Palace questions Czech envoy’s motive

Raises sourgraping slant over lost MRT contract

THE Palace on Monday questioned the timing and motive of Czech Ambassador Josef Rychtar, who accused the head of the Metro Rail Transit of trying to extort $30 million from a Czech company Inekon in exchange for a train supply contract.

“That issue came out a year ago. I don’t know why Ambassador Rychtar is trying to revive thi s issue,” presidential spokesman Edwin Lacierda said.

At a press briefing, Lacierda was asked if Rychtar was blowing the whistle on a corrupt practice or merely sourgraping over a lost contract.

Money talk. Metro Rail Transit general manager
Al Vitangcol tells Senator Francis Escudero his
agency’s “financial absorptive capacity” even as
congressmen called for Vitangcol’s resignation
amid the MRT train acquisition scandal involving
a Czech company. EY ACASIO
“It may be one, it may be two, it may be both...The question of whether this is sourgraping is valid,” he said.

While Lacierda said the government will not declare Rychtar persona non grata, he admonished the ambassador to cooperate with the probe intiated by the National Bureau of Investigation.

“The important thing is, if you have an allegation, if you’re willing to face and present evidence of those allegations, then our investigative bodies are there to investigate. Until such time that you are prepared to present evidence, we cannot work on statements coming from media. That’s the reason why we want affidavits coming from those people who have knowledge,

if at all, of any alleged wrongdoing,” Lacierda said.

On Monday, Rychtar and Joseph Husek, the chairman and chief executive of the Czech company Inekon, informed Congress that they were prepared to testify about the extortion attempt by Metro Rail Transit (MRT) general manager Al Vitangcol III and other Liberal Party officials.

Rychtar had earlier cooperated with the NBI and submitted an affidavit to the House of Representatives in February.

He did not, however, submit an affidavit to the Department of Transportation and Communications (DOTC) for its administrative investigation, prompting Secretary Joseph Emilio Abaya and Lacierda to blame the envoy for the probe’s termination.

“There was no cooperation on the part of the ambassador. Just because it [MRT] is an agency attached to the DOTC does not mean that the DOTC cannot initiate an objective investigation,” Lacierda said.

“For the lack of participation from Ambassador Rychtar, they had to close that investigation. However, there is an NBI investigation that is ongoing, and we certainly encourage Ambassador Rychtar that if he has anything to say, to put it on record, under oath,” he added.

Justice Secretary Leila de Lima said the NBI would submit its report on the alleged extortion attempt next week after the Palace told the bureau to speed up its investigation.

De Lima said last week the NBI had already wrapped up its investigation, but said the report was still being reviewed by the legal division.

She said Monday the Palace would not review the report.

Rychtar accused Vitangcol of being behind the attempt to extort $30 million from Inekon, one of the top 100 corporations in the Czech Republic that is involved in railway projects in several European countries and the United States.

The government eventually awarded the P3.8-billion contract for 48 new MRT coaches to CNR Dalian Locomotive & Rolling Stock Co. of China.

Lacierda earlier accused Rychtar of lying when the ambassador said Abaya shouted at him over the phone after presidential sister Ballsy Aquino-Cruz and her husband Eldon were dragged into the controversy.

Rychtar eventually cleared the Cruz couple of any involvement in the extortion attempt.

In recent statements, Rychtar said Vitangcol appeared to be “protected” by powerful people because he had not beeen disciplined over the incident.

“You can see that Vitangcol has a very firm position... so I think that he is protected,” the ambassador said.

Rychtar said the extortion attempt took place on July 9, 2012.

He said Vitangcol, a businessman named Wilson de Vera who is a member of the President’s Liberal Party, and a certain M. de la Cruz, had dinner with Inekon Group board chairman Josef Husek and a certain Inekon executive named Haloun.

The ambassador said Vitangcol left after the dinner, while the rest of them headed to Rychtar’s residence to continue the discussion on the MRT project.

He said De Vera, whom Rychtar described as Vitangcol’s emissary, broached the $30 million grease money, Husek said was too much.

Rychtar said De Vera made two phone calls, after which he lowered the amount to $2.5 million.

“Finally, the Czech company did not participate in the bidding process due to its unclear terms of reference and suspicious circumstances around the bidding process itself,” Rychtar said.

Rychtar said Abaya did not act on the probe despite committing to do so during their two-hour meeting on April 11, 2013.

Abaya earlier said that Rychtar’s allegations “came with a business agenda.”

But Rychtar said he and Husek were ready to testify before Congress, and that they wanted the government to look into the “suspicious circumstances, which led to a questionable bidding process in March 2013.”

As early as October last year, the ambassador said he had submitted to the National Bureau of Investigation and the Department of Foreign Affairs a detailed affidavit about the extortion attempt, which he confirmed to Congress happened in July 2012.

He said Abaya was made aware of the extortion attempt during a meeting on April 11, 2013, but did nothing.

Husek, for his part, corroborated everything that Rychtar said in his affidavit.

“This witness statement is written in English. While I have a good command of the language, I may not be completely comfortable expressing more complex thoughts in English orally in a formal judicial setting. Therefore, if I appear at any judicial, administrative or other proceedings, or investigation, I would request the option to testify with the support of a translator from and to my native language, which is Czech,” Husek said.

After the Czechs refused to pay the grease money, Rychtar said, Vitangcol and his men started to treat them “with contempt.”

He identified Wilson de Vera as Vitangcol’s “envoy” in negotiating the $30 million extortion.

De Vera ran but lost his mayoralty bid in Pangasinan under the LP banner in 2013 midterm polls.

The sequence of events convinced the ambassador that the bidding process had been rigged to the disadvantage of the Czech company, he said.

Rychtar said aside from meeting Abaya for two hours on April 11, he also submitted a document to the Foreign Affairs Department detailing the embassy’s complaint.

Rychtar also informed the DFA that Abaya asked him for another meeting on July 17, after news reports dragged President Benigno Aquion III’s sisyter Ballsy Cruz into the controversy.

He said he and Abaya discussed the points already raised during their April 11 meeting.

“It was evident that Secretary Abaya has not undertaken any investigation on the matter until that day,” Rychtar told the DFA in a letter, a copy of which was furnished to the House committee on good government and public accountability headed by Rep. Oscar Rodriguez, a Liberal.

On Sunday, Abaya cleared Vitangcol of administrative charges and blamed Rychtar for not cooperating with the department’s investigation.

But Rychtar said he was cooperative and accepted an invitation on July 23 from NBI investigators to elaborate on his allegations. He also provided the NBI with the information and documents they needed, he added.

“Since April 11, 2013, Secretary Abaya was well-informed of the extortion. Secretary Abaya is also aware of the content of the unofficial text message sent to the ambassador that there is no chance for the Czech company to compete in any MRT deals,” the Czech Embassy told the DFA in a letter.

“We would also welcome if the Malacanang spokesperson Lacierda stop issuing public statements to media instructing the Ambassador or embassy what to do. We consider DFA as the communication channel,” the embassy letter said.

Vitangcol on Monday dared Rychtar to shed his diplomatic immunity and face him in court.

He denied Rychtar’s allegations and said the ambassador might just be “confused” because the Czech company lost the bidding.

Speaking to reporters after a hearing by the Senate committee on finance, Vitangcol said there was no truth to the Czech ambassador’s claims.

“I was not in his house. I did not go to his house. If he was saying that they had a negotiation there and allegedly, I was on top of it, I can categorically say that these were all lies and there’s no truth to these things. All the persons involved here, all the personalities which he mentioned, they all said on their own capacity that what the ambassador said were all lies,” Vitangcol said.

He could not offer a reason for the ambassador to lie, however.

Vitangcol said the procurement of the new MRT coaches was “open and transparent” and said Inekon’s bid was way over the budget, at $3.3 million per train car.

In the same hearing, DOTC officials said commuters will have to wait until late 2015 or early 2016 before the Metro Rail Transit 3 trains can be decongested.

They said the delivery of train coaches being procured will be completed by 2016 as it takes time to produce the cars to fit the MRT specifications.

Senate finance committee chairman Francis Escudero urged the department to think ahead and start acquiring more coaches to meet the anticipated rise in passenger traffic in the coming years.

“The problem with these trains is that they are not off-the-shelf. You cannot award it and then just like a paperclip or pencil or bond paper, you will buy at National Bookstore.... You have to actually manufacture these trains,” he said.

At present, he said a total of 48 new cars will be acquired, with the delivery to be staggered at three cars a month starting February next year.

He later described the corporate setup at the MRT “a mess” and said contentious issues on operational control and ownership impeded the development of the train system.

Aside from the additional coaches, DOTC Undersecretary Rene Limcaoco said the automated fare collection system (AFCS), which will not be ready until September 2015, ill also decongest the ticket stations of the MRT and LRT.

He said the automated and contact-less single ticketing system for the MRT and LRT would allow commuters to reload their tickets outside train stations and just “tap and go” like they do in Hong Kong.

The MRT 3 was built as a build-lease-transfer project in 1999. Another Czech firm, CKD Prague, has supplied the 73 trams. CKD was acquired by Siemens and then by Inekon.

For about two years now, Inekon has pushed for a government-to-government contract to provide 52 new light rail vehicles and 21 option cars as well as a refurbishing and maintenance deal for the existing fleet.

The company points out that this is pursuant to the original contract, which provides that the MRT 3 and original equipment manufacturer should undertake capacity expansion after five years.

Vitangcol had earlier been asked to appear before the NBI to respond to Rychtar’s allegations.

Aside from Vitangcol, the NBI also subpoenaed De Vera.

De Vera later became part of the consortium PH Trams-CB &T JV, which replaced Japan’s Sumitomo Corp. as MRT-3 maintenance provider in October last year. The maintenance contract was extended by a month last July.

In a five-page affidavit, Husek recounted how MRT officials led by Vitangcol allegedly tried to extort money from them.

At least three meetings had taken place between the MRT and Inekon officials, according to Husek, and it was during the second meeting, which took place in Rychtar’s official residence in Forbes Park,

Makati City, where the shakedown took place, he said.

NBI sources said the bureau would clear Vitangcol of the alleged shakedown and confirmed that the 30-page report has already been submitted for review by the legal department.

“Definitely, Vitangcol will not be included among those who will face criminal complaints since it was not established that the MRT chief was really involved in the alleged shakedown incident,” one of the NBI sources said.

Another source said the President’s sister and her husband were not involved in the extortion attempt.

“Rychtar submitted a sworn statement to the NBI and he cleared the President’s relatives,” the source said.

The sources said Inekon and Rychtar failed to provide enough evidence to link Vitangcol to the alleged shakedown.

Three members of the House of Representatives on Monday demanded that Vitangcol resign, or at least take a leave of absence until the NBI resleased the results of its probe.

Ako-Bicol party-list Rep. Rodel Batocabe and 1-BAP party-list Rep. Silvestre Bello III, in separate interviews with the Manila Standard, said that either a leave of absence or resignation is the most

honorable thing to do to save the Aquino government from embarassment.

But Abakada party-list Rep. Jonathan de la Cruz demanded Vitangcol’s resignation out of delicadeza or out of a sense of propriety.

De la Cruz, a member of the House independent minority bloc, said Vitangcol should leave his

post at the soonest possible time if there is any shame left in him.

“He already went on leave before. With this development, his integrity is once again under a cloud. He can no longer be effective,” De la Cruz told the Manila Standard. “He should really resign even if he is presumed innocent at this point,” De la Cruz added.

Batocabe said Vitangcol could go back anytime to public service as soon as he is cleared from wrongdoing.

But Speaker Feliciano Belmonte, Jr., a Liberal like Abaya, cleared Vitangcol.

“I think the ambassador has a fertile imagination,” Belmonte told the Manila Standard.

Isabela Rep. Rodolfo Albano III, member for the minority bloc of the House committee on transportation and communications, vouched for the integrity of Vitangcol.

“The guy is clean and beyond reproach. He came in after the bribe scandal,” Albano said.

Cavite Rep. Elpidio Barzaga, Jr. and House Deputy Majority Leader Sherwin Tugna of Citizens Battle Against Corruption (Cibac) party-list said that Vitangcol should be given his day in court.


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