Press Release
May 23, 2017

Transcript of Sen. Grace Poe's closing remarks
2nd Hearing on the MRT issues

In today's hearing, the Senate Committee on Public Services discussed again the seemingly never-ending problem that is the MRT.

We started by emphasizing the derailments which happened after the annual maintenance check-up. We reminded Mr. Marlo dela Cruz and his lawyers that the sub judice rule is not applicable in legislative inquiries as the purpose of this inquiry is in aid of legislation. We requested the OSAA to furnish Mr. Dela Cruz' lawyers with a copy of the subpoena and secure his correct address.

Usec. Chavez of the DOTr identified the major problems hounding the MRT and admits that the DOTr still has no expertise to operate the MRT-3. Nevertheless, they have now identified the problems and the corresponding solutions. We appreciate your proposals for the solutions.

Usec. Chavez started off by saying that capital spare parts should have been procured by DOTr; only consumable spare parts should be provided by the maintenance provider. Under the current maintenance contract, BURI is in charge of procuring all spare parts.

But it seems that this duty of BURI under the contract was not complied with. There was no intent to procure capital spare parts under the first six months of the contract. It takes at least eight months to one and a half years to procure spare parts. This is exactly the reason why MRT is derailing, at tumitirik kahit na kakatapos lamang ng annual maintenance during the Holy Week. Dapat, pagkatapos ng annual maintenance, pinaka-maganda ang takbo ng MRT.

Despite these problems, BURI demanded a lumpsum payment of the P54-million monthly maintenance bill. DOTr said they deducted from BURI's billables unsupported claims-P15.8-million worth of spare parts which BURI wants paid but without supporting documents.

Under the contract, BURI should have delivered 17 overhauled LRVs now. This was not done, dalawa pa lang ang nadeliver. Kung nasunod lang ang obligasyon sa kontrata na mag-general overhaul, wala dapat derailment.

Usec. Chavez highlighted the absurd situation under the Dalian procurement of 48 new LRVs. One year after they decided to buy a Dalian train with Bombardier signalling, they signed another contract to replace the signaling, this time with BURI.

In this hearing, the DOTr committed to the following:

1. The maintenance portion of the BURI contract will be terminated, with respect to due process. The fact that trains are derailing is enough evidence to terminate the contract;

2. A Maintenance Transition Team will be formed to take over;

3. However, DOTr will insist on the general overhauling portion of the BURI contract;

4. Adhering to a strict schedule for the provision of ancillary services; and

5. Assuming these plans will be implemented to a tee, it is possible that we will see a marked improvement in the MRT operations by December this year.

Next, we went into the involvement of a certain Mr. Marlo dela Cruz - a name which keeps on cropping up in the problematic maintenance contracts from the past to the present. Mr. Roehl Bacar, president of CB&T, was asked how these maintenance contracts were bagged.

Mr. Bacar was approached by PH Trams, one of the first maintenance providers that came after Sumitomo.

Mr. Bacar was confident that they would bag the MRT maintenance contract because the personalities of PH Trams bragged about their connections with the Liberal Party. Negotiations started with Sec. Roxas but was completed under Sec. Abaya. The discussions were facilitated by Mr. Marlo dela Cruz.

Admittedly, the fact of affiliations alone does not make the maintenance contracts problematic. The bigger problem lies in the fact that PH Trams, presumably, like all the other problematic maintenance contracts, did not deliver their end of the bargain. Maintenance providers brokered by Mr. Marlo dela Cruz were able to bag contracts even when the corporations never delivered their end of the bargain. In fact, Mr. Marlo Dela Cruz signed a waiver releasing CB&T of their liability for not having been able to purchase the spare parts, so CB&T had to take over that responsibility.

Atty. Vitangcol, for his part, exposed an alleged email correspondence between a certain Rapanut, another Liberal Party member and De Mesa promising a 5% commission for unnamed DOTC officials in order to broker the Dalian contract. This is now subject of a separate Ombudsman complaint.

GM Vitangcol sums up by saying that the P3.8-billion Dalian contract is definitely disadvantageous to the government.

On this note, Atty. Dennis Santiago of the Government Procurement Policy Board said that under the law, the people liable for entering into these disadvantageous contracts are the members of the Bids and Awards Committee (BAC), the Technical Working Group (TWG), the end-user, and the head of the procuring entity. This means that the Secretary of the DOTC may be implicated, at least for the Dalian contract.

As for the multi-billion BURI maintenance contract, Usec. Lopez as head of the procuring entity, Usec. Limcaoco as head of the BAC, and other personalities which our officials conveniently cannot recall, were involved.

First of all, meron na tayong contract for the signaling system with BURI...tapos pumayag pa ang BAC na magkaroon ng isa pang kontrata sa Dalian. Nakita ninyo ang redundancy, wala talagang--sabihin nating let's give them the benefit of the doubt, di sila nag-aral ng kanilang kontrata, may kapabayaan doon.

Apparently the DOTr and BURI disagree as to the interpretation of the maintenance contract. DOTr maintains that the contract should not have been awarded to begin with as there was no bill of quantities submitted that should have justified the cost of the contract.

I'm sorry to say that even the BAC cannot remember, on the top of their heads, if there was a bill of quantities (BOQ) that was submitted.

**** with Former DOTC Usec for Procurement and Administration Catherine Jennifer Gonzales

Gonzales: I just received an email, they submitted a BOQ of 41 pages.

Poe: But you couldn't even remember it at the top of your head.

Gonzales: Ma'am, you have to understand that we conduct a lot of biddings and we don't remember the--

Poe: Yes, but this is a standard requirement for every bid

Gonzales: For this project, there was a BOQ and they complied with...

Poe: There was a BOQ, right? But when I asked you--

Gonzales: --we don't remember

Poe: For you to have approved it, you should have familiarized yourself with the 41-page main document that is a requirement, and you couldn't even answer for that. It's not everyday that you have a contract this huge, at the very least, you should have come here prepared for those questions.

Gonzales: Whether big or small, the diligence is the same. For the BUSAN, there are several boxes and we cannot remember just that and we have been out of DOTC for almost a year.

Poe: You know your attitude is quite unsettling. First of all, you should be apologetic for all the things that are happening. You are the Bids and Awards Committee that gave the final go-signal for these providers and you're coming here to tell us 'we've been out for a year and can't remember all the details.' That is not an excuse. You should have come here prepared, that was your job. And even if you're not in government now, that is still your responsibility.

Gonzales: Yes, ma'am. We acknowledge that, that's why we're here. Our apologies that we cannot remember each and every single document that was submitted, but rest assured that for this contract, the BOQ was submitted.

Poe: That is noted. This is also a reminder to all of you...part of it is really goodwill, you were part of government, so you showed up and we appreciate that. But you come here with us assuming that you would have done your work and homework and reviewed at least, and come here with the documents needed, if you have to park with all of the boxes there that is your right to do, we would entertain it, we would open the place to be able to support all your statements.


On this note, as for the multi-billion BURI contract, again, you cannot recall all the details, we have established that...the point is that something this big--magrepaso, kaya nga tayo pumapasok sa ganito, minsan hindi natin ginagawa yung due diligence natin.

Apparently the DOTr and BURI disagree as to the interpretation of the maintenance contract. DOTr maintains that the contract should not have been awarded to begin with as there was no bill of quantities submitted that should have justified the cost of the contract but there was a bill of quantities.

Again, I reiterate that we should not tire in hoping and pushing for a safe, reliable, and efficient train system. Wag nating sayangin ang milyun-milyon na naibayad na natin at patuloy nating ibinabayad buwan-buwan. Naghihirap ang mga pasahero natin na magtrabaho at magbayad ng tamang buwis pero hindi natin sila mabigyan ng maayos na transportasyon na maghahatid sa kanila sa kanilang mga trabaho, sa kanilang bahay.

In fact, while this hearing was ongoing, the MRT had another issue and passengers were asked to unload at Quezon Avenue Station. What will it take for us to fix this? Do we need a mass casualty for us to start working double time? I appreciate what Usec Chavez is assuring us here, but we need to really speed up in getting the safety certification for our trains. We definitely hope not. We are not here to prosecute, we are here to fix this. To the DOTr, handa na kaming makita ang isang maayos at ligtas na MRT. Give us the MRT that we deserve.

I'm hoping that I can already adjourn this hearing, but I can't, we will have to continue this in August when we have already Mr. dela Cruz and the others. We are determined, at this point, to submit a partial committee report.

We would like to extend our gratitude to everyone who attended today.

This hearing is hereby suspended.

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