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

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?