By Ducky Paredes | Malaya Online | July 14, 2014

“ What happens if APT Global wins either or both the LRT1 and LRT2 contracts and it turns out that the NBI report recommends the filing of criminal charges against any or all of the APT Global executives over either or both MRT3 scandals?“

Light Rail Transit Line 2 (LRT2) has announced a July 25 deadline for the submission of bids for the P1.33-billion three-year maintenance and operation (M&O) contract.

The Light Rail Transit Authority (LRTA) also has a public bidding with an Aug. 13 deadline for the submission of bids for the P423.24-million one-year M&O contract for LRT1.

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These auctions bear watching because of the participation of certain interested parties who could be responsible for the worsening system glitches and accidents at MRT3 and who  have in fact  been the subject of parallel investigations by the Office of the Ombudsman and the National Bureau of Investigation (NBI) in connection with the $30-million extortion charge by Czech Ambassador Josef Rychtar and Inekon Corp. boss Josef Husek and the allegedly fraudulent award of the train line’s interim M&O contracts over the past two years.

Another development bears watching given the worsening system hitches at MRT3—thanks to the interim service operators that the DOTC handpicked after junking decade-old contractor TES-P/Sumitomo in 2012—is whether the two extra trains that have been added to the MRT3 line will translate into more glitches and accidents similar to those that have happened with increasing frequency this year.

And before any real upgrade, the DOTC or LRTA must first heed the clamor by its ignored private-sector partner, the MRT Corp. (MRTC), for a technical audit of MRT3 to ensure the safety of the riding public by finding out all the things that must be done ASAP to ascertain the entire system’s proper maintenance on the basis of the operational specifications under the government’s Build-Lease-Transfer (BLT) contract with MRTC.


A technical audit of MRT3 will be good not only for the riding public but for LRTA administrator Honorito Chaneco. A system-wide assessment will clearly show the condition of the MRT3 system at the time Chaneco took over.

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The eight (8) companies that expressed interest in bidding for the P1.3-billion LRT2 maintenance contract are Marubeni Corp. of Japan, DM Consunji Inc., Autre Porte Technique (APT) Global Inc., Telefonika Inc., Comm Builders & Technology Phils. Corp. (CB&T), Global Epcom Services Inc., Busan Transportation Corp. of Korea, and the tandem of Multi-Scan Corp. and Hyundai Rotem Corp. of Korea.

Two of these bidders—APT Global and Telefonika — are part of the four-member consortium (along with STIV and Pacific) that is LRT2’s current maintenance service provider.

APT Global is also the current maintenance service provider of the Metro Rail Transit Line 3 (MRT3), which expires in August.

APT Global took over this EDSA rail system’s M&O contract last year from the consortium of Philippine Trams Rail Management & Services (PH Trams) and CB&T.

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For their own good, Abaya and Chaneco should disqualify APT Global outright, considering that the proper course of action for Chaneco as MRT3 OIC is to review the performance of APT Global as the system’s interim maintenance service provider before its contract expires in August, if not cancel this contract at once amid questions surrounding its award and this firm’s ties to its predecessor PH Trams.

The DOTC/LRTA, or the MRTC, should properly bid out the MRT3 contract this time around to avoid a repeat of the irregularities that mired the award of interim contracts to the consortium of PH Trams-CB&T in 2012 and to APT Global in 2013.

What happens if APT Global wins either or both the LRT1 and LRT2 contracts and it turns out that the NBI report recommends the filing of criminal charges against any or all of the APT Global executives over either or both MRT3 scandals?

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APT Global and Ph Trams execs will likely be respondents in whatever cases the DOJ and/or the Ombudsman may file once they indict Vitangcol in either or both MRT3 rip-offs, in view of the alleged hanky panky that attended the award of the 2012 and 2013 M&O contracts; as well as the interlocking interests of these corporate officials and their Rychtar-alleged involvement in the $30-million scandal.

Aside from Soriano and Dela Cruz, the third of PH Trams’ six incorporator-directors was Wilson Devera, a defeated Liberal Party (LP) mayoralty bet, who, according to Rychtar, was Vitangcol’s “emissary” who tried to extort $30 million from Inekon’s Husek in exchange for this train manufacturer’s supply of 48 MRT3 light rail vehicles (LRVs).

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 To save themselves, Secretary Abaya and Chaneco should cancel APT Global’s about-to-expire contract and take legal action against its officers and those of PH Trams, to put a stop to the recurring glitches and accidents and avoid possible criminal prosecution for the highly anomalous award of the two contracts to PH Trams-CB&T and APT Global as successive interim maintenance providers.

In both instances, the DOTC did not submit the Terms of Reference (TOR) of the M&O contracts to MRTC before signing them with PH Trams-CB&T and APT Global, as so provided in their 1999 BLT accord.

Secretary Abaya and Chaneco have to explain the circumstances surrounding the award of the current M&O contract to APT Global, amid reports that:

* APT is under the control of the same PH Trams-CB&T group; and that

* PH Trams-CB&T’s contract was no longer extended in favor of APT Global in a shrewd bid to sweep the PH Trams issue under the rug when Vitangcol was already under heavy media fire as a result of Rychtar’s expose against him and De Vera.

Abaya and Chaneco must first explain speculations that the same Soriano-Dela Cruz-De Vera troika was the true beneficiary of APT Global’s contract on the basis of Dela Cruz’s connection to both consortiums.

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While still on the subject of criminal prosecution, Chaneco could avoid another criminal case, this time for possible technical malversation, by pushing for a review of his mother agency’s plan to use public funds for the purchase of 48 coaches from DOTC-chosen Dalian Locomotive and Rolling Stock Co. under the MRT3 capacity expansion project, in view of a Commission on Audit (COA) report questioning the allocation of P5.6 billion for two of the department’s major projects.

These are the P4.5 billion that the DOTC released three years ago to LRTA  for the MRT3 capacity expansion project and P1.1 billion to the Manila International Airport Authority (MIAA) for the rehabilitation of the Ninoy Aquino International Airport Terminal 1 (NAIA 1) despite the absence of the mandatory Program of Work (POW) and Cost Benefit Analysis for both transport initiatives.

With Congress reopening this month, our legislators would do well to question not only Abaya and Chaneco but also Interior and Local Government Secretary Manuel Roxas II, who was still DOTC secretary at that time when the DBM augmented his Department’s funds for the MRT3 expansion program via DAP—on the status of this P4.5-billion outlay, during the committee-level budget hearings for the DOTC and DILG on the would-be proposed 2015 national budget,

The 2011 COA report, which was released only in July last year, observed that a POW “is an indispensable requirement that indicates the scope of works to be done, equipment/materials/items to be procured, the total project cost and the basis of the Approved Budget for the Contract (ABC).”

The Cost Benefit Analysis is also indispensable, according to COA, so the DOTC could ascertain whether the projects would be beneficial not only to the government but to passengers as well.

Moreover, this same COA report noted: “Pursuant to the aforesaid provision of RA 9184, a procuring agency may resort to a Procurement Agent, following the guidelines issued by the GPPB to implement the above provision. The guidelines stated above have not been issued, per inquiry with the Technical Support Office of the GPPB and research made on the GPPB website, by the Audit Team,

“In the absence of the guidelines to implement the provision of Section 53.6 of the IRR of RA 9184, it may be inferred that the procuring entity cannot resort to the procurement through a Procurement Agent.”

Chaneco should bear in mind that the state auditors said in this 2011 report that the non-compliance with procurement procedures affected the validity of the DOTC-LRTA MOA and that they had virtually reprimanded the DOTC on this matter in telling the Department to “observe the required procedures… and enforce strict compliance with applicable laws, rules and regulations prior to the transfer of funds.”