DOTC gives up on big projects

I reported in this column a week ago that DOTC is not likely to deliver a big ticket project it started under P-Noy’s watch before P-Noy bows out of office in June 30, 2016. But I still entertained a glimmer of hope that Sec. Jun Abaya will move heaven and earth to fine tune procedures, crack the whip and still meet the deadline.

I went through the list of DOTC projects with Sec. Jun during our two-hour meeting early this month, getting from him status of projects and expected completion dates. I saw right then and there that it would be difficult for P-Noy to inaugurate any of these major projects. But Sec. Jun gave the impression that he will die trying.

It seems Sec. Jun might as well be dead right now. His underlings at DOTC have spoken and they are the ones really running the show. DOTC Undersecretary Rene Limcaoco had the nerve to justify the delays saying they saved over P2 billion in 2012 after it reorganized the bids and awards process.

An informed source familiar with the DOTC remarked to me that Limcaoco failed to factor the economic cost of delays which he estimates to be P1 billion on LRT2 extension and P8 billion on LRT1extension, not counting the economic cost of inaction on NAIA and other airports, Northrail, license plates, etc.

DOTC Undersecretary Catherine Jennifer Gonzales, on the other hand, told reporters last week they can’t deliver any major projects for P-Noy, citing delays in pre-bid activities.

Here is how Usec Gonzales described their status:

The P17.5-billion Mactan Cebu International Airport Terminal Expansion Project is now delayed at the bidding stage.

Other airport projects will also not be inaugurated by P-Noy. Based on the DOTC timetable, the P4.3-billion Puerto Princesa Airport, P7.2-billion New Bohol (Panglao) International Airport, and the P1.1-billion Bicol International Airport can be completed in the third quarter of 2016. That’s beyond P-Noy’s term which only up to the end of the second quarter of 2016.

But even that delayed completion is up in the air. DOTC is only planning to bid out the preparatory work for the Panglao Airport project. The Bicol airport is tied up in legal knots.

The P9.76-billion Light Rail Transit Line 2 Masinag Extension in Antipolo is expected to be operational by 2015. The project would add a measly 4.2 kilometers to the existing 13.8-kilometer service.

But that promised completion date is iffy too. They are only now asking for bids for the design and bidding for the construction will follow a year later. They could have saved a year if they asked for a design and build contract instead, as was done for the LRT 1 extension from Balintawak to Trinoma.

Let us not even talk about MRT 3 because all those press releases about buying additional rail cars and buying out the original private sector owners are still up in the air. There are too many legal obstacles to have anything happen soon.

The Cebu Bus Rapid Transit (BRT), according to DOTC’s Gonzales, is scheduled to start operating by 2015. But don’t bank on it. Sec. Jun told me P-Noy wants proof of concept and they will do this in a stretch of Commonwealth Avenue. No date has been set to get this trial run going. Until then, the project is in limbo.

The Light Rail Transit Line 1 Cavite Extension Project seems dead on the tracks, a potential political tragedy for Sec. Abaya, a Cavite politician. DOTC is aiming for construction to begin by next year and operation by late 2016.  Note, Usec Gonzales said aiming to start construction only. Completing it in late 2016 means they will fail to deliver within P-Noy’s term.

The completion date for LRT 1 extension was earlier set by DOTC in 2015. But they have pushed back the deadline for submission of pre-qualification documents twice. As I wrote in a previous column, DOTC is blaming the “inquisitive” bidders for the delays.

Citing the P60-billion Light Rail Transit Line Cavite extension project, DOTC Usec Gonzales told reporters the government was not responsible for the postponement in the bidding of the project. “We are receiving a lot of questions from the four bidders so we have to also respond to them all.”

Submission of the financial bids should have been done between January and February 2013, but was moved to May 27 this year. “We are targeting construction to begin by 2014 and operation to start by late 2016.” This LRT1 Cavite extension project was approved by NEDA March 2012.

Usec Gonzales cannot declare DOTC blameless for the delay that easily. The barrage of questions from bidders is because the bid documents were not clearly written or worse, confused. Incomplete data smacks of intellectual dishonesty on DOTC’s part.

I checked out the DOTC website and read the questions on the bidding parameters of the LRT 1 Cavite line extension. I can understand why the bidders want to be clarified.

For instance, bidders raised concerns on Key Performance Indicators (KPIs) as they feel they are being overly exposed to risk due to the stringent requirements set. DOTC proposed a long list of modifications to the KPI but it remains to be seen if these will be sufficient to satisfy the bidders.

There were issues about the automatic fare collection system. This is actually a separate DOTC project costing P1.7 billion to create a common ticketing system where only one electronic ticket is needed to ride on lines 1, 2 or 3.

This system will require new passenger gates where passengers put their tickets. Or the existing ones need to be modified. It is unclear how the separate bidding for this will proceed and how this will affect the LRT1 Cavite extension project.

There is also a new problem with the automatic fare collection system. A Korean group claims they should be awarded the project based on an unsolicited proposal they submitted last year. The Line 1 Cavite Concessionaires had been told this new fare collection system would be in-place before they need to use it but clearly this will not happen.

Then there is confusion over the number of stations to be provided. DOTC now states that 10, not eight are required.

DOTC is also confusing the issue of the Common Station further with a statement that they are still studying location for it and whether or not it will be constructed by DOTC or the Concessionaire. Delays in the implementation of the Common Station will affect the Japanese Loan for new vehicles as the Loan Agreement stipulates a timetable for both the Common Station operation and the arrival of new vehicles.

The LRTA Stimulus Contracts are mostly not awarded and there seems to be confusion how these will impact the Concession Agreement. Two packages were awarded, the rail replacement and the anchor bolt replacement contracts. These will be ongoing during the period of responsibility of the Concessionaire and most of the bidders have raised concerns.

Right of Way issues remain a very big concern. Piecemeal turnover of packages seems unacceptable to most bidders but DOTC insists this is a risk of the bidders but says they will “clarify” how such defects will be addressed in the Concession Agreement.

One query states: “In most LRT1 sub-stations (including the one of the depot), the power supply equipment is approximately 25 to 30 years old. Please clarify if there any plans or programs to upgrade or replace the power supply equipment (transformer, rectifier, etc.) prior to handover.”

DOTC replied “There are no such plans prior to handover. This should form part of the Concessionaires five-year plans”. The truth is LRTA had been looking at a replacement program for this equipment for some time but never followed through on it. Now they are passing this large capex to the Concessionaire.

There are many items marked “This matter is subject to further deliberation by the SBAC and a response to this query shall be provided in a separate Bid Bulletin” This may delay the bidding process further.

I got a headache reading the comments of bidders and the reply of DOTC. They will be lucky to get the project started soon and completed before the Sec.ond Coming. DOTC is a mess and has clearly failed P-Noy and his bosses.

Medical school exam

Artemio Tipon sent this one.

When I was young I wanted to go to a medical school, but I was confused by the entrance exam.

One of the questions was, “Rearrange the letters P N E S I to spell an important part of the human body that is more useful when erect.”

Those who spelled SPINE became doctors.

The rest ended up in Congress.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco