Court stops DOTC’s purchase of MRT trains

Rappler.com
The court says the purchase may be in violation of private owner Metro Rail Transit Corporation's build-lease-transfer contract with government

MRT EXPANSION SOON? A DOTC team has declared a Chinese firm 'fit' to proceed with the expansion of the MRT-3. File photo by AFP

MANILA, Philippines – The Makati City regional trial court has stopped the Department of Transportation and Communications (DOTC) from acquiring 48 train cars for the Metro Rail Transit (MRT) 3 to expand the rail system’s capacity.

In a two-page order signed on January 30, Makati RTC Branch 66 presiding judge Joselito Villarosa granted the petition of Metro Rail Transit Corporation (MRTC) and Metro Rail Transit Holdings by issuing a 20-day “temporary order of protection” against DOTC.

The order bars the agency from purchasing light rail vehicles (LRVs) from Chinese firm CNR Dailan Locomotive & Rolling Stock Company. 

“Wherefore, premises considered, the ex-parte application for a 20-day temporary order of protection is hereby granted upon the filing of the bond within 5 days from issuance of this order, in the amount of P300 million, to answer for all damages, which respondent may sustain by reason of the TRO if the court should finally decide that the petitioner was not entitled thereto,” Villarosa declared.

“Respondent (DOTC), its officials, employees, agents or any person acting in their behalf are hereby restrained from performing any and all acts related in any manner to its procurement of additional LRVs for the MRT 3 and from committing any act tending to usurp and to violate the rights of MRTC under… the BLT (build-lease-transfer) agreement,” Villarosa added.

DOTC was given 15 days to file a comment to the order and the petition.

The agency received a copy of the order Tuesday, February 4, spokesperson Atty. Michael Sagcal told Rappler in a text message. “Our legal department is now reviewing it. We are ready to explain our position on additing MRT coaches for the benefit of riders.”

Last January 16, Dailan Locomotive was awarded the P3.77-billion contract for MRT 3’s expansion. Earlier, DOTC Secretary Joseph Emilio Abaya said a post-evaluation showed the company was “fit to do the project.” (READ: Chinese firm ‘fit’ for MRT expansion project)

The government is buying new LRVs for MRT to cut waiting time at stations and decongest the system. Currently, MRT 3 has 73 coaches serving passengers at 3-minute intervals. The 17-kilometer rail line runs from North Avenue in Quezon City to Taft Avenue in Pasay City.

MRTC, which signed a BLT agreement with DOTC for MRT 3 in 1999, wants to stop the acquisition, saying it violates the agreement.

Villarosa noted that among the rights assigned to MRTC under the BLT contract was a provision that it will only lose its preferential right to supply LRVs in either one of two instances: if MRTC is in breach of its obligation under the BLT or if MRTC consents to DOTC’s use of LRVs not provided by MRTC.

But DOTC decided to bid out the contract for the procurement of new MRT 3 trains.

“After painstaking and assiduous perusal of the records of the case, the Court finds that there is an urgent need to either a) preserve property, b) prevent the respondent from disposing of, or concealing, the property, or c) prevent the relief prayed for from becoming illusory because of prior notice,” Villarosa said.

“The court finds that the reasons given by the petitioners are meritorious. The court hinges its ruling on the fact that petitioners have neither breached their obligation under the agreement or much more gave its consent to the DOTC pursuant to section 5.2 of their agreement,” the judge stressed.

The government is eyeing to take over MRTC this year to have a free hand in deciding the operations and maintenance of the rail system along EDSA. The buyout of private owners will also allow the government to save billions of pesos in fees paid annually. (READ: P56-B budget for MRT buyout ready)

Manuel Pangilinan-led Metro Pacific Investments Corporation owns majority of MRTC. Government banks Land Bank of the Philippines and Development Bank of the Philippines hold a combined 80% economic interest, but no voting rights.

The MRT 3 carries 600,000 passengers a day, way above its design capacity of 350,000. – Rappler.com