“Emergency!” Transport Sec. Joseph Abaya gave that excuse for his secret talks for a whopping P4.25-billion rehab of the MRT-3 commuter rail.
“Suspicious!” bidding and railway experts at once branded Abaya’s ruse. How can there be an emergency for a long-term rehab, they asked? How can there be an emergency for supplies that were budgeted as far back as two years ago?
Abaya invoked “emergency procurement” Wed., when this column bared the P4.25-billion closed-door negotiations. Previously kept secret, the rehab was not posted in either his DOTC website or PhilGEPS (Government Electronic Procurement System).
“Emergency can be justified only for works that will take less than a year,” a DOTC insider said. “But the P4.25 billion, based on Abaya’s secret terms of reference (TOR), are for two and three years. In such cases, the law requires public bidding.”
“A procuring agency can only resort to negotiation in case of two failed biddings,” a state bureaucrat added. “But they cannot change the TOR, as they did here.”
Abaya invited selected groups to secret negotiations starting last Tuesday. He did not name them when forced to admit to The STAR the secret talks. He only mentioned “established, well-reputed international expert groups in the railway maintenance.”
MRT-3 insiders said the invitees included the ruling Liberal Party point man in PH Trams and Global Epcom, under whom maintenance deteriorated since 2012. The LP officer was assisted by two brothers involved in DOTC supplies and works for aircraft and rails.
In the talks, they represented a Filipino-Korean consortium also involved in MRT-3’s sister operation, LRT-2. Abaya is the LP acting president.
Abaya’s invitation was contained in a 447-page prospectus, entitled “Negotiated Procurement for the DOTC-MRT3 Maintenance Service Provider, 43 LRV (Light Rail Vehicle) General Overhauling, and Total Replacement of Signaling System.” It has a total budget of P4,251,900,000, broken down into:
• Maintenance, parts and services, P2,270,400,000, under a three-year MYOA (Multi-Year Obligational Authority);
• General overhaul of 43 LRVs (light rail vehicles, or coaches), parts and services, P1,013,560,000, three years, from the 2015 General Appropriations Act;
• Total replacement of the signaling system, goods and services, P900,000,000, 24 months, from the 2014 supplemental budget; and
• Additional maintenance works, goods and services, P67,900,000, six months, from the 2015 GAA.
Two past biddings for the long-term maintenance had failed. This could pave the way for negotiated contracting. “But Abaya changed the TOR in combining the maintenance with the LRV overhaul and the signaling system supply,” another insider said. This requires a new bidding, not a secret negotiation.
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Rep. Neri Colmenares (Bayan Muna party) said he will require Abaya to disclose the negotiating parties during forthcoming hearings on the DOTC budget for 2016. “Nothing may be done in secret, certainly not for that amount,” he explained. “It should be transparent.”
Colmenares recalled grilling Abaya in late 2014 on the long-term maintenance, overhaul, and purchase of signaling system. He questioned Abaya for asking for the very same amounts in the regular GAA and in a supplemental budget. “That was already irregular. Now he’s negotiating in secret?” Colmenares remarked.
Rep. Jonathan dela Cruz (Abakada party) found the P4.25 billion a cause for congressional inquiry. “Abaya as always comes out with the most outrageous justifications,” he said. “Did he not create the mess to begin with by hiring Mickey Mouse maintenance firms? Now he’s crying ‘emergency’.”
Colmenares said the DOTC is conditioning commuters and taxpayers to an emergency. “Then they can force through the negotiated contract, with people just shrugging their shoulder.”
Abaya, in invoking emergency, said: “We’re targeting to award the contract within the year, and to have the new maintenance provider begin its services in January.”
Colmenares found the timing suspicious, 2016 being an election year, during which ruling admins can draw kickbacks for campaigns. A contracting ban always starts in mid-Jan., 120 days before Election Day.
He recounted how Abaya used “emergency” before. That was in Oct. 2012, to justify secret talks for the P535-million, ten-and-a-half-month maintenance deal with PH Trams. Before that, the DOTC suddenly terminated the 12-year maintenance service of Japanese giant Sumitomo. Without a daily maintenance contractor, “they suddenly signed a half-billion-peso deal with no public bidding,” Colmenares said.
PH Trams was only two months old then, undercapitalized at only P625,000, with no experience in railways. Two of its five incorporator-directors turned out to be LP fundraisers for Pangasinan: chairman Marlo dela Cruz and Wilson de Vera. A third, Federico Remo, was a high executive of a government financial institution. A fourth, Manolo Maralit, was a long-time DOTC contractor. The fifth, Arturo V. Soriano, Pangasinan provincial capitol accountant, is an uncle-in-law of then-MRT-3 general manager Al Sanchez Vitangcol II.
Their relation by affinity exposed in this column in May 2014, Vitangcol was forced out of his post.
Abaya had signed PH Trams’ contract and two renewals. He also signed that of Global Epcom, the subsequent maintenance firm of which Marlo dela Cruz also was “authorized representative.” Yet the Ombudsman cleared Abaya of graft charges, indicting only dela Cruz, Soriano, Vitangcol, the PH Trams incorporators, and the DOTC negotiating panelists.
“That is why Abaya is repeating the old modus operandi with impunity,” a DOTC source said. “He is immune from suit.”
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Sen. Grace Poe said: “The DOTC should seriously study the legality of this planned emergency negotiated procurement. We cannot afford further prolonging the suffering of the MRT riding public through a mode of procurement that could be validly questioned in court.
“This is the same type of procurement involving the maintenance contract that brought about the sorry state of the MRT to begin with. Consider the enormity of the project cost and the intricacy of the entire procurement, comprising four equally important components. These have all not undergone two failed biddings or are prompted by current calamities as the law provides to justify ‘emergency.’ It would be legally and morally desirable to subject them to honest public bidding that is transparent with all technically qualified bidders invited to join.”
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