MRT-3 Woes: Why aren’t we outraged that the DOTC, manned by Aquino’s officials, are taking us for fools?

Part 1. MRT-3 mess the worst kind of corruption

October 5, 2014 11:14 pm; Appeared in the October 6, 2014 edition of the Manila Times

Why shouldn’t it be derailed? Memo that only 2.5 pieces of rail replacement available. Inset: MRT-3 car derailed in August.

Why do MRT-3 trains keep breaking down that the train system needs to be shut down for hours at times; why do the trains stop in the middle of the tracks, and why are the trains derailed and jump off the tracks?

Why are there fewer trains now compared with the previous years such that its carrying capacity has decreased, causing the long queues of commuters at the stations?

Why were there no such incidents and queues before, from 2000 to 2011?

The reason is quite simple, and I was astonished when I learned its details, shocked at why we Filipinos allow such anomalies that torture the working class daily, and outraged that mainstream media hasn’t gone to town against this scandal.

The P1.2 billion reason
The reason involves the P1.2 billion—so far—in maintenance contracts given by the DOTC starting October 2012 to two firms that appear to have close ties with President Aquino’s political allies.

These outfits – first PH Trams and then APT-Global – turned out either to be bumbling amateurs in light-rail vehicle maintenance, or decided to skimp on the necessary spare parts to keep the trains running efficiently.

They didn’t import and stockpile the high-quality spare parts needed for the light-rail vehicles and the replacements for the tracks. Parts were, instead, cannibalized from the other cars that were put out of operation, so that only 50 out of the 73 cars operating in 2011 are running now.

One evidence of this is a September 4, 2014 report to the DOTC official in charge of the MRT-3, Renato San Jose, which read:

When Global-APT JV assumed as (sic) the Temporary Maintenance Provider of MRT 2 on 4 September 2013, there were twenty nine pieces of Stock Rails replacement. Since then, the said number has gone down to two and a half (2.5) pieces. Furthermore, the latest Rail Replacement Summary as of 06 August revealed that in at least two instances, Global APT JV has used old rails instead of new ones.

This is one reason why the trains’ speed has had to be slowed down: parts of the track had worn out and should have been replaced, but hadn’t because there were no replacement rails. The result: fewer trains have been running, requiring commuters to queue for hours to ride the jam-packed, not to mention, dangerous trains.

Capital costs are huge for a train maintenance operator since the spare parts needed have to be ordered in advance because of the minimum six-months’ time for these to be manufactured and shipped to the country from abroad.

Light-rail system parts aren’t exactly items one could buy at the hardware store or ordered at amazon.com: They’re things made of high-grade steel which mostly only the original builder can provide, and on a “per-order” basis.

A unit of the giant manufacturing Japanese firm Sumitomo that built MRT-3 with Mitsubishi Corp. in the late 1990s, when it maintained the system until September 2012, had a six-months’ inventory of the usual parts needed to be replaced.

Manual signaling system
There is a second reason why the MRT trains’ speed had to be reduced. Its signaling system – its computerized, sensor-based network that manages railway traffic in order to prevent trains from colliding – had been built more than a decade ago by a unit of the Canadian aircraft manufacturer Bombardier Inc. The firm informed the DOTC in 2010 that the system had to be upgraded, as there were no longer parts for it since it had become outdated.

The upgrade would have cost P185 million, and included in the maintenance contract. It wasn’t. Why? Was it too big a cost that would eat into the contractors’ profits?

Bombardier engineers who were initially hired by PH Trams to maintain the signaling system reportedly left in a huff in 2013 when they stopped receiving their due fees.

The result: There’s an inadequate signaling system that train operators have resorted to a manual method, using “walkie-talkies’ bought from Ace or True Value, to report their positions, a process that requires much slower train speeds.

Out of the total cost for maintaining the MRT in the past ten years, 60 percent was used for buying spare parts for the cars and rail-tracks, as well as for maintaining the computerized signaling system, while the remaining 40 percent was for management and labor costs.

These means that if the two maintenance operators who got the P1.2 billion contract from the DOTC had not purchased the parts needed for the trains’ maintenance, they could have easily pocketed the 60 percent that should have been used for their parts inventory, which means a huge P742 million income. The Senate committee that has been investigating the MRT problems should subpoena these firms’ books.

What makes this kind of corruption so outrageous is that the grafters were as dumb as they were so arrogant. They thought they could make money by taking over the contract of a world-class, experienced engineering firm that built and had maintained the system for a decade, and that they didn’t need to import the high-grade precision-engineered spare parts for the trains.

I can just imagine what a top DOTC and Liberal Party official told his accomplices: “Pukpok lang naman ang mga kailangan sa mga bakal na gulong at riles na iyan, hindi na kailangang mag-import tayo ng spare parts kaya malaki ang kita natin. Magagaling naman ang mga Pinoy na mekaniko. [A little pounding is all that’s needed on the steel wheels and the rails. We don’t really need to import the spare parts, so we’re going to make a killing on this. And Filipinos are good mechanics.]

Because of such arrogant stupidity and insatiable greed of Aquino’s people, hundreds of thousands of Filipino commuters have been suffering every day going to and from their workplaces.

Continued next week.

Part 2. MRT-3 may collapse anytime

October 7, 2014 11:04 pm; Appeared in the October 8, 2014 edition of the Manila Times

Second of three parts

That warning was made back in September 2011 by TES Philippines (TESP) Inc., which has been the maintenance operator of the Metro Rail Transit System Line 3 (MRT-3) since 2000. The firm is a joint venture of Sumitomo and Mitsubishi Corporation, the two Japanese companies that built the light-rail mass-transit infrastructure in the late 1990s.

President Benigno S. Aquino 3rd to date has failed to implement the solution the TESP said was the only solution to prevent such collapse: Immediately supply an additional fleet of trains and upgrade the electrical and electronic systems supporting it.

We are just plain lucky that the relevant incidents that have occurred so far have only involved trains that had stopped mid-way between stations, car doors that had remained opened even as the train had sped away toward its next destination, and a car that got derailed, plowing its way into a busy thoroughfare in August. But given the bad state of MRT-3 since 2011, according to the firms that built it and had maintained it for a decade, it is a disaster waiting to happen.

I thought it was another case of incompetence bordering on criminal negligence by this student-council government, as former Senator Joker Arroyo vividly described this Administration. It is appearing, though, to be the consequences of a case of a botched extortion attempt.

I cannot find enough words to express my outrage: The solution had been delayed for three years now because the Czech firm, Inekon Group, which was supposed to supply the new fleet of trains, refused to play ball, and protested the alleged attempt by transport and communications officials to extort $30 million as bribe for the $174 million contract to push through.

The DOTC did finally find a supplier to replace Inekon – a Chinese firm, but which reportedly has no experience in building the kind of double-articulated light-rail system that the MRT-3 uses. But even if it manages to manufacture the cars, the next question is, when will the delivery be? Late 2015, the DOTC says. No way, industry sources say, predicting that it will be in 2016 at the earliest, after Aquino steps down.

And I’m sure DOTC Secretary Emilio Abaya would vouch that this Chinese firm didn’t have to pay a single centavo of bribe money for the P4 billion supply contract it got without any bidding. The Chinese just don’t do that kind of hanky-panky.

With the increase in ridership in the four years since that 2011 warning was made, and the reduction of train cars from 72 to just 50 running now, this Administration has criminally subjected our commuters to the risk of death and injury if the MRT trains do collapse.

In a detailed six-page memorandum dated 21 September 2011 to Honorio Vitasa, then general manager of the transport and communications department’ MRT3-EDSA Line unit, maintenance operator TESP President Kiyoshi Morita said that the train cars’ “overloaded condition exceeded the maximum allowable ridership, which will give mechanical and electrical stress to equipment and damage (sic) the total train system.”

Eventual Collapse
“Eventual collapse of the rolling Stock System and even the Wayside system may happen if drastic and immediate changes will not be made,” Morita warned. (The rolling stock refers to the light-rail vehicle cars, while the “wayside system” refers to the tracks and the electrical/electronic systems to keep the cars on it.)

Morita provided statistics which showed that ridership increased from 11.5 million in August 2005 to 13.8 million in the same month in 2011, which is way beyond the number of passengers the light-rail vehicles were designed to carry. On weekdays, according to Morita, the average ridership had increased from 417,000 in 2005 to 510,000 by 2011.

Using Morita’s annual figures from 2005 to 2011 to derive the annual average rate of increase of 7 percent annually in daily ridership, MRT-3 would now be carrying—dangerously—625,000 passengers daily, nearly double the 350,000 people it was designed to transport per day.

Morita in his memorandum explained: “Since the year 1999, TESP has already made many countermeasures and changes to prevent the recurrence of many failures. Seemingly and theoretically and based on the maintenance manual, these improvements will result in better performance of the trains.”

“However, with this overloading situation, it is very difficult to recover the peak performance of the trains in spite of the many changes that it has implemented because this is beyond the capacity of the trains to perform normally and recover after serious stress,” the memorandum read.

He explained: “Please note that even if overloading is experienced only for a few times, the elevated stress will weaken the electrical and mechanical properties of the equipment. In the case of MRT-3, the number of passengers onboard the trains exceeded daily, except Sundays [emphasis in the original], the maximum number (394) allowed per car.

“Consequently, failure resulting in the abnormal removal of trains, and a major incident will be experienced,” according to Morita, who put that sentence in bold and underlined it for emphasis.

Morita, though, was writing in that peculiar Japanese way of understating things.

What he really, obviously meant for “abnormal removal” was the derailment of a train or a portion of it (which had already actually happened)—a grave disaster if a car on an elevated portion of the tracks were to be derailed and fall on cars and buses along EDSA, which is what the Japanese executive was likely referring to when he used the term “major incident.”

“Worse,” according to Morita, “breakdown of the vital equipment may occur at almost the same time and this will affect the secondary and minor equipment. At this point, any good maintenance may not be enough to recover the regular performance of the trains, and safety will be compromised. Also, maintenance will be too costly and impractical to perform, while the recovery and safety may not be “assured.”

To the junk shop
Again, the Japanese executive was being polite. What he obviously meant: “If breakdown of the system finally happens, you’d be better off just selling the MRT to the junk shop.”

Morita explained that temporary solutions, which his firm in fact had been doing, involve shortening the cycle for the cars’ preventive maintenance periods, and taking measures to reduce the number of passengers on the cars.

However, Morita emphasized: “These are not enough to solve the problem on the deterioration and early ageing of the equipment, which was already evident. Eventually because of the steady increase in passengers, the Rolling stock and the wayside equipment will again experience many failures and troubles.”

Morita recommended: “We need to pursue the capacity expansion project of the MRT3-system to provide additional trains for revenue service. By adding more trains at the main line, we will relieve the present MRT-3 trains from overloading and prolong the life by having lesser electrical and mechanical load on the trains. We need to upgrade the wayside equipment to accommodate the changes and slow down the system’s deterioration.”

Morita concluded his memorandum by emphasizing his warning: “We reiterate that the train and the system of the MRT-3 are designed for a maximum capacity of 394 persons per car. If more passengers than the maximum capacity ride the train even for a short time, the train system might be damaged. The overloading would have detrimental effects resulting in the shorter life of parts and early deterioration of the trains and may lead to a breakdown and the total collapse of the Rolling stock.”

So, did this Administration heed Morita’s warning?

Yes, and no. And the story behind the “yes” and the “no” will outrage you, enough for you to wish that this Administration would go to hell ASAP, I guarantee that. Read about it on Friday.

CHINA STATE FIRM TO SUPPLY TRAINS

Part 3. Why isn’t the Senate investigating the outrageous P4-B MRT deal?

October 14, 2014 11:50 pm; Appeared in the October 15, 2014 edition of the Manila Times

Third of a three-part series

I’m referring to the contract signed by the Department of Transportation and Communications (DOTC) with a Chinese firm in June to buy 48 light-rail train cars for the decrepit Metro Rail Transit Line 3 (MRT-3) worth P3.9 billion.

It’s certainly a bit ironic: A state-owned company of a country, which President Aquino has called a bully in claiming our territory, has bagged not only a huge procurement government contract under his watch, but a strategic one involving the safety of our main metropolitan mass transit system, the MRT-3.

Maybe it’s so stupid of us as a nation, but so brazen – and arrogant that they believed they could get away with it – for the DOTC officials to have done so. Consider the facts:

The Czech Ambassador to the Philippines Joseph Rychtar alleged in April last year that the DOTC’s MRT-3 general manager Al Vitangcol 3rd asked $30 million (P1.3 billion), in bribes for the Czech firm Inekon Group to be given the contract to supply 52 new light-rail vehicles (LRVs, or the train cars) for the mass transit system. Rychtar alleged Vitangcol was extorting the money for a group that included personalities closely linked with the Liberal Party.

This occurred, he claimed, in July 2012. That was when the DOTC was still headed by Mar Roxas. It is not known whether Roxas’ transfer just a month later to the interior and local government department was related to the bribery attempt.

(The reason why Inekon, the fourth largest supplier of LRVs in the world, was keen on the contract is that it had pirated train engineers from CKD Tatra, which was the original supplier of MRT-3 trains, and therefore was confident it could build the right trains and within schedule. CKD Tatra had gone bankrupt in the early 2000s and was sold to a German engineering firm.)

A political earthquake

As an ambassador for five years (to Greece and Cyprus), I can say without a doubt that such an accusation of high-level corruption by an envoy against officials of the host government is a political earthquake. In countries complying with the rule of law and with an independent press, that would have required the host government dropping everything to get to the bottom of such serious allegations. If we only had a fiercely independent press that was not under Aquino’s influence, I’m sure this government would have already been toppled in the wake of such scandal.

What makes the ambassador’s allegation credible, that it could have involved the highest levels of this government, is that funding for the contract was made available at that time, unknown to most people, but told to the Czechs.

This was because Budget Secretary Florencio Abad had, at that time, hijacked the Congress-approved budget through his scheme that was euphemistically termed the “Disbursement Acceleration Plan.” Through the DAP, which was exposed only last year, Abad issued on the last day of the year (Dec. 28, 2011) what was called a “Notice of Cash Allotment” (NCA-BMB-A-11-0023872) to the DOTC.

The NCA informed the DOTC that P4.5 billion was already in the Land Bank of the Philippines for the department to use for the “capacity expansion of MRT3,” which meant money was available for the purchase of new trains to add to its 50 odd cars in service.

I was told that the Czech ambassador had been told that if Inekon agreed to the “arrangement” for the payment of $30 million, the contract would be awarded in a few days’ time and payment for the contract made right after that.

Sorry I have to use that worn-out cliché: Only in the Philippines. After the extortion attempt was exposed by the Manila Times’ chairman emeritus Dante Ang Sr. on June 2013, DOTC Secretary Emilio Abaya matter-of-factly vouched for his official, while presidential spokespersons muttered their overused “we-will-investigate” replies.

Suspended a year later
Vitangcol would even remain in his post, and was suspended only a year later for involvement in another allegation of corruption – one of his relatives and his friends were part of the firm that got the P600-million maintenance contract for MRT-3.

In his statement submitted in May to a committee of Congress investigating the allegations, Rychtar said: “I, as the Ambassador of the Czech Republic, confirm that an extortion attempt took place in July 2012, followed by other suspicious circumstances, which led to a questionable bidding process in March 2013.”

He added: “I wish to inform you… that the Czech company Inekon Group was, of course, not blacklisted officially by the DOTC, but we did receive the informal information that our proposal would not be entertained, which was manifested by the fact that our letters to DOTC (asking about how to participate in the bidding) were unanswered.”

The bidding the Czech ambassador was referring to actually was done on June 11, 2013, which, unlike most government biddings, was not open to media. DOTC spokesman Michael Sagcal would only reveal the results of the bidding after it has taken place:

“Two Chinese companies participated in the bidding, Dalian Locomotive & Rolling Stock Co. CNR Group and CSR Zhuzhou Electric Locomotive Co. Ltd.”

“CSR Zhuzhou was declared ineligible by the DOTC’s Bids and Awards Committee due to its failure to submit a certificate of reciprocity and to comply with a technical requirement. As a result, its financial proposal was no longer opened,” the spokesman said.

What a charade.

The “CNR” in the CNR Group, of which Dalian Locomotive and Rolling Stock Company is a member firm, stands for China North Railway, while the CSR in CSR Group Zhuzhou Electric Locomotive Co. Ltd is an acronym for China South Railway.

If their names seem the same except for the “North” and “South” adjectives, it is because both were formed in the 2000 and 2002 period out of the mammoth “China National Railway Locomotive & Rolling Stock Industry Corporation,” the monopoly in train service in the country. As with the original mother company, the two firms are both state-owned enterprises supervised by the State Council of the People’s Republic of China, and likely under a single commissar.

In short, the two bidders were two firms owned by the same entity, China, and the DOTC claims there was a proper bidding?

Given our quarrel with China, shouldn’t we be realistic and worry that if our relations get worse with that superpower, it may decide to chuck unilaterally that deal, give some convoluted excuse for doing so, then watch the MRT-3 collapse with its decrepit trains, and gloat at the resulting political chaos here? Have the DOTC officials compromised our national security?

LRV manufacturers
There has been a boom in light-rail mass transit systems in the world because of environmental concerns and the US’ recent rush to adopt the technology. Hence, there are more than a dozen LRV manufacturers today. The four firms that have the biggest shares are Germany’s Siemens (which bought CKD Tatra, the company that manufactured the first MRT-3 trains), the Japanese Kinki Sharyo, the American United Streetcar, and the Czech Inekon. Other LRV manufacturers are the Canadian Bombardier Transportation, the Austrian Lohner-Werke, the Swiss Stadler Rail, the German Duewag, and CAF USA.

None of these firms, if we are to believe the DOTC, were interested in supplying MRT-3 with their LRVs? Only the Chinese Dalian, which hasn’t manufactured the kind of LRVs needed by MRT-3, showed an interest?

And why this Chinese firm, which on its website itself says that the MRT-3 deal is the first contract it has obtained to build such type of LRVs? It even noted that the LRVs will operate in extreme conditions, “close to the equator, where the monthly maximum temperatures are above 30 degrees, the air humidity and salt content high, and with a complex weather with typhoons and rainstorms.”

And when will the Chinese deliver its 48 trains? “The first train is scheduled for delivery in 18 months,” its website reported in June. That means we will see a prototype only at the end of next year. Delivery of the trains is likely to happen after Aquino steps down from office and bunkers down in Hacienda Luisita.

Why aren’t we outraged that the DOTC, manned by Aquino’s officials, are taking us for fools?

DOTC officials are accused by a reputable Czech firm Inekon of trying to extort money for the contract to supply MRT-3’s new trains. The DOTC undertakes, less than a year later, a bidding Inekon did not, or could not participate in. A Chinese firm with no experience in LRV manufacturing “wins” in a bidding participated in by its sister company.

And there is nothing fishy in that?

What we should all be livid over is this:

If the Czech envoy’s accusations are proven right, that means Aquino’s officials had delayed the procurement of new trains—which would have made MRT-3 safer and reliable, and reduced commuters’ waiting time—in order to make money for themselves and more likely for the Liberal Party, and I would suspect also for this President. That’s the worst kind of corruption. Even our national security has been compromised.

End

Blogger's Note:  I did not write this article, Amb. Rigoberto Tiglao did.  This article appeared in the Manila Times in three (3) parts, the first part appearing on the October 6, 2014 issue, the second on October 8 and the third on October 15, 2014.  Assuming that his information is correct and suspending, for the moment, Tiglao's bias against the present administration, we find that he actually asks a very important question: "why aren't we outraged that the DOTC, manned by Aquino's officials, are taking us for fools?"  Have we so totally fallen for the Daang Matuwid sloagan that he and his minions have been bombarding us with for the past 4 years?  One will also notice that all of the space devoted for in the news and in blogs have been all about the corruption of the Vice President.  Some commenters in the online edition of the Manila Times have questioned its decision to run this piece by Tiglao instead of running another off the mill story about the Binays.  I actually support the Times decision to run this piece on the ground of materiality.  What is the point of running stories on Binay? It will ultimately have no effect on the day to day running of Daang Matuwid.  What power does Binay have now?  Apparently, his popularity has got the Administration scared shitless which is why they would mount a black propaganda campaign long before the scheduled elections.  In any case, I chose to run the full piece here because I think it is worth reading all in one go, rather than in parts, so we can all ask ourselves, "why aren't we outraged???"