DOTC, Busan group seal MRT-3 maintenance contract

The Department of Transportation and Communications (DOTC) has signed the three-year maintenance contract for the Metro Rail Transit Line 3 (MRT-3) system with the joint venture of Busan Transportation Corporation, Edison Development & Construction, Tramat Mercantile, Inc., TMICorp Inc., and Castan Corporation.

Despite rumors that it wants out of the deal, the South Korean-Filipino joint venture has signed the three-year, P3.81-billion contract which entails the general overhaul of 43 coaches, the total replacement of the signaling system within 24 months, and the maintenance works of the MRT system.

The deal was signed on Thursday, the Department said Friday.
 
“We are one step closer to having a safer and more reliable MRT-3 system with our new world-class rail maintenance service provider," Transportation Secretary Joseph Emilio Abaya said.

"With the operator of the Busan railway network in South Korea sharing their technical expertise, the riding public can expect an increase in the number of running trains and the efficiency of operations,” the Cabinet official said.
 
Starting Friday, the Busan consortium will undertake maintenance works of the rolling stock and signaling system – the most critical maintenance discipline, according to the department.

Twelve qualified technical experts, including rolling stock, signaling, and track specialists, from Busan are already carrying out the necessary activities for transition and system assessment, the department added.

Bidding failed

According to the DOTC, Busan has been operating and maintaining four lines of the mass transit system in South Korea since 1999, "demonstrating their capacity to manage the maintenance works and facility upgrades as stated in the contract."

The government attempted to bid out the contract in September 2014 and January 2015 but failed as no company made any bid.

This situation prompted the DOTC to resort to an alternative mode of procurement in line with the Government Procurement Reform Act of 2003, to be able to hasten the process. It cited the dire need to address the mass rail system's maintenance.

The government Invited several companies to make an offer for the maintenance contract but under a negotiated deal, including SMRT International, Hamburg-Consult GmbH, Korea Railroad Corp., Busan Transportation Corp., and Schunk Bahn-und Industrietechnik GmbH and Comm Builders & Technology Joint Venture.

The transportation department said the alternative process was unanimously approved by the Government Procurement Policy Board (GPPB).

However, this raised certain concerns for Busan Transportation Corp. which reportedly wanted out of the deal due to the worries the company may face after the deal was awarded through a negotiated procurement.

For his part, Abaya on Sunday noted the GPPB gave the DOTC the green light to explore alternative modes of procurement after the two failed biddings.

"Lima ang lumahok at nakipag-ugnayan. Binigyan namin sila ng terms of reference, bumili sila ng bidding documents. 'Di ko alam kung anong scam dito," Abaya told dzBB radio.

Awarded on Christmas Eve

The three-year contract was awarded by the DOTC to the Korean-Filipino venture on Christmas Eve.

"The long contract period will allow the new service provider to procure the necessary spare parts needed to increase the number of operating trains, especially during peak hours," the DOTC said.

The Korean-Filipino group will take over the MRT-3 maintenance from another joint venture – between Germany's Schunk Bahn-und Industrietechnik GmbH and the Philippines'Comm Builders & Technology Phils. Corp. (SBI-CB&T JV) – under a six-month, P131.28-million contract that expired on January 4.

However, SBI-CB&T sued the governmnet for breach of contract. Its officials were barred from entering their office at the North Avenue MRT-3 station supposedly on orders of MRT-3 General Manager Roman Buenafe, after the case was filed in court.

The joint venture filed a graft case against Buenafe and four other government officials for supposedly not paying for spare parts and maintenance services.

SBI-CB&T claimed that of the total contract price of P131,279,801.27, they have only been paid P28,657,232.51, with the balance of P102,622,568.76 remaining open in their books.

Aside from the new contractor, the MRT is also waiting for the new light rail vehicles (LRVs) ordered by the Philippine government from China.

According to Abaya, the riding public can expect to see the first three train coaches which arrived in the country last December in service by the first quarter this year.

"'Yung test run... January or February, as soon as dumating 'yung consultant at i-clear ng Dalian officers na pwede nang gawin 'yung test run dahil kailangan andiyan din sila. But definitely, i-a-announce namin sa media kung kailan gagawin 'yung test runs," Abaya also told dzBB.

Dalian Locomotive won the bidding to supply the MRT-3 with new train coaches.

According to the Cabinet official, the capacity of the MRT-3 is going to expand by as much as 67 percent once all the 48 light rail vehicles become operational. – with Jon Viktor Cabuenas/VS, GMA News