Vitangcol: Uncle-in-law divested before MRT 3 contract awarding

Angela Casauay
Vitangcol: Uncle-in-law divested before MRT 3 contract awarding
A solon offers a theory on the possible role PH Trams played in the alleged $30 million extortion attempt

MANILA, Philippines – For resigned Metro Railways Transit (MRT) 3 general manager Al Vitangcol, there was no need to disclose that he had an uncle-in-law at a company that won a maintenance contract for MRT 3. 

This is because his wife’s uncle, Arturo Soriano, had already sold his shares before the contract was awarded, Vitangcol said in a hearing at the House of Representatives Tuesday, May 27. 

Vitangcol said it was he himself who asked his uncle-in-law to leave the company, PH Trams, after finding out that he was an incorporator. PH Trams bagged a 9-month contract for the upkeep of MRT 3 in 2012 as part of a joint venture with CB&T JV. 

“I directly told him that it would improper both on his part and on my part,” Vitangcol said. 

Soriano’s fellow PH Trams incorporator, Wilson de Vera, who ran for mayor of Calasiao, Pangasinan in 2013, is one of the individuals accused by Czech Ambassador to the Philippines Josef Rychtar of extorting $30 million from Czech company Inekon Group in exchange for an MRT 3 contract. 

Vitangcol went on leave following the controversy. Just as it was dying down, Philippine Star columnist Jarius Bondoc revealed the connection between Vitangcol and PH Trams. 

The issue triggered the relief, and eventual resignation, of Vitangcol as MRT chief. (READ: Sacked or resigned? It’s both, says Vitangcol)

During the hearing, Vitangcol said Soriano divested from PH Trams mid-September 2012. It was around the same time the public bidding was in process. 

By the time the contract was awarded to PH Trams in October 2012, Soriano was no longer an incorporator, Vitangcol said. 

Ilocos Norte 1st district Rep Rodolfo Fariñas did not buy into Vitangcol’s argument. 

Yun na ang tinatawag nating kaliwaan (That’s what we call an excuse),” Fariñas said. “Para hindi mahuli, naghugas (To avoid being caught, you wash your hands).” 

Why did DOTC fail to conduct due diligence?

MRT Corporation (MRTC) is a private company that oversees the maintenance of the MRT system. MRTC, however, failed to bid out a new contract when its maintenance agreement with Japan’s Sumitomo ended on October 2012, forcing the Department of Transportation and Communications (DOTC) to take over the bidding process. 

With the previous contract about to end and MRTC failing to bid, Transportation and Communications Secretary Jun Abaya told lawmakers DOTC chose to undertake a simplified bidding, in which the agency invited prospective bidders for the contract to fast-track the process. 

DOTC Undersecretary Jose Perpetuo Lotilla said the department prioritized the urgency of having a new maintenance contract rather than conducting due dilligence on any unlawful relations connected with the contract. 

Besides, PH Trams had also included an omnibus declaration that the contract was in accordance with law. 

“The object of the exercise [simplified bidding] was to ensure that there would be a capable maintenance provider. That [unlawful relations] could have been a defect or a side-defect, so to speak, because the heart of the matter was to ensure the safety of the riding public,” Lotilla said.  

Under the law, a simplified bidding may be conducted in the event of an extreme emergency, where public bidding due to lack of time would no longer be feasible. 

Vitangcol and DOTC officials denied the contract was awarded to PH Trams without any bidding process. 

However, they all admitted it was the Bids and Awards Committee (BAC), which included Vitangcol as member, that chose the participants who could bid. 

“In other words, DOTC was also the one to determine to whom the invitation for simplified bidding will be given,” Cavite 4th district Rep Elpidio Barzaga said. 

Asked whether he informed fellow BAC members of the possible complications with his connection with PH Trans, Vitangcol said no, because DOTC had “already provided a deed of sale” anyway. 

Solons to look deeper into MRT maintenance contracts 

Lawmakers during Tuesday’s hearing asked the commitee to look further into the maintenance contracts entered into by MRT 3. 

Vitangcol maintained that Inekon only submitted a proposal for the procurement of 52 additional coaches for MRT, not for any maintenance operations.  

But in his affidavit, Rychtar said Vitangcol showed him an already prepared joint venture agreement for a maintenance company that would involve Inekon and a Filipino partner, enabling the company to comply with the 60-40 rule for foreign ownerships. 

De Vera had earlier admitted asking Inekon to be partner up with PH Trams in connection with the bid. 

“We are offering our company to be their local partner in case their deal with MRT prospers,” De Vera told GMA News on April 7 in a mix of English and Filipino. 

At the time of the alleged extortion attempt in July 2012, PH Trams was a young company. It was only two months old when it bagged the maintenance contract as part of a joint venture with CB&T JV in October 2012. 

Questioning the qualification of PH Trams, ACT Teachers Rep Antonio Tinio offered a “hypothesis” as to the role PH Trams played in the alleged $30 million extortion try. 

“The main thing PH Trams brought to the table is their connection with one of the members of BAC – the general manager,” Tinio said.  

“One hypothesis we can have from all of these is that PH Trams was initially shopping for a joint venture partner, hence, the offer to Inekon,” Tinio said. 

Navotas Rep Toby Tiangco asked Abaya and Vitangcol to assist in locating De Vera, who is believed to be in the United States, so he may be summoned to the hearing. 

Czech Ambassador Josef Rychtar, meanwhile, begged off from attending the investigation. –

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