Will Mar Roxas reappoint DOTC’s Abaya?

There is one way to test whether you really want to vote for Mar Roxas next year. Ask him if he will reappoint DOTC’s Jun Abaya. 

We all know how close the two are. Abaya is also acting president of the Liberal Party. But having Abaya at DOTC for six more years is simply unimaginable.

But we know how the Liberals are. It is like a college fraternity, as we have seen in the last five years of P-Noy. Party members can do no wrong even if it is obvious they are doing nothing right. I will not be surprised if Mar appoints Abaya to an important post, not necessarily DOTC Secretary.

Given those monstrous traffic jams and MRT commutes from hell, Jun Abaya has to go. As a person, I like Jun. He is nice and very personable. But as DOTC Secretary, it is another thing altogether.

 If Jun Abaya retains his post, that means that cabal of lawyers who are his undersecretaries will remain as well. That’s the worst possible outcome for harassed commuters.

Lito Madrasto, a leader in the local construction industry familiar with DOTC operations, reported in his Facebook wall last Saturday “The LRT 2 West Extension towards Masinag still has to secure its ECC, tree cutting permit, existing public utilities relocations, acceptable solutions to existing pedestrian overpasses and approved traffic rerouting plan, to start the construction in earnest. DOTC’s brand of PPP is indeed promises, promises, promises!!”

Lito was also reminded by Facebook a year ago, he was “listening to DOTC USec Timi Limcaoco promising the bidding and delivery of their proposed 3rd NAIA Runway within the term of PNoy.” Lito recalled it “literally woke me up to smile and think ‘That’s a nice dream again.’” Of course Lito added, “up to now, the 3rd NAIA runway remains a dream!”

There was a time I thought they were just on a steep learning curve at DOTC, being lawyers rather than engineers. Now I have a worse suspicion. Could they be favoring some private parties? If they end up with jobs in a leading conglomerate after they leave office, that’s probably it.

Favoring certain parties seems obvious in the two common stations story. It might also be why Sec Jun tried to get the Budget department to set funds aside to pay for penalties to the LRT1 extension contractor even before the project could break ground and operations transferred to them.

P-Noy later said the Light Rail Manila Consortium (LRMC) has demanded P7.5 billion as compensation for the government’s supposed failure to comply with contractual obligations regarding the LRT-1 Cavite Extension. There had been no such demand, according to the LRMC officials. That means Abaya made a grave misrepresentation to his President. He lied or was he misinformed himself?

The LRMC, which is composed of Metro Pacific Investments Corp. (MPIC), Ayala Corporation, and Macquarie Infrastructure Holdings (Phil.), is the consortium which won the P65 billion LRT-1 public-private partnership project to build and operate the LRT-1 line extension from Baclaran, Manila to Bacoor, Cavite.

Sec. Jun Abaya also asked for the release of P500 million for the government ‘blocked account’ that will pay for future penalties to LRMC. Why is Abaya so sure there will be future penalties? “Failing to comply” on the part of government means DOTC failure, right?

Did the DOTC lawyers knowingly draft a contract so grossly disadvantageous to the government that Abaya is now waving the white flag even before the starting gun is fired?

Indeed, LRMC itself pointed out it is absurd for a private partner to make “claims” on the government even before the turnover. InterAksyon, the news website of ABC Channel 5, reported Manuel V. Pangilinan, chairman of Metro Pacific Investments Corporation (MPIC), the lead company in LRMC, told them he had no idea where the alleged claims came from, especially since the LRMC was being pointed to as the claimant.

MPIC, through Metro Pacific Light Rail Corporation, owns 55 percent of the LRMC. Ayala Corporation’s AC Infrastructure Holdings Corporation holds a 35 percent stake, while Australia’s Macquarie Infrastructure Holdings (Philippines) Inc. owns 10 percent.

LRMC president Jesus Francisco explained in no uncertain words there is yet no turnover, no full assessment, no claim. Mr Francisco said making any claim even before the turnover was premature because they had not yet been able to see the full condition of the 30-year-old LRT1 system.

MVP agrees. InterAksyon quotes him: “(W)e’re being made to appear that even before we take over the system, we’re already asking money from the government. Our right to claim has not yet ripened until we take over the system. And the basis for making any claim has got to be with some fundamental knowledge of the state of the system. Because how can we claim it’s only X number of LRVs (light rail vehicles) if we’re not there inside, right? It’s nonsense.”

Pangilinan also stressed there was no sovereign guarantee made by the government to the LRMC. “There’s no fixed guarantee, for example, 12 percent. No, this is not a guaranteed return. The government is not saying ‘I will guarantee you every year 12 percent no matter what, even if you don’t perform, even if your ridership is low.’ There’s nothing like that. The Republic did not say, ‘Come hell or high water, I will give you 12 percent.’ There’s no such thing,” he said.

Knowledgeable sources told me that unfortunately, MVP was kept in the dark. Sources point to a certain Kintanar from one of the consortium members who supposedly worked with Usec Timmy Limcaoco to convince Abaya to make the funds request from the Budget department.

My source said that was kind of devious because they successfully got Abaya to request for funding of claims without basis and also stupid because they think they could get away with it.

MVP told InterAksyon the government and the private sector had deliverables, as stated in their contract, and the LRMC was still taking a risk on the system. Francisco, on the other hand said the LRMC’s source of revenue was a “fare box” from the passengers.

“So the objective is to run our system as best as we can, and that will ensure that there will be ridership, and so we will have a continuous flow of fare box,” he said. “On the other hand we will have to spend a lot of money to keep the trains running, improve the trains.”

Francisco said the LRMC has to fix the existing trains, as the new trains are expected to arrive either next year or in 2017. Among LRMC’s deliverables were the modernization of existing platforms, the construction of eight new platforms and three intermodal facilities, and the replacement of train tracks. Safety and ridership experience were their top concern, Pangilinan said.

On the part of the DOTC, it is supposed to have monitored and maintained the LRT1 before the turnover, to acquire right-of-way, and to buy 120 LRVs. I doubt DOTC has done all that. Surely, LRMC will find the coaches and other assets in an advanced state of disrepair.

There are two phases: takeover of old system and the construction of the extension to Cavite. There is no date yet for the start of the construction, as this depends on the government’s delivery of right-of-way.

MVP promised “we’ll do our best, we’ll do our fastest to improve the safety. I think that’s our principal concern when we do take over, and of course, to improve the ridership experience of the passengers. But that will involve a whole mix of improvements that we need to undertake as quickly as we can.”

Meanwhile, Pangilinan said there would be no fare increase immediately after the turnover, as it had already been “substantially implemented by the government.” However, there was a “shortfall of 10 percent.” He said they would request for fare increases over time.

For MVP, this PPP must succeed because of the terrible traffic conditions in the country.

It would seem from MVP’s and Chito Francisco’s explanations, they are fully cognizant of the public service nature of that PPP project… perhaps, even more so than Abaya and Limcaoco.

That request for funds to cover penalties even before they got started was sneaky, so typical of DOTC. It is along the lines of the secret negotiations they are conducting for the maintenance contract for MRT3 exposed by my colleague Jarius Bondoc in this paper.

So, if Mar Roxas says he is retaining Abaya or tries to wiggle out of giving a straight answer to that question, you know you do not want to vote for him… unless you want six more years of girdlock or worse not just on EDSA but all over the country – in land, air and sea transport.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco