Ombudsman indicts Abaya over MRT deal

Mar Roxas, Abad, 7 others cleared of plunder

MANILA, Philippines — The Office of the Ombudsman has ordered the filing of a graft case against former transportation secretary Joseph Emilio Abaya and 16 others in connection with the P4.25-billion contract awarded to Busan Universal Rail Inc. (BURI) for the upgrade and maintenance of the Metro Rail Transit Line 3 (MRT-3).

In an 88-page consolidated resolution dated May 8, 2018 approved by Ombudsman Conchita Carpio-Morales on June 21, the ombudsman said its special panel of investigators found probable cause to charge Abaya and 16 other respondents with violation of Section 3 (e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

In the same resolution, however, the ombudsman dismissed the plunder complaint against Abaya and his predecessor Mar Roxas “for lack of probable cause.”

Also cleared of plunder charges were seven other former Cabinet officials during the previous Aquino administration: Florencio Abad (bud-get), Cesar Purisima (finance), Jericho Petilla (energy), Mario Montejo (science), Voltaire Gazmin (defense), Rogelio Singson (public works) and Arsenio Balisacan (economic development).

All the Cabinet secretaries were named in the plunder complaint for being then members of the Government Procurement Policy Board. The complaint was filed in November last year by the Department of Transportation (DOTr) represented by its undersecretary for legal affairs and procurement Reinir Paul Yebra, legal services director Giovanni Lopez and lawyer Mark Steven Pastor.

The ombudsman said the complainants “adduced no evidence showing that either Roxas or Abaya, or any of their co-respondents” had amassed, accumulated or acquired ill-gotten wealth of at least P50 million, the threshold amount of public funds for a crime to be considered as plunder.

The ombudsman said there was also no evidence to prove that at least P50 million of the funds for the MRT-3 upgrade and maintenance were diverted to the possession of Roxas or Abaya, or to any of their co-respondents.

Graft vs Abaya, et al.

On the other hand, the ombudsman has found merit in the graft complaints filed last year by the DOTr and several progressive groups, including the Anti-Trapo Movement, Bagong Alyansang Makabayan (Bayan), Bayan Muna party-list and Train Riders Network.

The ombudsman said its investigation revealed that Abaya conspired with other then officials of MRT-3 and of the Department of Transportation and Communications (DOTC, now DOTr) in giving unwarranted benefit, advantage or preference to BURI by awarding to it the contract totaling P4,251,900,000 despite the firm’s “lack of eligibility and qualifications” to carry out the long-term project.

“In sum, the Busan JV (Joint Venture) was not technically, legally and financially capable to undertake the MRT-3 long-term maintenance contract. Despite its being unqualified, the contract was still awarded to it by the DOTr, in violation of Section 53 of the Revised Implementing Rules and Regulations of RA 9184 (Government Procurement Reform Act) which requires that in negotiated procurement, the procuring entity should negotiate with a technically, legally and financially capable supplier, contractor or consultant,” the ombudsman’s resolution read.

The P4.25-billion contract included maintenance of the MRT-3 system for three years; general overhauling of 43 units of light rail vehicles; total replacement of the signaling system and additional maintenance works.

The ombudsman said it was on Dec. 21, 2015 when the MRT-3 Bids and Awards Committee (BAC) issued a resolution recommending the awarding of the entire project to Busan JV.

The contract was signed by DOTC, MRT-3 and Busan JV on Jan. 7, 2016.

Busan JV was then composed of five firms – Edison Development and Construction, Tramat Mercantile Inc., TMI Corp. Inc., Castan Corp. and BURI.

The ombudsman said the records showed that the contract was already awarded to Busan JV even before its incorporation. It added that instead of submitting a valid joint venture agreement (JVA), Busan JV was allowed to simply submit a Certificate of Registration of BURI as a Special Purpose Company (SPC).

“The action becomes even more suspect as it was respondent DOTr Assistant Secretary for Procurement (Camille) Alcaraz who wrote the Securities and Exchange Commission to facilitate the registration of Busan JV as an SPC,” the ombudsman said.

BURI, according to the ombudsman, is a totally different entity that lacked at least 15 years of continuous experience required for the project.

The ombudsman said BURI’s “ineptitude” to implement the project was highlighted by the Commission on Audit in its 2016 Consolidated Annual Audit Report, in which the COA said the “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, (which) remain unoperational due to glitches in the power supply and signaling system.”

The COA report also showed that the MRT-3 encountered 2,619 incidents of train removals, 63 incidents of service interruptions and 586 incidents passenger unloadings for 2016, an increase of 19.81 percent, 26 percent and 163.96 percent, respectively, from 2014.

The three-year contract was supposed to end in January 2019 but it was ordered terminated by the DOTr on Nov. 6 last year.

“There is a given authority and responsibility to Abaya as DOTr secretary to regulate the acts of the DOTr officials responsible for the procurement of the MRT-3 long-term maintenance contract and he cannot simply evade such responsibility by invoking reliance on his subordinates, especially considering that the subject contract is one with a scope and magnitude affecting a big portion of the commuting public in Metro Manila, with an accompanying financial impact on the coffers of the government amounting to more than P4 billion,” the ombudsman’s resolution read.

“By allowing the award of the contract to the Busan JV despite the attendant glaring irregularities, Abaya deliberately ignored applicable laws, rules and regulations and standard operating procedures, falling short of or disregarding the required competence expected of him in the performance of his official functions,” it added.

Aside from Abaya, ordered charged with graft before the Sandiganbayan were former transportation undersecretaries Edwin Lopez (operations), Rene Limcaoco (planning/head of negotiating team), Catherine Jennifer Gonzales (procurement and administration/vice head of the negotiating team), as well as former DOTC-MRT-3 general manager Roman Buenafe, assistant secretary for procurement and BAC chair Camille Alcaraz, former BAC vice chair Ofelia Astrera and BAC members Charissa Eloisa Opulencia, Oscar Bongon and Jose Rodante Sabayle.

Also ordered charged were BURI incorporators Eldon Ferdinand Uy, Elizabeth Velasco, Belinda Tan, Brian Velasco, Antonio Borromeo, Jun Ho Hwang and Elpidio Uy.

‘Unfortunate’

In a statement, Abaya’s spokesperson Enricka Gonzalez said the former transportation secretary has yet to receive a copy of the resolution.

“We have received the news through media that the Office of the Ombudsman has decided against former DOTC secretary Jun Abaya and his team. We find this decision unfortunate, considering that Sec. Jun clearly laid out his defense against the poorly crafted and unsubstantiated complaint filed by the DOTr,” Gonzalez said.

“Secretary Abaya will consult with his lawyers once they receive an official copy of the decision about his next course of action,” she added.

‘It’s about time’

Malacañang welcomed the indictment of Abaya, saying someone should be held accountable for the suffering of commuters.

“It is about time and we appreciate that. If you recall, if no one is charged, we will release the documents one by one,” presidential spokesman Harry Roque said at a press briefing in Cagayan de Oro.

“But since the ombudsman has made a decision, it is about time someone faced accountability, especially for the corruption of funds allotted for the MRT that is causing suffering to commuters,” he added.

Meanwhile, Sen. Grace Poe, who chairs the Senate committee on public services that investigated the anomalous MRT maintenance contracts, welcomed the findings of the ombudsman.

She said the ombudsman’s decision would boost “the fight to make erring public officials accountable for their failure to exercise the highest degree of diligence in the performance of their duties.”

The senator said the findings were consistent with the conclusion of the report submitted by her committee, which observed “the badges of negligence and inactions of the DOTr officials led by Abaya indicating insensitivity, callous indifference and acts disadvantageous to the commuters, to the Filipino public and to the government with regard to the malfunction problem of the MRT.”

“These cases are a reminder to everyone that graft is a serious offense. While we lament that the same is bailable, let this be a lesson to everyone in government that every public officer has accountability for each and every contract that they enter into behalf of the Filipino people,” Poe said.

Bayan also welcomed the ombudsman’s resolution.

“We filed the complaint in November 2017 on behalf of commuters and taxpayers.These maintenance contracts involving what we alleged are unqualified providers were partly to blame for the sorry state of the MRT-3,” Bayan secretary-general Renato Reyes said.

“We are still a long way from achieving justice for commuters and taxpayers but we hope that the case will lead to genuine accountability,” he added.

Reyes said the Duterte government should also examine the policy of privatizing the train system, its functions and maintenance, adding, “This has been routinely abused by both government officials and private groups to the detriment of the commuters and taxpayers.” – With Alexis Romero, Paolo Romero, Rhodina Villanueva, Rudy Santos