Korean firm asks DOTC to scrap P1.7-B AFCS bidding

MANILA, Philippines - The government’s proposed P1.72-billion single contactless ticketing system for the Metro Rail Transit (MRT) and Light Rail Transit (LRT) could hit a snag after a Korean consortium asked the Department of Transportation and Communications (DOTC) to cancel the bidding.

Kystek Corp. vice president Dong-ho Yu said in a statement that the DOTC should cancel the bidding for the proposed P1.72-billion Automated Fare Collection System (AFCS) as the company has a pending proposal before the agency.

Kystek said it has a pending accepted and approved unsolicited proposal on Unified Ticketing and Clearing System (UTCS) for the MRT and LRT with the DOTC since Nov. 21, 2011. It has been awaiting the awarding and signing of their contract with DOTC for more than a year now.

Kystek, a Philippine based corporation with 40 percent Korean ownership, said the DOTC merely adopted the company’s unsolicited proposal on UTCS including their feasibility studies in proceeding with the competitive bidding on AFCS.

It warned that the DOTC would violate the Republic Act 6957 or the Build Operate Transfer (BOT) law as amended by RA 7718 if it pushes through with the bidding process for the AFCS project.

Under the BOT law, the rules on unsolicited proposal as opposed to competitive bidding, is governed by the Swiss Challenge route wherein an entity who submitted an accepted and approved proposal would be considered as an original proponent who has the right to match any other offers by prospective bidders.

In the absence of any bids, the proponent of the unsolicited proposal would be awarded the project.

He said Kystek intends to bring into the Philippines two of the largest conglomerates in Korea led by Mirae Assets Securities Co. Ltd. and KT Networks for the project.

Mirae Asset Securities is an investment banker and equity provider with total net worth of $2 trillion, assets amounting to $15 trillion and sales of $2.2 trillion while KT Networks – a subsidiary of the Korea’s largest telecommunication company – has vast experience in AFCS collection system and RF smart card system with a total net worth of $51 billion and assets of $213 billion.

 â€œAmong other things required for RF Smart Card system, security technology is the most important. Kystek has a team who has expertise in Cryptography and security system design with more than 10 years of experiences with major players in Korea and the US and has been working tightly with KT Networks team to design the best secured payment system here in the Philippines,” he added.