Buying MRT-3 for P54 B, only to shut it down

News is that Malacañang will rebid the CALAX (Cavite-Laguna Expressway) or do the work itself. This is to avoid howls of favoring any party. Either way, President Noynoy Aquino likely will get the flak.

Already he is being twitted for stalling the P35.4-billion CALAX. Lawsuits had tied down two other mega-PPPs. Bid out in Nov. 2013, the Cebu international airport expansion was awarded only in Apr. 2014 due to claims of the winner’s conflict of interest. The LRT-1 extension, bid out last May, was granted only in Sept. because government messed up the common station with MRT-3. Now the CALAX too is mired, this time by politics. How long the linkup of the Cavite-Manila Extension to the South Luzon Expressway will have to wait, only P-Noy can say.

He personally took over the CALAX after a fuss in last June’s bidding. The Dept. of Public Works and Highways had disqualified giant San Miguel Corp. for what it called a fatal bid defect but which SMC saw as mere typo. The consortium of Ayala and Aboitiz Groups went on to offer the highest premium to the government of P11.6 billion, on top of the P35.4-billion construction. Peeved, SMC opened its sealed bid in front of reporters – revealing a staggering offer of P20 billion. Instantly Ayala-Aboitiz and one loser cried foul that SMC broke protocol in airing a dead bid. SMC and onlookers shouted back that the P8.4-billion bid difference is too big an amount for government to give up on mere technicality. To quiet them down, Malacañang ordered the DPWH to stop everything.

Critics say Malacañang’s interference only worsened things. Old stories resurfaced that both rivals had contributed to P-Noy’s 2010 run. Reportedly a confrontation ensued at the Palace. DPWH Sec. Rogelio Singson and his bidding managers stood their ground that SMC was TKO-ed. In press statements, though, he acknowledged that the matter already was in P-Noy’s hands.

Now floats news of P-Noy considering the options of rebidding or do-it-yourself CALAX.

Rebidding is not what SMC or Ayala-Aboitiz wants. Both amply have aired the legalities on which each base demands to be awarded the CALAX. For Ayala-Aboitiz, it’s stick to the rules. For SMC, it’s unfair technicality.

In contrast, rebidding legally is iffy. One way it can be justified is to redo the terms of reference; that is, from the highest premium to the government to the lowest toll to CALAX users. Then again, whether under old or new TORs, bidders may not come. Ayala-Aboitiz and the losers have hinted at boycotting a rebid. SMC broadly has said it will join all PPP biddings, if only to ensure fair deals for the government. Actually it has a newly refurbished cement plant to back up its inroads in infra-works. But if no parties join except SMC, future PPPs could be tainted.

Doing CALAX itself, meanwhile, would be so costly for the cash-starved government. Aside from sacrificing P35.4 billion from other regions for Southern Tagalog, the project would suffer from inherent government inefficiencies. Like a rebid, it would send a bad signal to potential PPP investors that Malacañang can’t make up its mind.

In short, P-Noy would be shooting himself in the foot by opting for rebid or do-it-yourself. In which case, his third option could be the best: bite the bullet, choose between SMC and Ayala-Aboitiz, and defend it.

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Transport Sec. Joseph Emilio Abaya is trying his best to divert the MRT-3 issue. The railway’s frequent accidents and breakdowns are due to corrupt non-upkeep. But he claims that the DOTC needs to buy out the private builder-owner MRT Corp. for failure to upgrade the line.

So far he has inveigled the House of Reps, where he used to sit, to allocate P54 billion for the buyout in 2015. It is on top of the P3.8 billion he earlier got for 48 new coaches from Dalian Corp. of China. On top too of the P2.4 billion that Malacañang released to him for the total overhaul of the trains, tracks, signaling system, power supply, and stations. And on top, most of all, of the 70-percent increase in MRT-3 fare, from P10 to P17, after Christmas.

There are oddities behind each of Abaya’s money items. He is to purchase the MRT-3 when it is not even for sale by MRT Corp. He has contracted 48 new coaches from a Chinese firm with no experience in such manufacture; thus the risk of incompatibility with the existing 72 Czech-made coaches and the Canadian signaling system. He let Liberal Party mates mishandle the P63-million monthly maintenance from Oct. 2012 to the present, precisely because the rail was scheduled for overhaul on its 15th year in 2015. And he will raise fares ahead of any improvement in service and facilities, in effect rubbing salt on the wounds of passengers from accidents.

The oddest part is this. He will buy out the MRT-3, add overrated new trains, overhaul the system, and raise fares in the midst of recommendations to shut it down.

Japan’s Sumitomo Corp., which had serviced the railway in 2000-2012, had long proposed the shutdown. This was because as far back as 2010 vital spare parts for the signaling system were no longer available. Other train experts recommended shutdown until the safety of 560,000 daily passengers is assured. MTR-Hong Kong, which recently inspected the MRT-3, reportedly also called for shutdown, but Abaya is suppressing it. –Jarius Bondoc (The Philippine Star)