The Aquino administration should explain why the government must pay P7.5 billion to the private consortium that was awarded the contract for the Light Rail Transit Line 1’s Cavite Extension project, even if the company has not yet started any work and while the train service continues to deteriorate.
House independent bloc leader and Leyte Rep. Ferdinand Martin Romualdez questioned the reported penalty to compensate the consortium for unfulfilled obligations as part of its concession agreement.
“The officials of the Aquino administration owe us a reasonable explanation. Where is the concern for the public? The mass transport system is deteriorating. The project is yet to begin. And now the government is telling us that billions of pesos in people’s money would be spent for unfulfilled obligations?” he asked.
On the other hand, Bayan Muna party-list Rep. Neri Colmenares, House senior deputy minority leader, said they would ask Transportation Secretary Joseph Emilio Abaya Jr. to explain the penalty during the deliberations of the Department of Transportation and Communications’ proposed P43.5-billion budget for next year.
Colmenares said Abaya must disclose the truth now that President Benigno Aquino III has confirmed the P7.5-billion penalty.
“Abaya will be answerable. We will grill him during the budget hearing,” Colmenares said.
Buhay party-list Rep. Joselito Atienza and Abakada party-list Rep. Jonathan de la Cruz earlier asked Abaya to reply to the disclosure of Bagong Alyansang Makabayan of Abaya’s Aug. 7 letter to Budget Secretary Florencio Abad that the department would fail to meet certain obligations under the concession agreement.
Abaya reportedly asked the government to pay the consortium close to P7.52 billion from the P30-billion risk management program fund under the 2015 national budget to cover the unfulfilled commitments.
The agreement obligated the government to compensate the consortium of Ayala Land Inc. and Metro Pacific Investments Corp. for unfulfilled obligations.
Abaya said the letter obtained by Bayan secretary- general Renato Reyes Jr. was not signed by him.
The penalty included P5.41 billion for the government’s failure to comply with obligations relating to the operation and maintenance of the existing LRT-1 system and P106.67 million for failure to increase the minimum fare.
The government, through DoTC and Light Rail Transit Authority, signed a concession agreement with the Ayala-Metro Pacific consortium last Oct. 2, 2014 for the Cavite Extension project.
