DOTC: Gov’t saved P3.35B in MRT bid

MANILA, Philippines – By bidding out the contract for the acquisition of brand new trains for the Metro Rail Transit line 3 (MRT3), the government saved P3.35 billion.

This was the statement issued by the Department of Transportation and Communications (DOTC) on Sunday, May 4, following suggestions it should have awarded the contract for the acquisition of 48 train coaches to a Czech company through a negotiated bid.

Transportation Secretary Joseph Emilio Abaya said the agency’s decision to call for an open bidding for the P3.8 billion MRT3 capacity expansion project resulted in savings.

“The decision to bid the project out resulted in almost P 3.5 billion in savings, without sacrificing the quality of the train coaches. Those savings can now be used in other programs which will also improve public services. This is in accordance with our push for reforms and good governance at the DOTC,” he said.

Abaya said Chinese company Dalian Locomotive and Rolling Stock Co. won the contract with its bid of US$86.4 million for the 48 coaches.

In contrast, the price of Czech company Inekon was $3.355 million for each coach, or a total of $160.8 million for 48 coaches.

The difference amounted to $74.4 million or P3.348 billion using a conversion rate of P45 to $1.

Abaya added, “That is how much the government saved. Or would have lost, had the contract been awarded to Inekon without opening the project to other bidders.”

Extortion attempt

The agency came under scrutiny after Czech Ambassador Josef Rychtar accused transport officials of trying to extort $30 million from Inekon to bag the contract.

When it refused, Rychtar said the DOTC allegedly blacklisted the Inekon Group from the bidding process.

Over time, the Czech envoy’s accounts of the extortion attempt changed. He initially implicated one of President Benigno Aquino III’s sisters, before recanting and claiming only high-ranking officials at the DOTC were involved. He later said the attempt was initiated by the sister of MRT general manager Al Vitangcol III.

Both Vitangcol and Abaya have repeatedly denied the accusations. Abaya said the Czech group was invited to participate in the bidding, but did not do so despite already purchasing bid documents.

The DOTC said it adopted the open bidding as part of reforms under the Aquino administration.

“It was adopted to prevent price manipulation, which is often the case in a negotiated bidding process,” Abaya explained.

Under the expansion program, the government would acquire 48 new coaches to be delivered in batches until May 2016.

The new trains are expected to speed up commuter travel time, with the use of 4-car trains that would arrive every 2.5 minutes during peak hours.

Currently, the MRT3 line uses a 3-car train system that arrives every 3 minutes during peak hours. – Rappler.com