MRT expansion meets road block

Due to legal loopholes and technicalities, the construction of the proposed North EDSA-Monumento stretch, or Phase 2 of the Metro Rail Transit (MRT) 3 may be delayed further.

The Department of Justice (DOJ) said yesterday the supplemental agreement to the MRT 3-Phase 1 project between the Department of Transportation and Communications (DOTC) and the Metro Rail Transit Corp. is no longer valid.

In a legal opinion, the DOJ said the supplemental agreement on MRT 3-Phase 2 has to be submitted to a "price test" or "Swiss challenge" in accordance with the Build-Operate-Transfer (BOT) Law, which requires public bidding on government projects.

Lawyers said a Swiss challenge would mean that other contractors can submit other proposals to compete with that of the MRTC. But the MRTC, as the prequalified bidder, still has the option to match the lowest cost and best terms that other contractors can offer to be able to continue the implementation of the project.

The DOTC sought the DOJ’s opinion on whether it can implement the project with existing proponent MRTC through the supplemental agreement, without public bidding since the government contract involves an amount more than P300 million.

The DOJ said while the proposed supplemental agreement may be justified under a lease transfer agreement between the DOTC and the MRTC, it cannot prevail over the provisions of the BOT Law, which requires public bidding and review and approval of the National Economic Development Authority-Investment Coordinating Committee and other pertinent government agencies.

The DOJ said no binding contract exists for the project yet and it is apparent that the project was to be a BOT project subject to the provisions of the BOT Law.

And even under Presidential Decree No. 1594, the DOJ said, a supplemental agreement cannot be accepted as addendum or part of the original agreement for the MRT-Phase 1 project.

Earlier, Transportation Secretary Leandro Mendoza and Light Rail Transit Authority administrator Teodoro Cruz testified that the MRTC is best suited to implement the EDSA MRT 3-Phase 2 project. Their assessment was based on the proven competence of the MRTC, the technical and financial non-viability of a proposal to instead link LRT 1 Monumento to EDSA-Roosevelt and the protracted legal battle that could arise should MRTC’s right over the MRT 3-Phase 2 project be disregarded.