TurfSite Manila | October 6, 2017

DOTr moves for termination of MRT-3's BURI contract, claims contract is void ab initio

The Department of Transportation (DOTr) expressed its firm stance to terminate the maintenance contract for MRT-3 with Busan Universal Rails Inc. (BURI), stating that the contract was void from the beginning.

During an inquiry by the House of Representatives' Committee on Good Government and Public Accountability chaired by Rep. Johnny Pimentel, DOTr officials stated that the maintenance contract with BURI is questionable and void ab initio.

DOTr Undersecretary for Legal Affairs and Procurement Reiner Paul Yebra said that his office has already recommended the termination of the BURI contract and is now awaiting for Verified Report by MRT-3.

Usec. Yebra said that his office will also consider recommending the blacklisting of BURI from participating or entering into any contract with the government, as suggested by Rep. Pimentel.

He said his office is likewise reviewing the possible filing of appropriate charges against those involved in the MRT-3 maintenance deal before the Office of the Ombudsman.

During the inquiry, DOTr MRT-3 officials also belied claims of BURI that it did not bill the government for two Vehicle Logic Units (VLUs), amounting to PHP 4 million.

A VLU, which costs PHP 2 million each, is part of the Automatic Train Protection system, which according to Atty. Hernando Cabrera of the DOTr Railways Sector, is the "heart and soul" of the safety operations of any train system. The VLU controls the speed and brakes of a train to avoid over speeding, keeps safe distance between trains, and applies brakes to avoid collisions.

DOTr MRT-3 showed to the Committee documents from BURI showing that the firm has billed the government for the 2 VLUs.

DOTr MRT-3 also provided documents showing that BURI already installed the VLUs in car nos. 6 and 63.

Further, it was revealed during the hearing that BURI was only issued its Certificate of Incorporation from the Securities Exchange Commission (SEC) after it was awarded the MRT-3 maintenance contract.

"DOTC awarded the (maintenance) contract to BURI on Dec 23, 2015 but such consortium was only registered to SEC January 4, 2016. Hindi lang fake ang spare parts. Fake din ang contract," Pampanga Congressman Dong Gonzales said.

The House Committee asked DOTr MRT-3 to submit all documents, including the maintenance contract signed during the previous administration and a list of names involved in the approval of the contract, who will then be summoned to the Committee's next hearing.

The Committee also asked DOTr MRT-3 to submit its own investigation report before the next hearing.

The DOTr recently withheld the payment of the VLUs due to the failure of BURI to provide the necessary supporting documents such as the Factory Inspection Report and Certificate of Origin.