DoTr terminates BURI’s MRT-3 maintenance deal

THE Department of Transportation (DoTr) said it terminated the maintenance contract held by Busan Universal Rail, Inc. (BURI) for Metro Rail Transit (MRT)-3.

The DoTr served yesterday its “final decision,” saying that BURI failed to address the issues raised in the notice of termination served on Oct. 17. The issues cited by DoTr included poor performance; failure to put in service and ensure efficiency and availability of trains as stipulated in the contract; failure to implement a feasible procurement plan for spare parts, and failure to comply with the contractual requirements of a complete and up-to-date Computerized Maintenance Management System.

DoTr Secretary Arthur P. Tugade signed an order to establish an MRT-3 Maintenance Transition Team which will temporarily take over maintenance functions for MRT-3, pending a deal with a new maintenance provider.

“It cannot be overemphasized that what is at stake here is the welfare and interest of the riding public… This office can not just sit back and wait while watching BURI trifle and flirt with the lives of the commuting public, with its substandard performance,” Mr. Tugade said in a DoTr statement.

“In order to avoid service disruptions, technical personnel from BURI, whose roles are vital in MRT-3 maintenance works, shall be absorbed by the MRT-3. Further, the Philippine National Railways (PNR), and Light Rail Transit Authority (LRTA) committed to provide sufficient technical support and expertise to ensure the smooth transition of MRT-3 maintenance works,” the DoTr added in its statement.

DoTr (then the Department of Transportation and Communications) and BURI entered into a negotiated contract in January 2016, after a failed bid in the absence of interested parties. Under the contract, BURI was to overhaul 43 light rail vehicles and replace the signaling system.

BURI questioned the validity of the termination by DoTr and is awaiting a Quezon City Regional Trial Court ruling, pinning its hopes on court-ordered arbitration under the terms of its contract.

“DoTr agreed to arbitrate, and now they don’t want to arbitrate,” Maricris B. Pahate, legal counsel of BURI, said in English and Filipino during a briefing yesterday.

“There’s no basis for DoTr to terminate the contract,” Ms. Pahate said. “We said when we entered the contract that those glitches will happen unless you change the rails… and the MRT management recognized that.”

Under the contract, the MRT management should give a report citing reasons for termination, Ms. Pahate said. “MRT-3 management should give the go signal to terminate. There is no report signed by the MRT-3 General Manager… He only authenticated the documents.”

Ms. Pahate added that BURI purchased new signaling systems, but these were damaged within two months because of excessive vibration from the rails.

BURI also disputes the claim of DoTr that BURI did not purchase spare parts for the train. Ms. Pahate said that under the contract, spare parts will be bought “upon discretion” of the maintenance provider.

The DoTr under Mr. Tugade has blamed BURI for glitches in the MRT-3 from January 2016 until the present. The maintenance provider has said that glitches were due to “design flaws” and that breakdowns in the system were occurring even under previous maintenance providers dating back to 2000.

In September, BURI filed a complaint against DoTr Undersecretary for Railways Cesar Chavez and two other respondents for nonpayment of maintenance fees amounting to P176 million.

In late October, the DoTr filed graft charges in the Office of the Ombudsman against then Secretary Joseph Emilio A. Abaya along with 10 former transportation officials and 10 BURI incorporators for alleged irregularities in the maintenance contract. — Patrizia Paola C. Marcelo