Jarius Bondoc | Philstar Global | October 13, 2017

Is the MRT-3 being billed anew for train parts it already paid for long ago?

Persistent info from railway sources is that crucial spares for which the Dept. of Transport is being billed are "balikbayan." That's the moniker for the racket. Parts already paid for, and so duly stocked in the warehouse or installed in trains, are made to look newly purchased in order to collect again from the government.

The scam works when the railway warehouse or operation man colludes with the parts supplier or maintenance contractor to defraud the government. Supporting papers are doctored to facilitate fraudulent multi-collections.

The racket was discovered a decade ago at the Light Rail Transit Authority and the Philippine National Railways. By then the government already had lost millions of pesos.

The MRT-3 was thought to be insulated from "balikbayan" then, as it was privately operated and maintained. But the racket could have migrated there after the DOTr (formerly DOTC) took over MRT-3 operation and maintenance contracting starting 2012. It has since had a succession of favored inter-related contractors: PH Trams, Global Epcom, and now Busan Universal Rail Inc. (BURI).

BURI presently is billing MRT-3 P4 million for two signaling components recently installed on coaches Nos. 06 and 63. Called vehicle logic units (VLUs), the gadgets are supposed to electronically control train speeds and automatically brake them to avert collision.

But the MRT-3's original signaling supplier Bombardier Ltd. of Canada reported to the DOTr that BURI has not purchased from it any part or equipment of late. Its audit also showed that the VLUs had been modified and the circuitry tampered with.

Usec. for Rails Cesar Chavez has been withholding P59 million in BURI collections pending submission of pertinent documents. For spare parts from abroad, those include supplier's invoice, bill of lading, factory inspection report, warranty, certificate of origin, delivery receipt, certificate of acceptance, and property invoice – as required by the Commission on Audit.

The P4-million VLUs are among the reimbursements withheld from BURI for lack of supporting papers. The units came from the local shop Diamond Pearl Development and Marketing Corp., which is not an authorized Bombardier distributor. It is owned by Marlo dela Cruz, a Liberal Party campaigner-fundraiser in Pangasinan, also behind the series of MRT-3 maintenance outfits.

Chavez suspects the VLUs were cannibalized from other coaches. From records, the 12-year-long maintenance firm Sumitomo of Japan had left behind $17 million in spare parts when PH Trams suddenly grabbed its contract in Oct. 2012. PH Trams and later Global Epcom hardly purchased new parts but merely depleted Sumitomo's left-behinds, leading to MRT-3's rapid deterioration.

Notably among Sumitomo's parts inventory was a VLU purchased in Swedish krona equivalent to P2.85 million.

Contracted for 2016-2018 BURI too is being accused of stinting on crucial spares. Since early 2017 MRT-3 has been suffering twice to thrice daily breakdowns, due to signaling and train failures.

Forty-eight new coaches from China's Dalian Corp. could have saved the day for MRT-3. But the trains are inoperative because overweight and so could crush the rails. They were delivered late; without motors and signaling; and untested for 5,000 km at the factory for safety, reliability, and durability. The DOTr is contemplating returning them to China.

Sen. Grace Poe wants former DOTr officials sued for purchasing from unqualified Dalian, for which the government has paid P526 million so far. As well, for contracting the unqualified BURI, to which the government has paid P650 million to date.

Eugene Rapanut, reportedly an LP-Ilocos Sur, had brokered the Dalian deal in 2013. He is now BURI's managing director.

Ombudsman Conchita Carpio Morales, appointed by President Noynoy Aquino, LP chairman, has yet to investigate the anomalies. Her brother Lucas Carpio is BURI's lead lawyer. Last month BURI charged Chavez before the Ombudsman for recommending the termination of its P3.8-billion contract.