Take a train check | Inquirer Business

Take a train check

/ 12:00 AM January 05, 2016

Nobody but nobody—not even our leader Benigno Simeon, aka BS —could tell our beloved Transportation Secretary Joseph Emilio Abaya to sign an important document for the sake of the 600,000 or so human beings riding the Edsa MRT-3.

The document was the “notice of award” for the P3.8-billion three-year contract for the maintenance and rehabilitation of the MRT-3, maltreated and neglected in the past five years of the Aquino (Part II) administration.


Unceremoniously, the Department of Transportation and Communications just gave away the lucrative contract to a consortium made up of South Korean firm Busan Transportation and some unfamiliar local firms.

The DOTC timing was perfect, with the awarding set for Dec. 23, or two days before Christmas Day, a practice known in business as “blind spotting,” meaning, just when nobody was looking, with everybody preoccupied with the holidays.


The thing was our adorable DOTC head did not even sign the document, and the signature on it belonged to undersecretary for operations Edwin Lopez, who was Abaya’s chief of staff when he was still in Congress.

Speculations thus were rife in business on why our endearing Abaya, as the top honcho of the DOTC, did not even bother to sign such important papers related to the fat P3.8-billion contract involving one of three problematic mass transits in Metro Manila.

One possibility, of course, was that Abaya was only cautious,  knowing that he could be hailed to court for the contract, and he just had to try the SYA (“save-your-ass”) move.

Did it mean that our valiant Abaya could not even be man enough to sign the contract himself?

You see, the entire DOTC process in the selection of the Busan consortium had more holes than a strainer, having been awarded without public bidding, to start with, under the pretense that it was an “emergency negotiated procurement.”

In other words, the entire nation of 100 million people needed the contract so badly  that the DOTC must simply handpick the group it would reward with almost P4 billion of our tax money.

According to our contacts in the DOTC, while Usec Lopez (who signed the deal) could be considered an alter ego of Abaya, the head of the DOTC negotiating team was actually none other than Usec Rene K. Limcaoco.


The Busan consortium gave its official address as 121 Le Mariche Subdivision, E. Rodriguez Sr. Ave., Quezon City, while its authorized representative was a certain Eldonn Ferdinand Uy, at least officially on paper.

From what I gathered, Usec Limcaoco personally met one-on-one with the representative of the Busan consortium, but not the one listed in the Busan documents.

Apparently, the more effective but unlisted representative of the consortium was a certain Eugene Rapanut, said to be one of two brothers who, in the past few years of the Aquino (Part II) administration, cornered deals after deals in the DOTC.

Many in the DOTC knew Rapanut as the deal maker for the mainland China company called Dalian Locomotive and Rolling Stock Co. that bagged the P3.7-billion contract for the supply of MRT coaches.

Supposedly, the DOTC would receive those coaches from Dalian before the end of the term of our leader, BS, in June, but our info was that the Chinese company took a little rain check on its delivery.

Dalian has so far shipped to the DOTC only a shell of a prototype, without any machinery or engine.

It was also Rapanut who supposedly arranged the P1.33-billion maintenance contract for LRT-2 (on Aurora Boulevard), which the Light Rail Transit Authority (LRTA), under the DOTC supervision, awarded to another group also headed by Busan.

By the way, the NGO called National Coalition of Filipino Consumers, or NCFC, has filed a case before the Ombudsman, accusing the LRTA of cooking the terms of the project to favor the Busan-led group.

The DOTC, anyway, insisted on awarding the big fat P3.8-billion MRT contract last week to the same Busan group of South Korea, leaving out the obligatory public bidding, on the strength of this thing called “emergency procurement negotiations.”

From what I gathered, the DOTC  wrecked such an otherwise legitimate process with some obvious maneuvers to favor one group.

The DOTC figured there was an “emergency” to award the contract right away, and so it had no other choice but to relax the rules. Well and good—we could agree that the DOTC must take some desperate move to hurry up and get high-quality maintenance for MRT.

The only thing was that the DOTC refused to accept the offer of German firm Schunk Bahn-und. Why? Well, the DOTC justification for eliminating the German firm was that it had submitted its offer rather late—by exactly 43 minutes.

The Schunk Group has been known internationally as a “technology” business with more than 8,000 employees in 29 countries, with annual sales of about 1 billion Euros, or more than P50 billion.

It could not be a fly-by-night company, similar to the previous contractors of the DOTC to maintain an important multibillion dollar investment like the MRT.

Let me see if I got this right—for the longest time, the more than half a million commuters of the MRT have been suffering from the pitiable service of the ill maintained MRT, and the DOTC could not wait for 43 minutes for an offer from a reputable German railway company, even with the “emergency procurement” mode already in place—was that it?

From what I learned, the DOTC “negotiating team,” the one headed by Limcaoco, eliminated the “emergency” offers one by one, doing away first with DMCI Holdings (with partner Hamburg Metro of Germany) by rejecting its proposal outright.

Then the same team, still with the “emergency” alarm sounding, simply disqualified Schunk Bahn-und on issue of punctuality, just because the DOTC itself was also hugely and solely responsible for the horrific traffic mess in the entire country.

Presto—without much ado—the Busan consortium became the one and only “qualified” group for the fat P3.8-billion contract.

To think, Busan Transportation was barely 10 years old, and the DOTC even asked for 15-year experience in rail system maintenance. Nice.

Guess what—from what I gathered, in the negotiations between Busan’s deal maker Rapanut and DOTC’s Limcaoco, the Busan side did not even have rail engineers and experts to convince the DOTC of its technical capability.

Basta, it was an emergency, and the DOTC figured it could get away with anything, perhaps even murder or plunder or whatever.

For the DOTC, the need for a maintenance contractor for MRT was so urgent that it had to commit P3.8 billion right away, although the same DOTC has been making do with some chop-chop maintenance contracts for more than a year already.

The DOTC divided the entire MRT maintenance into seven separate contracts for most of 2015.

That—despite its failure to award the most important maintenance job of all, which was the upkeep of the running stock, in two failed biddings in September 2014 and in January 2015, or almost a year ago.

If it was really an “emergency,” the DOTC should have done the negotiated deal almost a year ago, when the second bidding failed.

Perhaps the DOTC did not deem the MRT condition an “emergency” at that time because the 20 percent of the trains were running, and the half a million or so commuters were not yet calling for a revolution?

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TAGS: Business, column, conrado banal iii, light rail transit, maintenance contract, MRT 3, president Aquino iii, Transport
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