THE Office of the Ombudsman said Monday, June 25, that it has found probable cause to charge former Transportation secretary Joseph Emilio Abaya and 16 others for graft and corruption over the MRT Line 3 maintenance contract.
The case stemmed from the allegedly anomalous P3.8-billion maintenance contract awarded to the Busan joint venture (JV). Despite the procurement of Busan JV's services, MRT3 is plagued by frequent glitches in its power supply and signalling system, causing inconvenience to thousands of commuters.
In a statement, Ombudsman Conchita Carpio Morales said Abaya will be charged for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019).
Others who will be charged are Department of Transportation (DOTr) Undersecretaries Edwin Lopez, Rene Limcaoco (head of the negotiating team) and Catherine Jennifer Francis Gonzales (vice-head, negotiating team); MRT3 general manager Roman Buenafe, Camille Alcaraz (assistant secretary for procurement), Ofelia Astrera (vice-chairperson, MRT3 Bids and Awards Committee), Charissa Eloisa Julia Opulencia (Attorney V), Oscar Bongon (chief, Engineering Division) and Jose Rodante Sabayle (Engineer III).
Charges will also be filed against Eldonn Ferdinand Uy of Edison Development and Construction, Elizabeth Velasco of Tramat Mercantile Incorporated, Belinda Tan of TMI Corporation, Incorporated, Brian Velasco of Castan Corporation, and Antonio Borromeo, Jun Ho Hwang and Elpidio Uy from Busan Universal Rail, Incorporated (BURI).
Edison Development, Tramat, TMI, Castan and BURI comprised the Busan JV, which was awarded in January 2016 the maintenance contract for MRT Line 3.
The Busan JV was among three entities that submitted proposals during the October 21, 2015 bidding. All three proposals then were found to be "deficient in their eligibility and technical documents and were given the opportunity to cure the defect."
After a week, Busan JV was declared as the sole eligible entity. The DOTr, MRT3 and Busan JV signed the maintenance contract on January 7, 2016.
The contract included the overhauling of 43 units of light rail vehicles (LRVs).
Ombudsman investigators cited the Commission on Audit's Consolidated Annual Audit Report (CAAR) for 2016, which said that “DOTr still failed to provide the riding public with a safe and comfortable transport system even with the procurement and delivery from August 2015 to January 2017 of 48 new LRVs with a total cost of P3,759,382,400.00."
"Despite four years in the procurement process and total payments of P527,761,083.00 (equivalent to 14% of the contract price) to Dalian, the LRVs remain inoperational and unaccepted by the DOTr as of reporting date due to glitches in the power supply and signaling system. These resulted from the DOTr’s poor planning and other major procurement lapses,” state auditors added.
Ombudsman investigators also found that respondents "extended unwarranted benefits, advantage and preference to the contractor when it awarded the project to Busan JV, an ineligible and unqualified entity."
In its 88-page Consolidated Resolution, it was explained that “as the Busan JV’s offer was still considered as successful, the potential JV partners must enter into a Joint Venture Agreement (JVA) in accordance with its rules. But they did not. Still, the Busan JV was awarded the contract- yet another violation of the rules under R.A. No. 9184.”
Procurement documents show that it was only Eldonn Uy of Edison Development and Construction that executed a “Statement to enter Into a Joint Venture” purportedly as the authorized representative of all the members of the Busan JV.
“Since only one potential partner of the Busan JV submitted the required statement, it should have been disqualified from participating further in the negotiated procurement since it lacked an eligibility requirement,” explained the Consolidated Resolution.
The Special Panel also found irregularity in the award when the Busan JV was allowed to simply submit a Certificate of Registration of BURI as a Special Purpose Company (SPC) instead of a valid JVA. The action becomes even more suspect as it was respondent DOTr Assistant Secretary for Procurement Alcaraz who wrote the Securities and Exchange Commission to facilitate the registration of Busan JV as an SPC.
“This Office notes that [Alcaraz] was the DOTr Assistant Secretary for Procurement and the chairperson of the MRT3 BAC. Her action thus reeks of impropriety as it gives the impression that she was acting in favor of the Busan JV,” stated the Consolidated Resolution.
The Special Panel also mentioned irregularities in the amendment of the original net worth requirement and absence of Bill of Quantities (BOQ) which favored Busan JV.
Based on their 2014 audited financial statements, the net worth of Tramat in 2014 was only P1.9 million while Edison’s was P383.5 million only, both below the P1-billion requirement under the amended Instructions to Offerors.
In its financial offer, Busan JV failed to include its BOQ as required in the Instructions to Offerors.
“There are no existing BOQs for the overhauling of the 43 LRVs and the total replacement signaling system components of the MRT3 long-term maintenance contract. Having failed to submit the required BOQ, the Busan JV should have been disqualified outright from the procurement process,” auditors said. (SunStar Philipines with PR)