MRT-3 chief gave P517-M contract to uncle-in-law

The general manager of the government’s Metro Rail Transit-3 gave his uncle-in-law a P517.5-million service deal in 2012-2013. This is revealed in official records, social networks, photographs, and sources’ accounts.

Al S. Vitangcol III, MRT-3 GM, granted the upkeep of trains and tracks to his wife’s uncle, Arturo V. Soriano. Soriano is one of six incorporators-directors of PH Trams, which MRT-3 contracted in Oct. 2012 (see Gotcha, 25 Apr. 2014).

Soriano, of 91 San Miguel, Calasiao, Pangasinan, is the province’s chief accountant. He is the brother of Vitangcol’s wife’s mother.

Amounting to $1.15 million (P51.75 million) a month, the contract initially was for Oct. 2012 to Apr. 2013. It was twice extended, first to June 2013, then to Aug. 2013. For all ten months, MRT-3 paid PH Trams $11.5 million (P517.5 million).

There was no public bidding for the maintenance deal. Vitangcol drafted the terms of reference for the transport department’s negotiations on Oct. 12, 2012, with PH Trams.

Vitangcol signed the resulting contract on Oct. 19, 2012, along with Transport Sec. Joseph Emilio Abaya and U-Sec. Jose Perpetuo Lotilla.

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Signing for PH Trams was Soriano’s fellow-incorporator-director Wilson T. de Vera, a long-time U.S. immigrant from Calasiao, where he ran and lost for mayor in 2013. Another signer was Roehl B. Bacar, president of CB&T, with which PH Trams was in joint venture.

Vitangcol and de Vera’s wives were childhood neighbors in Calasiao, sources aver.

At the time the deal was awarded, PH Trams was only two months old, with P625,000 paid-up capital. It had no track record in railways to bag a contract 828 times its funding. It had applied for SEC registration (Company Reg. No. OS201230134) only on Aug. 6, 2012 (see Gotcha, 23 Apr. 2014). The government usually requires service contractors to have experience of at least five years and handling at least half the contracted amount.

Engineer-lawyer Vitangcol has been under fire lately for poor MRT-3 service. Trains, tracks, and signals frequently break down. Passengers suffer long lines under the sun or rain to get onto platforms.

The STAR persisted the past three days to get Vitangcol’s side. Though initially answering questions, he did not reply to texts and calls about the relationships behind the PH Trams deal.

Soriano and de Vera could not be reached.

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The Anti-Graft and Corrupt Practices Act (R.A. 3019) prohibits public officials from contracting unqualified parties. It further forbids them from directly and indirectly having financial or pecuniary interests in contractors. Contractors are barred if with close personal ties to the official, or related up to the third degree of consanguinity or affinity.

Law school dean Amado Valdez says the provisions intertwine to entrap grafters and cohort kith and kin. Former Ombudsman Simeon Marcelo adds that injury, along with gross and manifest disadvantage to government implicate deeper the grafter.

An uncle or aunt, nephew or niece, including in-law, is in the third degree of relation. With spouses deemed as one, a child or parent is in the first degree; a sibling, grandparent or grandchild in the second. That civil law proceeds from the idea that “love descends, ascends, and spreads,” explains a retired justice and head of the Presidential Anti-Graft Commission.

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Czech Amb. Josef Rychtar has accused Vitangcol and de Vera of attempting to extort $30 million from Czech train maker Inekon. Having supplied the original trains, the firm was angling to refit and retain the MRT-3 system. Corroborated by Inekon chairman Josef Husek, the squeeze play allegedly happened in Makati on July 9, 2012, and Quezon City the next day.

After dinner with Vitangcol, de Vera, and certain Marlo dela Cruz, and Manolo Maralit, the party retired to Rychtar’s residence, without Vitangcol. There, de Vera allegedly demanded the $30 million, which Husek rejected. De Vera stood up twice supposedly to confer by mobile with Vitangcol, then lowered the demand to $2.5 million – rebuffed too.

The next day at his office in de Vera’s presence, Vitangcol allegedly re-stipulated the $2.5 million to the Czechs. He also purportedly required Inekon to partner, 60:40, with an uncle’s company. The Czechs refused.

The money supposedly was so Inekon could proceed to negotiate to supply new trains and refurbish existing ones. The forced partnership was for it to maintain the trains and tracks.

De la Cruz and Maralit a month later would become incorporators-directors of PH Trams. The Czechs said Maralit at first was Inekon’s adviser.

Rychtar broke the story in Apr. 2013. Vitangcol and de Vera at once disavowed any wrongdoing.

Vitangcol said the Czechs are sore with him for opposing their negotiated option over his preferred public bidding. (Dalian Corp. of China eventually bagged the re-fleeting contract,) He insisted he never met with the Czechs for dinner, only at his office. Denying acquaintance, he said it was the Czechs who brought de Vera to him.

De Vera confirmed the dinner and office meetings with Vitangcol and the Czech. He said he attended only to explore business in behalf of PH Trams (which had not yet been formed then). The amounts he stated to the Czechs supposedly were for different projects.

Secretary Abaya hastily cleared Vitangcol in a closed-door inquiry. A year after starting an investigation, the NBI has yet to report. The House committee on good government is to inquire tomorrow into the attempted extortion. Authorities are ignoring its aftermath. –Jarius Bondoc (The Philippine Star)