FORMER officials of the transportation department are now facing graft charges before the Office of the Ombudsman over the alleged “onerous” contract with an “unqualified” rail-maintenance provider, an accusation that the agency’s former chief belied.
Transportation Undersecretary Reinier Paul R. Yebra on Monday delivered a 29-page complaint to the Ombudsman, charging former Transportation Secretary Joseph Emilio A. Abaya with graft for entering into a P3.81-billion maintenance contract with Busan Universal Rail Inc.
Citing Section 3 of Republic Act 3019, or the Anti-Graft and Corrupt Practices Act, Yebra accused Abaya, 10 former transportation officials and 10 Busan Rail executives of “conspiring and confederating” to enter into a contract that is “grossly disadvantageous to the government.”
According to the complaint, the new management of the transportation department finds it anomalous that a Busan Rail is the one receiving payments from the government when a different firm—Busan JV—participated and won the bidding for the multibillion-peso contract.
“We want to know the truth. We find it anomalous that the project was awarded to Busan JV, but the one receiving payments and doing MRT 3[Metro Rail Transit Line 3] maintenance works is Busan Rail, a totally different entity,” Yebra said.
Busan JV received the notice of award for the deal on December 23, 2015. Yebra alleged former Transportation Assistant Secretary for Procurement Camille R. Alcaraz of requesting the Securities and Exchange Commission (SEC) to facilitate the registration of a special purpose company consisting of the members of Busan JV for the contract award of the project, on the very same day.
“Busan Rail is a newly formed corporation. [It] does not only lack the required years of experience, but, more important, has not, for all legal intents and purposes, joined the bidding at all,” the complaint read.
Sought for comment, Abaya said his group’s decision to hire Busan Rail as the upkeep provider of the MRT 3 is legal and above board.
“We have not received a copy of the complaint and we will study the complaint but, in any event, 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,” he said in a text message.
He, likewise, said his group is ready and eager to answer the complaint before the courts. “We look forward to clearing our name before any appropriate body.”
MRT Holdings Inc. (MRTH) Chairman Robert John L. Sobrepena, for his part, lauded the transportation department for having the guts to finally file formal complaints against former officials, which, he has repeatedly berated over “wrong decisions” on the operation and management of the railway system.
“It’s about time these officials are held liable for their actions. The MRT and its commuters deserve a technically and financially qualified maintenance provider,” he told the BusinessMirror.
MRTH owns the MRT Corp. (MRTC), the corporate owner of the MRT.
The transportation department has issued the termination of Busan Rail’s contract for four reasons: poor performance, failure to put in service and subsequently ensure the availability of contractually obligated number of trains, and, more important, for failure to put in operation reliable and efficient trains; failure to implement a feasible procurement plan for spare parts, as it in fact failed to procure and store the required volume of spare parts, which affected its ability to effect immediate repairs on defective trains and other facilities of the MRT 3 system; and failure to comply with the contractual requirements of a complete and up to date Computerized Maintenance Management System.
Busan Rail was given seven calendar days upon its receipt of the notice to respond and submit a verified position paper stating why its contract should not be terminated.
After that period, the transportation department shall have 10 days, upon receipt of Busan Rail’s response, to decide whether or not it will issue an order to terminate the entire contract.
Should this come into fruition, the transportation department would have to return the maintenance obligation to the MRTC.
“Legally it should go back to MRTC, who, in turn, will jointly negotiate with a qualified maintenance provider and pass on the contract to the transportation department at no profit to MRTC on a pass-through arrangement,” Sobrepena said.
Busan Rail has repeatedly claimed that it has been performing above contract requirements.
The MRT is the most-congested railway system in the Philippines. It serves roughly half a million passengers per day, above its rated capacity of 350,000 passengers.