, manned by Aquino’s officials, are taking us for fools?

DOTC officials are accused by a reputable Czech firm Inekon of trying to extort money for the contract to supply MRT-3’s new trains. The DOTC undertakes, less than a year later, a bidding Inekon did not, or could not participate in. A Chinese firm with no experience in LRV manufacturing “wins” in a bidding participated in by its sister company.

And there is nothing fishy in that?

What we should all be livid over is this:

If the Czech envoy’s accusations are proven right, that means Aquino’s officials had delayed the procurement of new trains—which would have made MRT-3 safer and reliable, and reduced commuters’ waiting time—in order to make money for themselves and more likely for the Liberal Party, and I would suspect also for this President. That’s the worst kind of corruption. Even our national security has been compromised.

tiglao.manilatimes@gmail.com
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39 Comments

  1. Blake Rodriguez on

    Left in the incompetent hands of Aquino’s trusted ally Abaya, it’s no wonder the MRT is crumbling down.

  2. Outrageous indeed. And had Aquino’s opponents been the ones involved in this, fir sure there would have been senate hearings on this by now. Where was the vigilance in coming after the likes of Arroyo, Corona, now even Binay? Is that reserved only for Aquino’s opponents? Are his allies and appointees exempted from it?

  3. Dina Dela Cuesta on

    The graft and corruption involved in this whole MRT fiasco should be investigated and exposed, and those involved should be prosecuted! Why is it that the only ones being probed and jailed are the opponents of this Administration? Look, it’s only right that those senators involved with the PDAF are being charged, but shouldn’t administration allies get the same treatment? Especially that this corruption of epic proportions greatly affects the everyday lives of the simple ordinary Filipino workers?

  4. So given a choice between spending P4B for creaky China trains that still need modifications, and getting no-cost trains from the MVP group of companies, the big brains at DOTC opt for the expensive. What did I miss? Is it because free trains (and upgrades and subsidies) don’t get them kickback? Do we dare trust an agency that enraged the Czech ambassador enough to file a complaint for extortion? Crippled MRT system led to crippled productivity as well as compromised safety to the 600K daily riders since Aquino’s rats took over MRT management. By any definition that’s economic sabotage, and you can add criminal negligence to that.

  5. Ginawang gatasan ng LP boys ang DOTC. May mga serbisyo na mahal na hindi naman nabigay ng ayos sa sambayanan. dapat ngang kasuhan iyang mga yan!

  6. Brazen,blatant and abusive is all i can say to this evil animal we call the noynoy abnoy government…The worst PLUNDERER in the history of the Philippine politics,and that is no lie..

  7. Poor Philippnes. The country is overwhelmed with multibillion cases of corruptions. The corruptions, grafts and plunders are everywhere. No wonder Filipinos are poor, infrastructure breaking down without signs of good repaire or replacement. The Philippines is wallowing in the deep quagmire of mismanagement and corruption,

    Poor Philippines and Filipinos. Wake up!

  8. Yan ba ang sinasabing hindi magnanakaw? Bullshit yun. Pag ang mga alyado mo ay harap harapang nagnanakaw sa taong bayan at di mo pinipigilan, malamang ay may porsiento ka. Tama?

  9. opinion reader on

    kosing-gawlu, P.I, P.I. at P.I pa!, yun lang!, madami na ako nabasa tungkol sa anumalya sa lintek na transaksyon sa MRT na ito. Sarap pasagasaan sa riles ng mga taong sangkot dito, Di na sila nahiya sa halos 300K-400K na tao na sumasakay araw-araw sa mapanganib na MRT. Minsan akong sumkay ng MRT at nakita ko ang di-magandang pag maintain nito, lupet mo kung sino ka man na nag mementena ng MRT. I think sa mga nangyayari sa MRT na ito, dapat siguro na ihinto muna ang operation nito, para na rin sa kaligtasan ng mga mananakay nito.

    Puro kay VP pinay investigation, na kung nangurakot man eh nag tatrabaho naman ata ng maayos at nakapag bibigay ng tama at wastong serbisyo. Di tulad ng mga nakaupo na ka alyado ng Pnoy na yan, halos wala naman mga nagawa para sa mamamayan, puro pasakit at sakit ng ulo lang.

  10. You don’t have to be a rocket scientist to figure out why the administration is not investigating the scandal kasi masasagasaan ng train ang mga kapartdo at kaibigan ni Pres. Aquino.

  11. Emil Friedrich on

    Let’s not forget too that Dalian a) will sell us trains that still need to be modified (extra expense) because they are incompatible with the MRT system, and b) has a less-than-sterling safety record in othjer countries. But what can you expect from an agency whose head man declared that taking the MRT was a matter of choice to commuters who have no other means of transportation.

  12. MAGKANO? kaya ang kinita nila dyan, nakalusot nung una kaya malakas pa rin ang loob na gawin. Tsk tsk. Malala na talaga ang gobyernong Pilipino. Kahit sino umupo corrupt. Buwagin na lang nag gobyerno at magtayo ng parliamentary form na pag ayaw na at nasbuking sa katiwalian ang isang opisyal ay sibakin.

  13. Let’s face it, the mainstream media you refer to and more importantly the citizenry are behind this government, as are foreign investors and multilateral development institutions. Though this is a legitimate issue to be looked into and should be investigated.

  14. RA 9184 otherwise known as the Procurement Act dictates the deliberate evaluation of the responsiveness of bidders in a certain government project… we from the LGUs have been observing the provisions of the law to the dot including the presence of stakeholders (from the private sector and COA reps) during the opening of bids… at the national level, they don’t do this? what makes them exempt? RA 9184 is obsolete as far as they’re concerned?

  15. Pilo Manalaysay on

    totoo ngang may himala! aba biruin mo, na hokus pokus na pala ng yellow army ang kaban ng MRT. napakalaki ng mga pera na hinihingi tapos sa serbisyo na bitin. aba gagamitin pa eh yung mga luma na parts.

  16. Mr. Tiglao, kung pagtutuonan natin ng Pansin at ating limiin ang ginawa
    ng Team Pnoy sa MRT, ay tama ang lahat ng sinabi ninyo, 2 Ang pwedeng
    dahilan bakit ganyan ang kinalabasan ng MRT. 1.Ginawang gatasan
    ang Pondo ng MRT at inisip nilang napaka-daling sindikatohin; 2. Napa-
    kahina ng UTAK o napaka BOBO ng Team Pnoy.
    Sa isang matinong decision ang una dapat binigyan ng prioridad, yung
    original na nag design ng systema, kausaping mabuti na magsagawa
    ng suhestiyon para maituloy at ma e modernized ang systema. Dahil
    ang Inekon ang most logical choice sila ang pinaka-malapit sa posibilidad
    ng negotiated para sa ipagpapatuloy ng modernong MRT. at maaring
    mas bumaba pa ang gastos dahil sila ang original.Hindi rin tamang isipin
    na pwedeng na lang basta lagyan ibang train na gawa at design ng
    ibang kumpaniya dahil malaki ang posibilidad na hindi maging compatible
    sa existing infrastractura. Pero kagaya ng inyong tinuran sadyang
    ‘NILUTONG MAKAW” at makikita ang napaka-linaw na mga ebidensiya,
    gaya ng tangkang PangongoTONG sa Inekon, Sinadyang ikubli ang
    mga Nilutong negosasyon sa China, na gaya rin ng Maintenance Contract
    na Nilutong MAKAW din, ang China co. ay wala ring eksperyensa at
    Track record sa gaya ng pinatatakbong MRT sa EDSA.
    Kung Baga ang mga SINDIKATO ng DOTC sa MRT ay may FINGER
    PRINT na sa Paglulutong MAKAW sa mga maniobrang pag mamagic ng
    bidding at negotiation para mapaburan ang mga Kumpaniyang gusto nila.
    Sa Maintenance ang pinili rin ng mga tao ni Abaya ay yung kakatayong
    isang napaKaliit na Kumpaniya, walang Kapital, wala ring track record, na
    phTram/apt Global kapalit ng isang Kilalang kumpaniya na may reputasyon
    TES/SOMITOMO, Gaya rin ng sa Bagon sinadyang idelay ang
    announcement, hindi naglabas ng Term of Reference, Lumabas ang
    bidding invitation ilang araw bago mag bid. Ang nakakapagtaka, kahit
    GARAPALAN ang maniobrang Pagsindikato sa MRT, siting pretty lang
    ang pag nonoying ng Malacanan, kahit na nasakripisyo ang…

  17. this requires top priority investigation by the Senate, House and DOJ but NONE of this seems to matter now what matters most for the said entities is to investigate VP BINAY exclusively and non-stop, they don’t care for the DAP (because they are all part of it), they don’t care about a PNP General caught with his pants down regarding his lavish lifestyle and properties, in fact no one in the govt cares come heaven or hell, all they care about is to pin VP BINAY down to the ground, pounce him until he can’t get up anymore for 2016, top most priority for CALIGULA, ooops I mean PNOY and company..

  18. Can’t write the right words for this regime. Tribune has had written so much about this subject but was not given comments by their readers and some pundits were criticizing them that Ms. Oliveros was biased. But both comments were facts.

  19. If there is any sense of justice in this forsaken country, then people like Vitangcol, Abaya and Roxas should be charged and incarcerated for plunder and treason.

  20. there are three things that keeps on ringing in my ear whenever PNOy speaks
    1. Walang Wang wang
    2. Kayo ang Boss KO
    3. Walang corrupt, Walang Mahirap.

    Wala na ngang wang wang may hawi at blinker naman.
    Hindi nakikinig sa boss, matigas ang ulo. madami na dapat alisin sa cabinete dpa alisin
    MRT kino-corrupt, lahat ng pasahero ng MRT naghihirap.

  21. Huwag muna natin isabay sabay, unahin muna natin itong kina Binay, susunod din yang corruption sa MRT.

  22. Sonny Dela Cruz on

    It is always the same tune whenever a writer wrote about corruption in the government, the person or persons involved are always a saint, they never do it. They got their wealth through honesty and hard work. I have that but I couldn’t make a million because I did work in a private company not in the government but those people in the government with position, a 100 million in the bank is so easy to earned, perhaps I need some tips from them for me to make that 100 millions.

  23. There is so much wrong here it is difficult to find out where to begin looking. All I can deduce is that there is a conspiracy or conspiracies to keep everything hidden and away from public view. The Czech ambassador’s allegation can only be true and that points to involvement of the highest levels of this government, This is so clear, it is the place to start and put people in jail.

  24. It is very obvious this Mrt3 were never investigated to fullest by our senate and lower house for the simple reason that a presidential sister might be involved. The foot prints of Mar Roxas is also this mega deal with Dalian. It is a fact the Secretary Abaya is always a constant visitor almost every month in Cubao White House to report to Mar Roxas.

  25. The mischievous PNoy administration is a synonym of the worse corruption, malversation and embezzlement of public funds in history of this nation. Yet the yellow media keeps on defending hoity-toity PNoy and pass the buck on the Arroyo administration. The corruption of the Arroyo administration is “peanuts” compared to this one of PNoy, yet this man continue to fool himself and the public by boasting how clean he is and successful his tenure is.

  26. Leodegardo Pruna on

    The way things are being run, where else could we expect to find our country but the dump site. Incompetence and ineptness characterized the top officials of government. God bless the Philippines.

    • bonus is only given for a JOB WELL DONE……VP is not the issue for now as he is not the one in charge of the government..Pnoy is…

  27. talagang malaking himala ang ginawa nila roxas-abaya tandem sa pagbili sa china ng trains. una hindi gumagawa ng train na tulad ng mrt ang chinese supplier at pangalawa ay inaangkin ng china ang ibang isla ng pilipinas. bakit tayo bibili ng mga gamit sa china na walang ginawa kung hindi apihin tayo dahil sa kawalan nating kakayahan na mag depensa sa ating teritoryo samantalang maraming gumagawa naman ng kailangan nating trains sa mundo. nakakataka talaga. may himala kaya???

  28. Jose A. Oliveros on

    The PeNoy-controlled Senate is not investigating because the track of the investigation may lead all the way to the doors of a white house somewhere inCubao, if not Malacanan itself. That simple!

    • it shows only that pinoy and cohorts thinks filifinos are bobo, nothing knows what happened. that is the problem of electing a no experience president besides people around him are corrutp people.

  29. If all of these allegations are true, we can not entirely blame it on the government. The people’s complacency and inactions are the culprit. The people should have risen up long time ago, especially the 500,000 daily commuters of the LRT, that could have prevented the present state of the LRT. The LRT commuters being interviewed during breakdowns of the system would chorously answer, “Talagang ganun, walang magagawa. Tiis-tiis na lang”. They allow their government to abused them.

    • Leodegardo Pruna on

      The people have been reacting with experts coming out with their intelligent analysis of government transactions but the officials are simply not hearing or listening because the agenda in their minds is MONEY and POWER. Compare how they look at the start of P-Noy’s term and now. God bless the Philippines.

  30. Ginamit ni Aquino ang china para takutin ang sarili niyang bansa,upang maipasa lamang ang edca at ang pilipino ay uto-utong sumang-ayon sa kanya!
    Ganito kahayup ang pangulo ng pinas!

  31. It is a known fact that persons belonging to LP cannot and will not be investigated nor prosecuted under the Daang Matuwid Rule of Pnoy.

  32. Why will an ambassador risk a diplomatic row with a host country by publicly exposing an extortion attempt that was not even consummated? Di kaya nakabigay na ng advance tapos binigay sa iba yung contrata kaya nagwala? Just thinking out loud..

  33. gabriela silang on

    it really boggles the mind why we just can’t rage!
    this article is very revealing! it seems we’ve been sold down the drain and not even a whimper from sherlock holmes senators and congressmen.
    it just doesn’t make sense that a non-experience chinese firm bagged the deal over the most experienced train manufacturer….it stinks!…and it stinks all the way to the occupant of stinky pasig river.
    whatever happened to guingona, trillanes, drilon, cayetano, pimentel and the bunch of “crusaders of truth’? include too pdi, phil star, abs-cbn, gma and others in the yellow media?…but i would like to give them all the benefit of the doubt…maybe, they’re not aware of the machinations and charade…maybe, they are not aware of the fishy deal…or maybe, they’re all greased…nakakabulag talaga si ninoy…lalo na kung di siya nag-iisa. bundle bundle pa!