TRANSPORTATION Secretary Joseph Emilio Abaya said Sunday it didn’t matter that none of the Filipino partners in the consortium that was awarded the P4.25-billion maintenance contract for the Metro Rail Transit had any experience in railway maintenance or operations.
Reacting to criticism from senatorial candidate Leyte Rep. Martin Romualdez, Abaya also denied that the negotiated contract was a “sweetheart deal.”
Romualdez had earlier challenged the government to be transparent about the P4.25-billion deal that was awarded without public bidding, and expressed concerns that not a single local partner of the Korean company Busan Transportation Corp. was involved in transport operations. He also called for a congressional investigation into the deal.
Busan’s partners, Edison Development & Construction, Tramat Mercantile Inc., TMICorp. Inc., and Catan Corp. are into construction, agricultural equipment, trading and plumbing, respectively.
But in an interview on radio dzBB, Abaya said the Philippines had no companies that were into rail system operations and maintenance, since the country’s urban rail system was “relatively new compared to other countries.”
The MRT began operations in December 1999, while the LRT started in 1984.
“If you could name me at least five companies involved in rail maintenance—you cannot come up with five names,” Abaya said. “If you’re looking for Filipino companies, you cannot name five or even three or four that have been involved in rail maintenance.”
Abaya’s defense of the maintenance contract came days before Busan is expected to take over the MRT’s maintenance operations on Tuesday.
In questioning the deal, Romualdez said the Department of Transportation and Communications needed to justify the awarding of the maintenance contract because it failed to observe the bidding process for such a large amount.
He also hit the government for failing to protect the public interest by entering into a sweetheart deal that was “obviously inimical to the interest of the government and the taxpayers.”
“It is incumbent upon the government to spend taxpayers’ money wisely. We should not condone wasteful spending for MRT3 without really improving its service since commuters still have to cope with higher fares, longer queues, and frequent breakdowns that threaten public safety,” Romualdez said.
The government earlier announced that the P4.25-billion deal awarded to the Busan consortium would take effect Jan. 5 and run for three years.
The DoTC said it went for a negotiated deal because there was an “emergency situation” after two previous public biddings had failed.
Abaya emphasized that Busan would be involved only in maintenance and not in operations.
“The government will still operate the MRT,” Abaya said.
From the start, Abaya said, the government wanted a “single point of responsibility” and a long-term maintenance provider.
“The Busan [consortium] takes over the maintenance operations on Jan. 5. There was no secret about it, no miracles or under the table transactions and we worked on the takeover during the holidays so as not to cause any more delays,” Abaya said.
The contract was awarded to Busan to avoid multiple contracts with different providers, he said.
Like the previous maintenance provider APT Global, Busan will be heavily penalized if it reneges on the terms of its contract.
In fact, he said, APT Global had lost almost all of its billings due to heavy penalties.
Because the MRT is getting old, Busan would be given six to eight months to build up its inventory of spare parts.
Congress, he added, has also allocated funds to rehabilitate the MRT’s escalators, elevators and restrooms, as well as its signaling system and rails.
In the same interview, Abaya admitted that the government has no choice but to allow an annual 5-percent increase in LRT fares due to inflation, but said fares would still be subsidized by the government.
Abaya’s disclosure came after Romualdez said the government must provide assurances against “hidden fare hikes” in the city train services.