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Leftist groups sue Abaya for graft over Buri maintenance deal for MRT 3

Office of the Ombudsman

Office of the Ombudsman. (Photo from the website of the Office of the Ombudsman)

The complaints just keep coming in at Office of the Ombudsman over the government’s recently-terminated Metro Rail Transit Line 3 maintenance deal with Busan Universal Rail, Inc. (Buri).

Bagong Alyansang Makabayan Secretary General Renato Reyes Jr. and former Bayan Muna Rep. Neri Colmenares on Monday led the filing of a graft complaint against former Transportation Secretary Joseph Emilio Abaya and 14 others over alleged irregularities in the P3.809-billion contract.

In a 23-page complaint, Reyes and Colmenares said Abaya and his subordinates were “guilty of manifest partiality, bad faith and gross inexcusable negligence” when they chose a maintenance provider that “utterly lacks the financial capability and technical expertise.”

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“Cost efficiency, quality and safety were neglected as shown by the fact that the MRT-3 System continues to operate with very inefficient and ineffective maintenance,” the complaint stated.

According to the complaint, bidding documents showed Busan Transportation Corp. owned a mere 4 percent of the Buri joint venture, and it was 96-percent owned by four Filipino corporations that allegedly lacked experience in the maintenance of the rail system.

These companies were:

  • Tramat Mercantile, Inc., which manufactures an imports motor vehicles and heavy and light equipment machines
  • TMICORP, Inc., which deals with aircraft and marine parts and ground support equipment
  • Castan Corp., a general construction business
  • Edison Development and Construction, which allegedly lacked the proper registration with the Securities and Exchange Commission

“Since the only rail maintenance related entity in the Joint Venture of Busan is the Busan Transportation, who only has 4% equity in total, the maintenance of the MRT-3 System was greatly compromised,” the complaint read.

Reyes and Colmenares claimed contract negotiators even halved the contractor’s required minimum net worth to P1 billion, from the previous P2 billion.

The said threshold was imposed on each joint venture member with an equity share at least 25 percent, which the complainants said favored the Filipino corporations that only had 24.5-percent shares each and could not meet the P1-billion threshold.

Reyes and Colmenares also questioned the substantial amendments to the maintenance contract when the agency then known as the Department of Transportation and Communications resorted to its negotiated procurement.

DOTC had to adopt the alternative procurement method after declaring two bidding failures for the contract that originally had approved budgets of around P2 billion.

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When it negotiated the contract with Buri, the approved budget for the contract doubled to P4.25 billion and two new components – the overhauling of 43 light rail vehicles and the total replacement of the signaling system – were even added.

Reyes and Colmenares said the LRV overhauling and the signaling system replacement should have been gone through competitive public bidding first, and not “simply added or made a rider” to the BURI contract.

The said components should not be treated as emergency purchases as the need to overhaul the light rail vehicles or replace the signaling system was not caused by a calamity but by the government’s negligence.

Such reason cannot be considered as synonymous to natural or man-made calamities necessitating emergency procurement. Thus, including [the two components] was not justified,” the complaint read.

Reyes and Colmenares’s fellow complainants were Advocates of Science and Technology for the People Secretary-General Maria Finesa Cosico, and Train Riders Network members Angelo Suarez, Maria Donna Miranda and James Relativo.

Besides Abaya, the other Aquino administration officials named respondents in the complaint were former Undersecretaries Rene Limcaoco, Catherine Gonzales and Edwin Lopez, former MRT-3 general manager Roman Buenafe, and former bids and awards committee members Ofelia Astrera, Charissa Eloisa Julia Opulencia, Oscar Bongon, Jose Rodante Sabayle and Maria Cecilia Natividad.

Named as private respondents were Buri incorporators Eldonn Ferdinand Uy, Elizabeth Velasco, Belinda Ong Tan, Brian Velasco, and Chae-gue Shim.

In a text message to reporters, Buri spokesperson Charles Mercado said: “Buri is confident that it will be able to address and negate any charges against us.”

Meanwhile, Abaya said: “Our decision has always been guided by our conscience and our compliance with procurement laws and laws with regard to the procurement of the maintenance provider. We look forward to clearing our name before any appropriate body.”

This was the third complaint filed before the Ombudsman in connection with the allegedly irregular maintenance deal.

On Sept. 20, Buri first accused current Transportation Undersecretary Cesar Chavez of graft over unpaid billings and threats to terminate the contract. On Oct. 23, Transportation Undersecretary Reinier Yerba filed a complaint against Buri and Abaya over the alleged procurement irregularities.

The Department of Transportation terminated the Buri contract on Nov. 6. /atm

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