THE Office of the Ombudsman has ordered the indictment of former Department of Transportation (DOTr) Secretary Joseph Emilio A. Abaya and 16 others, including Busan Universal Rail Inc. (Buri) officials, in connection with the anomalous Metro Rail Transit (MRT 3) maintenance contract.
Ombudsman Conchita Carpio-Morales, in a statement, said her office found probable cause to charge Abaya and 16 others for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act [RA] 3019).
The Ombudsman said the respondents extended unwarranted benefits, advantage and preference to the contractor when it awarded the project to Busan JV, an ineligible and unqualified entity.
Also facing charges are DOTr Undersecretaries Edwin Lopez, Rene Limcaoco (head of the negotiating team) and Catherine Jennifer Francis Gonzales (vice head of the negotiating team); MRT 3 General Manager Roman Buenafe, Camille Alcaraz (assistant secretary for procurement), Ofelia Astrera (vice chaiman of the MRT 3 Bids and Awards Committee or BAC), Charissa Eloisa Julia Opulencia (Attorney V), Oscar Bongon (chief of engineering division) and Jose Rodante Sabayle (Engineer III).
Private respondents Eldonn Ferdinand Uy of Edison Development and Construction, Elizabeth Velasco of Tramat Mercantile Inc., Belinda Tan of TMI Corp. Inc., Brian Velasco of Castan Corp. and Antonio Borromeo, Jun Ho Hwang and Elpidio Uy from Buri were also included in the indictment.
The Ombudsman said the Busan JV was not technically, legally and financially capable to undertake the MRT 3 long-term maintenance contract.
“Despite its being unqualified, the contract was still awarded to it by the DOTr, in violation of Section 53 of the Revised Implementing Rules and Regulations (RIRR) of RA 9184, which requires that in negotiated procurement, the procuring entity should negotiate with a technically, legally and financially capable supplier, contractor or consultant,” the resolution said.
“That Busan JV/Buri was not qualified for and is inept to undertake the implementation of the project is supported by the COA’s [Commission on Audit] audit findings as contained in its 2016 [report],” it added.
As then DOTr secretary, the Ombudsman said Abaya had supervision and control over the officials under him, and was immediately and primarily responsible for all government funds and property pertaining to his agency at the time of the questioned transaction.
“Occupying an executive position, Abaya is required to exercise diligence in the highest degree in the performance of his duties. There is a given authority and responsibility to Abaya as DOTr secretary to regulate the acts of the DOTr officials responsible for the procurement of the MRT 3 long-term maintenance contract, and he cannot simply evade such responsibility by invoking reliance on his subordinates, especially considering that the subject contract is one with a scope and magnitude affecting a big portion of the commuting public in Metro Manila, with an accompanying financial impact on the coffers of the government amounting to more than P4 billion,” the Ombudsman said.
By allowing the award of the contract to Busan JV despite the attendant glaring irregularities, Abaya deliberately ignored applicable laws, rules and regulations, and standard operating procedures, falling short of, or disregarding the required competence expected of him in the performance of his official functions, the Ombudsman stated.
The Ombudsman’s Special Panel of Investigators said that in October 2014 and January 2015, the DOTr conducted two biddings for the three-year maintenance service contract for the MRT 3. However, both biddings failed due to nonsubmission of bids.
In January 2015 Abaya issued a special order creating the MRT 3 BAC for the procurement of goods, infrastructure projects and consulting services of the MRT 3 system.
In March 2015 the MRT 3 BAC issued Resolution 002, Series of 2015, recommending the resort to negotiated procurement through emergency cases under the Government Procurement Reform Act (RA 9184).
Documents show that the contract was set to be awarded to a single maintenance service provider that would establish a single point responsibility for all the following disciplines: maintenance of the MRT 3 system for P2,270,400,000 (three years); general overhauling of 43 units of light-rail vehicles (LRVs) for P1,013,560,000 (three years); total replacement of the signaling system for P900,000,000 (two years); and additional maintenance works for P67,940,000 (six months).
In October 2015 the following firms submitted their proposals: (1) Busan Joint Venture (Busan JV); (2) Joint Venture of DM Consunji Inc., Beta Electric Corp., Baudis Bergmann Rosch Rail Automation GmbH, and Hamburg Consult GmbH; and the (3) Joint Venture of Schunk Bahn-Und Industrietechnik GmbH and Comm Builders and Technology Philippines Corp.
Busan JV is composed of the following firms: Edison Development and Construction; Tramat Mercantile Inc.; TMI Corp. Inc.; Castan Corp.; and Buri.
During the evaluation process, all offers were found to be deficient in their eligibility and technical documents, and were given the opportunity to remedy the defect.
In October 2015, however, the negotiating team declared Busan JV as being the sole entity that passed the eligibility on technical and financial documents evaluation.
The negotiating team recommended to the MRT 3 BAC the award of the MRT 3 long-term maintenance contract to the Busan JV in the amount of P3,809,128,888 as the legally, technically and financially eligible JV.
In January 2016 the DOTr, the MRT 3 and Busan JV entered into a contract for long-term maintenance contract.
The Ombudsman, citing the COA 2016 report, said “The DOTr still failed to provide the riding public with a safe and comfortable transport system even with the procurement and delivery from August 2015 to January 2017 of 48 new LRVs with a total cost of P3,759,382,400.”
Welcome development
The Ombudsman’s latest finding of probable cause for graft against the former transportation officials involved in anomalous MRT 3 maintenance contracts effectively upheld earlier findings by the Senate Public Services Committee inquiry into the MRT 3 mess.
Sen. Grace Poe, who chaired the Senate probe, said on Monday the Ombudsman’s action was “a welcome development in the fight to make erring public officials accountable for their failure to exercise the highest degree of diligence in the performance of their duties.”
In a news statement, Poe pointed out that the Office of the Ombudsman’s announcement was “consistent with the conclusion of the Senate Committee Report submitted by the Subcommittee on Public Services.”