DOTC digs deeper into MRT anomalies

MANILA, Philippines - The Department of Transportation and Communications (DOTC) said yesterday it is already conducting a massive investigation of the allegedly numerous big-time anomalies at the Metro Rail Transit (MRT).

Dante Velasco, DOTC Undersecretary for Public Information, said the department was set to sit down with the MRT build-lease-transfer (BLT) contractor Metro Rail Transit Corp. (MRTC) and its affiliate, MRT Development Corp. (MRT Devco), to determine the EDSA-bound rail line’s financial status.

Velasco said the DOTC is set on finding out if it is the government or the MRTC and MRT Devco that has huge liabilities to the other.

“We’ll sit down with the MRTC and the MRTDC (MRT Devco) and we’ll do some computing of all these obligations. We want to find out the real financial situation,” Velasco said.

The DOTC is trying to collect more than P1 billion from the MRT Devco for unpaid development rights on MRT advertising spaces.

MRT Devco denied it owed the DOTC such development right payments, saying it even had overpaid DOTC some P64 million.

The audit, Velasco said, will run parallel to the review the DOTC will conduct on the operational costs of running the MRT, in an effort to determine the fare hike they are set to impose in the future to reduce the subsidy the government was giving to support the operation of the EDSA-bound rail line.

DOTC Secretary Jose “Ping” de Jesus earlier revealed a plan to hike fares at the MRT as well as the Light Rail Transit (LRT) Lines 1 and 2, to reduce the government subsidy extended to the MRTC and the LRT Authority (LRTA) to support the operation of all three rail lines.

Velasco added that the DOTC will also look into the government’s failure to gain management control over the MRT line despite a supposed buyout by the government through the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (Landbank) of a 76-percent interest in the MRTC.

He said they found out that the Land Bank and DBP have not invoked their right to gain management control over the MRTC, treating their equity investment of $800 million as just an “economic interest” over the rail line operations.

“They said that they only have 76 percent ‘economic interest’ in the MRTC,” Velasco said.

President Aquino, in his State of the Nation Address last July 26, had identified the MRT buyout as one of several questionable deals during the Arroyo administration.

Aquino said the people’s money was used in the transaction “in exchange for an operation that was losing money.”

DOTC sources said that despite the 76 percent “economic interest,” officials of the DOTC, during the time it was headed by Leandro Mendoza, largely left major management decisions to the group of private investors behind the MRTC.

DOTC officials named to head the MRT, such as Mendoza’s fellow retired police generals Robert Lastimoso and incumbent general manager, DOTC Assistant Secretary Reynaldo Berroya, also allegedly allowed maintenance expenses to run sky high at the MRT despite daily disruptions. Japanese firm TES Philippines was the maintenance contractor for a period of several years.

The maintenance contract of TES Philippines currently costs the MRTC more than $2 million a month. 

The figure, sources said, is huge considering that the LRTA has been able to have the 30-year old LRT Line 1 maintained by its private contractor for just P35 million a month while the newer LRT Line 2 maintenance contract costs the LRTA just P22 million a month.

The LRTA, sources noted, holds transparent public biddings every year to select private firms that will be hired to maintain the two rail lines.

Velasco earlier said the DOTC planned to put the MRT and the LRT Lines 1 and 2 under one management, apparently under the LRTA.