COA blames DOTC for MRT 3 woes

MANILA, Philippines – The Commission on Audit (COA) is blaming the Department of Transportation and Communications (DOTC) for the problems of the Metro Rail Transit 3 (MRT 3) that have resulted in breakdowns and other issues in the operation of the train system.

State auditors, in a 2014 report released yesterday, said the problem stems from the DOTC’s act of assuming responsibility for securing the maintenance service provider by being the contracting party and signatory to the maintenance service agreement in October 2012.

The COA report said the DOTC did so without any amendment to the Build-Lease-Transfer (BLT) agreement with Metro Rail Transit Corp. (MRTC) nor did it file any legal action or impose any sanction against the firm for not complying with its obligation to provide technical maintenance of MRT 3.

“Under these circumstances, it would appear that the contract with the existing provider is of doubtful validity and as compared to the recorded performance of the MRTC contracted service provider, various service interruptions/breakdowns were noted caused by inefficient maintenance operations of the system,” state auditors said.

The COA report noted that on Aug. 8, 1997, the government, through the DOTC, entered into a BLT agreement with MRTC for the construction of a mass rail transport system along EDSA now known as MRT 3 for a period of 25 years, which stated that the MRTC shall provide technical maintenance to MRT 3 subject to the payment by DOTC of rental and other relevant fees.

On Dec. 10, 1997, a maintenance agreement was entered into by MRTC, as the owner of MRT 3, and Sumitomo Corp. as maintenance provider whose deal expired on June 21, 2010 but the contract underwent four extensions from June 21, 2010 to Oct. 19, 2012 for a total of 27 months. 

The COA report said MRTC’s proposal to extend the maintenance contract for another year was allegedly rejected by Sumitomo because the latter wanted a one-year contract extension on a renegotiated term that did not push through.

On Oct. 19, 2012, Transportation Secretary Joseph Emilio Abaya approved a negotiated contract between DOTC-MRT 3, represented by Undersecretary Jose Perpetuo Lotilla and then general manager Al Vitangcol, and the joint venture of PH TRAMS-CB&T represented by Roehl Bacar for a period of six months in the amount of P347.76 million or $1.15 million per month.

The COA report said the interim contract ended up being extended three times totaling 11 months and 15 days and on Sept. 3, 2013, a new contract through public bidding was entered into by and between DOTC and the joint venture of GLOBAL-APT to provide one-year maintenance service for the MRT 3 system from Sept. 5, 2013 to Sept. 4, 2014 with a contract price of P685.041 million.

State auditors noted that instead of compelling the MRTC to abide by the BLT agreement, the DOTC continued to be the procuring entity for the maintenance provider of MRT 3. 

“The failure of MRTC to take responsibility for the procurement of a maintenance provider for the MRT 3 system after the expiration of the Sumitomo contract was a violation of Sections 3 and 5 of the BLT agreement inasmuch as the provision of a maintenance provider is inherent to the agreement which is yet to expire in 2025 or 25 years from its inception in 1999,” the audit team said.

“Furthermore, review of the performance efficiency of the two maintenance service providers procured by the DOTC disclosed that it failed to carry out the maintenance activities and its objectives. The occurrence of the frequent breakdown of the MRT 3  System and the incident that happened on Aug. 13, 2014 where a train overshot the rails near Taft Avenue station was found to be caused by poor maintenance of the system,” state auditors added.

The COA report said such is proven by numerous unscheduled train removals, emergency unloading of passengers, broken elevators and escalators and other suspended services caused by either broken rails or signaling failure from 2012 to 2013.

“The above figures show that there is a need to give serious attention to the maintenance problems to prevent further breakdowns that may pose grave threats/danger to the safety of the riding public,” state auditors said.

“Further, it was also observed that most of the elevators and escalators of the 13 stations are not working. The non-availability of these conveyances greatly affects the wellbeing of passengers, especially the elderly, pregnant women and persons with disability,” the audit team added. 

The COA report acknowledged that because of the deficiencies, the DOTC was to collect P313.721 million in penalties from the GLOBAL-APT but pointed out that such money “cannot be compared to the comfort and risk of passengers who patronized the poorly maintained MRT 3 System.”

State auditors said the DOTC should provide legal basis for undertaking the responsibility of procuring the maintenance service provider for the MRT 3 system instead of the MRTC, pursuant to the BLT agreement and submit an action plan to address the failure to sanction MRTC’s non-compliance with the BLT agreement.