By Michel Punongbayan & Ed Punay | The Philippine Star | May 14, 2015
MANILA, Philippines - The Commission on Audit (COA) has ordered the Department of Transportation and Communications (DOTC) to collect P52.782 million in penalties from Metro Rail Transit maintenance service provider Global-APT Joint Venture that former MRT general manager Al Vitangcol III allegedly tried to save the firm from paying in 2013.
A review of available documents showed that Vitangcol approved the waiver of the penalty for 30 days during the transition period when he met with a representative of Global-APT Joint Venture on Sept. 18, 2013.
“Penalties aggregating P52,782,000 for non-compliance with the conditions of the contract on the DOTC-MRT 3 Systems Temporary Maintenance Provider were waived without legal authority contrary to the Section IV, Item 29 of the General Conditions of the Contract (GCC),” the COA said in a report released yesterday.
On Sept. 3, 2013, the DOTC and Global-APT Joint Venture entered into a contract for the DOTC-MRT 3 System Temporary Maintenance Provider (TMP) for one year covering the period from Sept. 5, 2013 to Sept. 4, 2014 with a contract price of P685 million, records show.
State auditors said the GCC specifically states that “no variation in or modification of the terms of this Contract shall be made except by written amendment signed by the parties.”
The COA said Vitangcol’s waiver and informal modification of the terms and conditions of the contract, instead of the head of procuring entity – the DOTC – is contrary to the rules.
“As a consequence the penalty was not imposed/deducted from the first progress billing of Global-APT Joint Venture,” the COA said.
The Certificate of Performance for Services Rendered and Delivered was also not signed contrary to the GCC, state auditors said.
The contractor must pay the P52.782-million penalty through deductions from succeeding billings, the COA said.
COA said the maintenance contract includes provisions for penalties to be imposed against the maintenance service provider in case of failure of the contractor to comply with maintenance specifications.
An audit of the first progress billing of Global-APT Joint Venture paid under Check No. 104645 dated Dec. 27, 2013 covering Sept. 5 to Oct. 4, 2013, and the Train Availability Monitoring Report showed that the contractor “failed to provide the required number of rolling stocks which should have been supplied during peak and non-peak hours as reflected in the Report of Number of Revenue Cars.”
It also learned of power interruptions owing to rolling stock and system failures, and defective elevators and escalators.
In defense, the DOTC said the train availability and penalty report for the first billing period showed no penalty can be assessed against the trains.
“Attorney Vitangcol avowed that he did not in any way modify or amend the contract and declared that the waived penalties for the first 30 days were in accord with the terms and conditions of the contract and legally anchored on General Bid Bulletin No. 003-2013 dated May 17, 2013,” a department official said.
However, the COA stands firm that DOTC MRT-3 had made modifications on the contract when the penalties incurred were waived.
Management imposed penalty and deducted P211.808 million from the APT Joint Venture’s billings from Sept. 5, 2013 to Sept. 4, 2014, records show.
Global-APT speaks out
Louis Rene Zaide, Global-APT Joint Venture spokesman, said records will show that MRTC had made no rehabilitation of MRT-3 during its tenure, and that it is only now that the DOTC had to take the necessary action with the purchase of rails and new trains.
“I also referred to a letter to DOTC MRT-3 from TESP Sumitomo dated Sept. 21, 2011, that stated the continuous overloading of passengers of MRT-3 depreciates the trains drastically,” he said. “This is precisely our present situation.”
Train contract to proceed
A P3.8-billion deal between the DOTC and a Chinese firm for the supply of 48 brand new trains to the Metro Rail Transit can now proceed.
Affirming its July 31, 2014 resolution, the Court of Appeals (CA) has dismissed the petition of MRT-3 builders Metro Rail Transit Corp. (MRTC) and MRT Holdings II to stop the awarding of the contract for the manufacture and supply of 48 light rail vehicles (LRVs) to Dalian Locomotive and Rolling Stock.