The Department of Transportation (DOTr) is studying an arbitration case against CRRC Dalian Co. Ltd., the Chinese train manufacturer that allegedly delivered non-compliant trains for the Metro Rail Transit Line-3 system.
“We have a slight issue with it because the trains that were delivered to us appeared not in conformity with the agreed terms. They were heavier,” DOTr Secretary Jaime Bautista told reporters.
“The reason why we don’t like to operate those trains at this time because of the possible higher maintenance costs, and maintaining the rail line might be affected also. It can result in higher operating cost also,” he said.
Bautista said the government was also considering imposing a penalty against the Chinese train manufacturer.
“We could bring up liquidated damages, because they did not meet our requirements. But of course, it is subject to agreement with them. We need to talk with them. We should be fair and reasonable in terms of what should be collected from Dalian,” Bautista said.
Bautista said this could possibly lead to an arbitration case. “In fact, this is where I see our problem with Dalian train could lead to,” he said.
He said the government was particularly eyeing to file an arbitration case in Singapore.
The Transport chief said, however, Dalian was working on solutions to make the trains usable on the MRT-3 line.
“Perhaps, if we will be satisfied, we can agree with them to operate the Dalian train,” he said.
Bautista also said the winning bidder for the privatization of the operations and maintenance (O&M) of MRT3 could eventually consider using the Dalian trains.
“We have to involve the private sector… They could come up with solution on how to operate [the Dalian trains] despite the weight,” he said.
Bautista said the government plans to bid out the privatization of MRT 3 by the second or third quarter of 2025.
The government operates MRT 3, while the MRTC, owned by Metro Rail Transit Holdings II Inc. led by businessman Robert John Sobrepeña, was responsible for the design and construction of the EDSA rail transit system.
