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Tuesday, September 30, 2014

As one of the leader of Pnoy Administration and a DOTC Secretary, Mr. Emilio Abaya should have the thorough knowledge of all the Transportation businesses in the Philippines. Thus, MRT3 train Operations and Management (O&M) is one of its components that should be given total focus because of its complexity in any facets of the system.

The management of MRT3 ‘s tarnished with negativity wherein the Ombudsman will investigate alleged involvement of Transportation Secretary Joseph Emilio Abaya with officials accused of graft charges for alleged anomalous maintenance contract of Metro Rail Transit (MRT) with a local company.

Former MRT General Manager Al Vitangcol, who resigned last May, was also named in the charge sheet. He and five others faced separate charges of violating the Government Procurement Reform Act. Criminal and administrative charges have been filed against Abaya and 15 others. The contract with PH Trams-CB&T was allegedly awarded without public bidding.

The negative approached played by Al Vitangcol gave way to a more damaged consequences of MRT3 operations and management. The series of train system breakdowns and accidents proved that the decision made by the DOTC head was far from solving the present crisis.

Moreover, behind these problems, the relationship of MRTC and DOTC are not giving positive results to the riding public and to all Filipinos as a whole. Their movements to give total service to the public were created another series of battle between the two. Thus, the The Department of Transportation and Communications DOTC’s still aiming for a buyout to pacify the past and develop new management system. But, is it really the best solution so far?

MRTC and MRTHoldings through Bob Sobrepena, open up to the media about their side and the true status of MRT3. Thus, wanted to unify with DOTC but suggested a privatization of the operations and management of MRT3-EDSA train system.

The DOTC Secretary said about the investigation, “I have nothing to hide and no reason to fear any investigation. As always, we will cooperate fully with the investigation of the Office of the Ombudsman, just as we have with investigation undertaken by different branches and agencies of government, such as the Senate, the House of Representatives, and the National Bureau of Investigation. We remain committed to transparency and the eradication of corruption in government. Ultimately, it is the public that will benefit from the search for truth.”

He will face this investigation for sure, and Al Vitangcol should be investigated too, together with others. Records at the National Statistics Office showed that Vitangcol was related by affinity to Arturo Soriano, a representative of the PH TRAM-CB&T that negotiated the contract. Inekon Group Chief Executive Officer Josef Jusek and Czech Ambassador Joseph Rychtar accused Vitangcol of demanding a bribe in exchange for service and maintenance contract for MRT.

Only the truth will prevail and if found guilty, they should be penalized accordingly.

Another angle for this investigation is the eradication of public officials who are doing public contracts while lifting their vested interest at hand. In the past, majority of them were developing strategies to increase their wealth, adding to their powerful influences and sticking to their hollow political ideologies.

Wednesday, September 24, 2014

What You Should Know About MRTC And DOTC Controversy #ExpertWriter

In the onset of MRT3 Train Project at EDSA with the Metro Rail Transit Corp. (MRTC) and DOTC as the prime mover and unification of the on-going work through Build-Lease-Transfer (BLT) agreement. In BLT, the MRTC has the right to upgrade the train and system because Metro Rail Transit Holdings (MRTH) are the private investors behind MRTC to build the system and the government will operate it. So, whatever proposals of MRTC in the development of the MRT3, the government must unite hand-in-hand and enable to approve the same. This was not followed because government didn't agree to the proposals of MRTC, and it means DOTC did not follow the agreement.

The government bought 80% of the economic interests of MRTC, including bonds and other instruments representing future payments. This meant that government banks are now entitled to collect 80% of the ERP’s that government itself was paying. But it is not the same thing as buying ownership of the train system.

The original private investors, through MRT Holdings, still claim to be the ones who own the train system. MRT Holdings still own shares of MRTC and even managed to sue the Philippine government over the purchase of new trains.

MRT Holdings wants to be the one to purchase new trains because it thinks that it can charge the government another 15% for the installation of new passenger capacity. Government is right in rejecting this arrangement by the private investors. However, government officials involved in the purchase of trains also want to profit from the transaction through kickbacks. Remember the incident involving the Czech ambassador of Inekon and former MRTC Manager, Al Vitangcol?

The circus of purchasing trains became open; the government grabbed the opportunity to manage the MRT3 and told Al Vitangcol to resign. His resignation brought much controversy about the maintenance company he approved for the bidding process, the CB&T and PH Trams.

Since 2012, Bob Sobrepena was not on the loop for every transaction of the government. Also Sumitomo Maintenance Company was out who mastered the train operation and its system. Thus, train breakdowns began to show resulting to chaos that the riding public and media people are questioning the integrity of MRT3 train operations.

Again, another bidding for the maintenance company that APT Global won the one-year maintenance contract worth P685 million or around P57 million a month. It was during APT’s term that the worst MRT accident took place after one of the trains overshot the terminal in Pasay Taft. The government and the private investors (MRT Holdings) are to blame for the woes faced by commuters.

The Department of Transportation and Communications (DOTC) to take over the MRT3 and fix the problems of capacity and poor maintenance or as it’s suggested by Bob Sobrepena to talk it over in a meeting between the two.

A government buyout costing billions will be all for nothing, if it’s direction is re-privatization. Again, MRT3 take-over and returning to privatization’s not an option. The government must uplift the train services benefitting the taxpayers and whole economy.

Tuesday, September 9, 2014

For the longest time, MRT3 has been subjected to public hearing after the derailment last August 13, 2014. Senate was looking into the constant train breakdowns which caused the riding public to question the management of MRT3. Is it the DOTC, as what the majority of Filipinos believed to be at fault? Or, the MRTC who built up this project along with DOTC?

Really, if an ordinary Filipino doesn’t know the facts behind the MRT3-EDSA train project, it’s always Secretary of DOTC Jun Abaya will be haunted by these nightmares every day. The people behind MRTC didn’t have the courage to talk openly, while the DOTC was at the forefront of controversies.

From the onset of Vitangcol case up to this Senate probe, the future of MRT3 is like a roller coaster, or, a derailed roller coaster?

It’s not easy to manage the MRT3 train system, every manager knows that, but if the management doesn’t have the expertise to run the operations, then, it’s a disaster. If the DOTC and MRTC have divided notions of what the MRT3 management’s all about, then, more disasters may follow.

An Accession Undertaking and an Assignment and Assumption Agreement was executed which gave MRTC all rights and obligations to the Project agreements during the debt repayment period and establish MRTC as the Project borrowing entity.

The government on the other hand was among the entity to develop with MRTC by the BLT Agreement which governs their relationship in building the said MRT3 Project. As all the terms in those prior agreements were superseded by the provisions of the BLT Agreement.

Build-Lease-Transfer Agreement is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.

So, this BLT Agreement is under the MRTC and DOTC to provide the riding public the total services needed to operate the train system at MRT3-EDSA. Why all of the sudden, breakdowns started to appear at all angles, wherein the DOTC or MRTC cannot give solutions to these problems?

Is it because in October 2012, the maintenance contract was awarded to PH Trams and CB&T? And, in September 2013, the contract was awarded to APT & Global Inc. by the DOTC and will expire on Sept. 5, 2014, and another bid will be held?

Maybe because the latest company that the DOTC was approved didn’t have the proper expertise to run the maintenance problems at MRT3, or, the train system’s old and needed changes?

Secretary Jun Abaya had the expertise to manage the MRT3? In addition, the MRTC had the knowledge of all the DOTC’s transactions?
More questions could be asked for these people who are managing the MRT3 in which, more and more Filipinos were affected by this roller coaster decision-making. Nevertheless, it’s the DOTC that suffered more than the MRTC, in the eyes of the public.

The Senate hearing could be the wakeup call for DOTC people to prioritize the welfare of the riding public than their revenues. It’s their duty to extend their time to study, learn, and apply the proper ways to manage the train system.

Hoping for Senator Grace Poe and other Senators to build bridges with DOTC head Jun Abaya in continuing the total services to be given to Filipinos; if the plan of the government to acquire the MRT3 management. At least, if the buyout will push through, the government will give much full attention to these problems of MRT3-EDSA.

Monday, September 1, 2014

Two Dragons Are Fighting For MRT3-EDSA? But Why And Who Is The Winner? #ExpertWriter

As the story of the Department of Transportation and Communications (DOTC) and Metro Rail Transit Corp. (MRTC) continues, and while other problems evolved continuously, still, the train system continued its never-ending breakdowns. Even the Inspection Audit of Train experts from Hongkong had nothing to give much positive solutions from the two “Dragons” fighting each other.

How could the train operation be properly managed when DOTC and MRTC were throwing “Dragon’s Fire” with each other? The riding public, employees, media and ordinary people in the Philippines and abroad cannot fathom what’s going on behind the deal of this MRT3-EDSA Project.

“The government is looking at striking a compromise with MRTC within the third quarter to allow the government to buy back full ownership of the 17-kilometer mass transit system along EDSA. The agreement involves the buyout of MRTC’s shares in MRT3. The government will allot P55 billion to P56 billion to buy out the private owners of the Metro Rail Transit Line 3 (MRT 3),” Transportation Secretary Joseph Emilio Abaya said.

Well, of course, because of the complex story behind this project, the government wanted a buyout to elevate the train system operations and maintenance, to augment with the devastated management image through the DOTC.

Another problem the government’s facing: MRTC filed an arbitration case in Singapore against the Philippine government in January 2009 due to failure to pay equity rentals in a timely manner, while another case was filed against the government recently over the decision of the DOTC to award a P3.8 billion contract to CNR Dalian Locomotive & Rolling Stock Co. of China for the supply of 48 brand new light rail vehicles for MRT3.

The government requires the arbitration blessing from Singapore Court, and the DOTC is confident in the completion of the planned buyout as the government has enough seats in the board of MRTC. Until when, this blessing be given?

Since 2009, the DOTC-MRTC relationship was already becoming damaged and MRTC filed an arbitration suit against the Philippines in Singapore because of the delayed rental payments.

The government said it has paid MRTC P35.2 billion since 2000. Throughout that time, MRTC did not acquire new coaches or upgraded key systems of the line, like the crucial signaling and ticketing systems because, it said, the government did not pay its rent promptly.

The following year, President Aquino issued orders to expand the MRT-3 capacity by buying new coaches but the build-lease-transfer agreement gives the owners, MRTC, the right of first refusal.

The government must remember always that this MRT3 Project were agreed upon through Build-Lease-Transfer (BLT) Agreement in 1997 that didn’t allowed MRTC to do its job of choosing the M&O contractor for this EDSA rail line.

According to Wikipedia, The BLT Agreement was signed by DOTC and Metro Rail on August 8, 1997 and amended on October 16, 1997; it constitutes a restatement of similar agreements dating back to the first such contract, which was signed on November 7, 1991. That agreement was restated on April 22, 1992, and the restated agreement was supplemented on May 6, 1993, and amended on July 28, 1994 and May 1996. Another restatement was signed on October 3, 1996. All the terms in those prior agreements were superseded by the provisions of the BLT Agreement.

The BLT Agreement governs the relationship between Metro Rail and DOTC during the Project’s two major phases, construction and revenue service. During the construction phase, Metro Rail was obliged to construct the Project (Phase 1) and to complete that construction by a certain date (the “Date Certain”). The construction was to be accomplished in accordance with the specifications and drawings approved by the DOTC and the completed system capable of achieving certain capacity requirements.

Metro Rail was also obligated to provide all equipment that was to be used in the system, including the rail vehicles. The DOTC’s obligations during the construction phase included granting Metro Rail access to the Project site (including relocating squatters and other persons from the Depot area) and ensuring that certain work to be performed by the Department of Public Works and Highways (“DPWH”) was completed properly and on time. In addition, the DOTC accepted the responsibility for certain events that could delay completion of the system. Should such events occur, DOTC would be responsible for paying the costs of the event and the delay it causes, and the date by which Metro Rail is obliged to complete construction would be adjusted.

After completion, Metro Rail was obligated to lease the system to DOTC, who would operate the system, with Metro Rail providing the maintenance. DOTC was required to make payments of Rental Fees to Metro Rail, and these were broken down into several different portions. One significant part was intended to repay the loans taken out to finance the Project (“Debt Rental Fees”).

Robert John Sobrepena, was Metro Rail's Chairman and CEO, overseeing all aspects of the Project from Financing to Construction and turn over. Laurence Weldon, President and Chief Operating Officer, oversaw all aspects of construction of the Project. Mr. Weldon was previously connected as project manager of the Los Angeles “Blue Line” Rapid Transit Project before July 1995. In Manila he was supported by Carlos 'Karl' Quirino, Chief Financial Officer, Robert Ball, Vice-President of Technical Services, William Lathrop & Walter Mergelsberg of the Project Management Team and Harry Redstone and their teams for the engineering aspects of the Project.

Remember Robert John Sobrepena, the Chief Executive of Camp John Hay's private operator of CJHDevCo in Baguio, wherein the state-run Bases Conversion and Development Authority (BCDA) filed malversation charges against him?

Really, the knots between these contracts will be of the same disgusted attitude towards him. He fought the “Dragons” with all his might, but he cannot survive for long because of his captivity in a “Dragon’s Lair.” The fighting continued its negative setback for DOTC through the Aquino Administration which also damaged the MRTC image.

The Filipino people wanted a properly managed train system in MRT3-EDSA, but how, when the two Dragons were fighting each other?

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