The Department of Transportation has committed to terminate the maintenance service contract of Busan Universal Rail Inc. with the Metro Rail Transit 3 after its officials were confronted by a party-list lawmaker of the various anomalies surrounding the deal.
In its budget presentation before the House of Representatives’ committee on appropriations, chaired by Davao City Rep. Karlo Alexei Nograles, DOTr Secretary Arturo Tugade and DOTr Undersecretary for Railways Cesar Chavez told lawmakers they would be terminating BURI’s P3.81-billion maintenance contract for MRT 3.
This came after Pwersa ng Bayaning Atleta Party-list Rep. Jericho Nograles came out with a series of exposé on the sloppy work of BURI including the installation of fake spare parts on the train’s safety equipment for its signaling system.
During the hearing, Nograles confronted the DOTr officials with a presentation detailing the various anomalies that he said should already prompt the immediate termination of BURI’s service contract.
“BURI is not a joint venture. I’d like to emphasize on that. I asked so many cooperate lawyers. Why am I emphasizing that? Because the contract is supposed to be with joint venture,” Nograles said in front of Transportation officials headed by Secretary Arthur Tugade.
“The one that won the contract, the negotiated contract was supposed to be commonly known as the ‘Joint Venture of Busan.’ When in fact, the government, the outside contract was the DOTC [the forerunner of the DOTr] and these guys. I don’t see Busan Universal Rail Inc. there. Therefore, BURI is receiving taxpayers’ money without having any legal standing,” Nograles said.
By “these guys,” the PBA lawmaker meant the four corporations that comprise BURI.
“None of these four corporations have any train experience,” Nograles said.
Worse, Nograles said that BURI has already collected P750 million in taxpayers’ money from this contract.
Earlier, Nograles established that neither former Transportation secretary Jun Abaya nor Tugade signed the P3.8 billion, but a mere undersecretary in Edwin Lopez.
The law provides that the approving authority of contracts worth P500 million and up should be the Department Secretary.
“My question is why should we continue the BURI contract despite it being unsigned, despite the overpricing, despite the fake parts, despite the underperformance, despite all the COA (Commission on Audit) reports received by the DOTr, despite all the lies that have been presented to Congress?” Nograles asked the DOTr officials.
Chavez, on the other hand, told Nograles and the appropriations committee that they have actually moved for the termination of the maintenance contract.
“It appears that [Nograles’s] presented data is correct,” Chavez said, adding that “the Office of the Undersecretary for Railways has already signed a position paper that calls for the termination of the contract with BURI.”
“This matter is now with the Office of the Undersecretary for Legal and is being reviewed,” said Chavez.
Tugade later said that he shared Chavez’s position. However, he just wants to observe the legal process in order to avoid trouble.
“I am making the process take its effect. My personal position there is already replicated in the position paper of the Undersecretary for Railways…it is to terminate. I’m just making sure to look at the local processes so that we won’t have any unwarranted legal complications, so that unwarranted legal surprises won’t come,” he said.
DOTr Undersecretary for Legal, lawyer Reinier Yebra also chimed in. “Theoretically, if a contract is signed by one who was no authority, it should be unenforceable.”
Yebra said he received the position paper last July 20. “We will endeavor to finish it as soon as possible,” he told the lawmakers.
However, the DOTr was asked to decide on the fate of the BURI contract before the plenary debates on the proposed P3.767-trillion national budget for 2018. The debates are scheduled to begin on Sept. 4.
Nograles also asked Chavez what the DOTr intens to do in case the controversial contract gets cancelled, as this would leave the 17-year-old MRT-3 without a maintenance service provider.
“In the event that this is cancelled, the way it’s been done in the past, there is a maintenance transition team that should be created to address the immediate procurement of a qualified contractor,” Chavez said.
“The maintenance transition team will be composed of the DOTr and MRT3. In the event the team is created, we will immediately procure the next service provider,” he said.
