Vitangcol: There’s 5% kickback in MRT-3 Chinese coaches

Government’s purchase of 48 commuter train coaches from China apparently was rigged. Officials of the DOTC and its subsidiary MRT-3 junketed to China, all expenses paid by the Filipino sales agent, as early as three years before the contract was awarded. Then in 2013 Transport Sec. Joseph Abaya placed the very junketeers in influential positions to endorse and accept the products from Chinese state firm Dalian Corp.

Result: a five-percent kickback. Of the P3.85-billion purchase price, P192.5 million went to the pockets of DOTC-MRT-3 conspirators.

MRT-3 ex-general manager Al Vitangcol recaps all these in a recent letter to Abaya. He says recent exposés (in this column) bother him that Abaya accepted the first prototype Dalian coach in Aug. 2015 even if it is engineless. Being so, it had not been test-run for 5,000 km as required in the contract.

“Prototype” means “fully functional model or sample.” Abaya had kept mum about the Dalian output being engineless, until pointed out here. He then blabbered about separately buying a traction motor from Germany, to be installed then tested on the dilapidated MRT-3 tracks.

Though still GM then, Vitangcol had not participated in the Dalian purchase. He says he voluntarily opted out after he was linked to a $30-million extortion attempt from Czech train maker Inekon Corp. Much earlier, however, he had “revised and improved the terms-of-reference (TOR)” for the purchase of 48 coaches from whatever source, he says.

The absence of an engine is a violation of that TOR, which is the main body of the resulting Dalian contract, Vitangcol adds. Such contract breach would lead to unsafe coaches, more dilapidation of the rail tracks, and potential incompatibility with the signaling system. “The riding public is at risk,” Vitangcol says.

Vitangcol met with me last Wed., Jan. 13, for the first time since he left MRT-3 in May 2014. He was exposed in this space as having signed, with Abaya and Usec. Jose Perpetuo Lotilla, a $1.15-million monthly maintenance deal with PH Trams, in which his uncle-in-law is an incorporator-director. On the day the column came out, Abaya ordered Lotilla to suspend Vitangcol; the latter opted to resign instead.

Vitangcol says Abaya has not replied to his letter dated Dec. 11, 2015. Since then, however, the DOTC chief announced his acceptance last Dec. 23 of a second prototype Dalian coach – also engineless.

Vitangcol’s letter is reprinted below.

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11 December 2015

Hon. Joseph Emilio Aguinaldo Abaya

Re: Allegations of Graft and Corruption Relative to the MRT-3 Capacity Expansion Project - Lot 1

I decided to formally write to you considering the recent events and seemingly legal maneuverings attendant to my present case.

I have mentioned the captioned subject to you in one of our meetings at the Department sometime in 2013 but I do not know whether or not you have initiated an investigation into the same. However, I want this spectre out of my system and I am thus laying this before you as a matter of record.

In the initial meeting with the executives of CNR Dalian Locomotive and Rolling Stocks Co. (“Dalian”) at the MRT-3 Depot, initiated by Mr. Antonio de Mesa, he proudly stated that, “Iyang si Ellen at si Ric isinama ko yan sa China sa Dalian.” Mr. Antonio de Mesa is the representative of Dalian in the Philippines.

As a result of Mr. de Mesa’s statement, I asked all the officers of MRT-3 to divulge and make a full disclosure of their previous ties and associations with Dalian. Some of these officers admitted and disclosed that they went to China in 2010 and 2011 and visited the manufacturing plant of Dalian. The travel and accommodation expenses were paid for by Dalian. DOTC awarded the project to Dalian in 2013.

Two (2) separate delegations went to China and it included officials of DOTC and MRT-3. One (1) of the DOTC officials who went there headed the BAC-TWG, which recommended the award of MRT-3 Capacity Expansion Project-Lot 1 to Dalian. Two (2) MRT-3 officials who also went there ended up as members of the task force, which was created to evaluate and accept the project from Dalian.

Sometime in February 2014, Mr. Eugene Rapanut, representing himself as a member of the Liberal Party-Ilocos Sur Chapter, and at that time connected with Dalian, confided to me that Dalian (of course through him and Mr. de Mesa) “facilitated” the lifting of the Temporary Order of Protection, as issued by the Regional Trial Court-Branch 66 of Makati City against DOTC relative to the MRT-3 Capacity Expansion Project.

Subsequently, after my departure from MRT-3 in May 2014, I received reliable information that five percent (5%) of the project cost was given back to the officials of DOTC in a form of a kickback. If this is not corruption, then what will you call it?

During my days of solitude, I re-read the Bible and sought refuge in the Word. In Proverbs 12:19, it says: “Truthful lips endure forever, but a lying tongue lasts only a moment.” In James 4:17 the Lord said, “So whoever knows the right thing to do and fails to do it, for him it is sin.” This is what I am doing now.

More power to you and the Department.

God bless us all.

Sincerely yours,

Atty. Al S. Vitangcol III

Former MRT-3 General Manager

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