Backdoor

Many in the transport industry appear to have been caught by surprise when Grab bought out two-wheel transport provider Move It. As a result of this backdoor entry, Grab Philippines has now become the third player in a transport segment dominated by JoyRide and Angkas.

Providing mobility services using motorcycles is a gray area as far as our heavily regulated transport sector is concerned. Our regulators were as flustered by the sudden surge in the popularity of motorcycle taxis as they were when “colorum” passenger vans flourished like mushrooms to serve commuters desperately searching for more transport options. Eventually, our regulators yielded to the popularity of passenger vans serving newfound routes more convenient for our commuters.

More than the passenger vans, there is a clear need to regulate the motorcycle taxi business because of the safety concerns involved. Passengers are safer riding four-wheel conveyances than hopping aboard a two-wheeler with only a helmet for protection.

When companies began applying for franchises to operate motorcycle taxis, former DOTr secretary Arthur Tugade responded as most bureaucrats would: he formed a committee, now more fashionably referred to as a Technical Working Group (TWG). It was a rather large committee that included: the DOTr, the LTO, the LTFRB, the PNP-HPG, the MMDA, the Senate, the House of Representatives, commuter welfare groups, road safety advocates, motorcycle organizations and manufacturers and even the law schools.

Of course, with such a large committee, no final recommendations have been formed after three years. Instead, regulators have given “temporary” accreditation to three motorcycle taxi providers (JoyRide, Angkas and Move It). The window was closed in the meantime for other applicants.

Grab Philippines was among the first applicants. For some reason, however, the delivery service giant withdrew its application. Recently, the company did move into the motorcycle taxi business by acquiring Move It.

To be sure, there is nothing illegal in acquiring a business. However, this particular business segment remains a “pilot program” closely supervised by the transport agencies. Because this is a “pilot program,” some groups think that the acquisition by Grab of Move It ought to have passed through the TWG organized for the purpose of setting policies for this mode of passenger transport.

This is, they argue, more than just the acquisition of one company by another. A final set of regulations has yet to be issued covering driver and passenger safety as well as the setting of fares.

Grab, they point out, has been the subject of complaints about their service. There is something unseemly about its entry through the backdoor.

Move It manager Wayne Jacinto, for his part, argues that both parties informed Congress and the DOTr about the acquisition – even as the previous administration’s TWG might be considered co-terminus with the previous administration.

Nevertheless, the groups opposing the acquisition are asking the TWG (even if it might have been disbanded) to take a careful look into the matter and exercise a regulatory role in the acquisition. That is another discombobulating issue thrown onto Sec. Jimmy Bautista’s desk.

Undervalued

The controversial award of a massive reclamation project is another case of regulatory agencies reluctant to exercise their functions.

The reclamation project, a joint venture between the City of Manila and Waterfront, quoted a low valuation of their undertaking. Going by their own numbers, the cost for reclaiming and developing 318 hectares of Manila Bay comes to a ridiculous P10,000 per hectare.

Confronted with the issue, the Philippine Reclamation Authority (PRA) that proceeded with indecent haste in giving the proponents the go-ahead days after a new judge reversed an earlier ruling, professed to using a “flexible” valuation for the proposed project. No one there seems to know exactly what a “flexible” valuation is.

After long litigation, Makati RTC Judge Benjamin Pozon nullified the City of Manila-Waterfront project on the clear ground that the PRA failed to conduct a public bidding on this. After the good judge retired, his successor quickly reversed the ruling. The PRA was in greater hurry to see the project commence.

A proper public bidding should have set the valuation of the joint venture. Since there was no public bidding, the PRA now tells us the valuation is actually “flexible.” The better word might be “fishy.” The proponents appear to be plucking their numbers out of thin air.

The City of Manila-Waterfront project has another problem that due diligence on the part of PRA might have averted. The proposed project encroaches into a large part of the area awarded to another company for another reclamation project back in 1991. This other project, unlike the City of Manila-Waterfront proposal, was awarded after a proper bidding process.

The encroachment set the ground for yet another long litigation. If the PRA was more prudent, they should have allowed this issue to be settled before encouraging Waterfront to proceed full speed in carving out their project from the Bay.

Three events must now be closely scrutinized by whatever competent agency there is to oversee this matter. First, is the quick reversal of Judge Pozon’s earlier ruling judicially tenable? Second, is the PRA at all interested in having a public bidding for purposes of giving away part of the Bay? Third, shouldn’t the PRA address both the undervaluation and encroachment issues before showing clear (and suspicious) preference for one project?

Like the other controversies that cost former executive secretary Vic Rodriguez his job, this one must also rise to the Office of the President.