Group wants probe of LRT-MRT 1 single ticketing project

MANILA, Philippines - The Coalition of Filipino Consumers (CFC), an umbrella organization of five urban poor groups, yesterday urged the Office of the Ombudsman to look into the possible conflict of interests of two companies that own AF consortium, one of the bidders in the controversial P1.72 billion LRT-MRT 1 single ticketing system project.

Oliver San Antonio, lawyer and spokesperson for the group, said the bids and awards committee of the Department of Transportation and Communications (DOTC) should explain why it allowed Ayala Land and Metro Pacific Investments Corp. to participate in the bidding.

Documents allegedly submitted by AF consortium disclosed that Metro Pacific owes 49 percent outstanding shares of stock of the consortium. Ayala Land owns about 18 percent.

San Antonio said these two companies own 67 percent of AF consortium, a direct violation of the bidding rules set by the DOTC.

Under the rules, a prospective bidder together with its affiliates or any of its affiliates who holds more than 50 percent of the outstanding voting shares in the concession of LRT 1, LRT 2 or MRT 3 and any bidder who holds an aggregate of more than 33 percent of the outstanding voting shares in the concessionaire is disqualified from the project.

A bidder with an outstanding civil or criminal suit is likewise disqualified.

The group said that Ayala Land owns and operates MRT Corp., the train operator of MRT 3. On the other hand, Metro Pacific has a pending arbitration case against the Philippine government in Singapore filed in January 2009 for failure to pay equity rental to MRT 3.

“Clearly, these two companies own majority voting shares in AF consortium. A conflict of interest is enough reason to invalidate the bidding,” San Antonio said.

“We must be vigilant. We, the commuters, should closely study the statements being given by the DOTC in saying that the bidding was above board. Let’s look at the business interests of Ayala Land and Metro Pacific in AF consortium,” he said.

“It is clear that there is a problem because Ayala Land is the MRT operator while Metro Pacific filed a case against the government. Had DOTC undertook a diligence check, in an instant, the agency should have disqualified AF consortium immediately in participating in the bidding and government should have avoided this potential scandal,” he added.

San Antonio explained that the rules tried to prevent a situation where just one single company will operate the MRT 3 trains and the payment system.

He said AF consortium offered to pay P800 million in staggered basis over the next 10 years only when ridership volume reaches P750 million per quarter.