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House opens inquiry into P4M “fake” MRT-3 safety equipment

The House Committee on Good Government and Public Accountability chaired by Rep. Johnny Pimentel (2nd District, Surigao del Sur) on Wednesday opened its inquiry, in aid of legislation, into the purchase and installation of P4 million worth of alleged fake train safety equipment for the Metro Rail Transit Line 3 (MRT-3) system.

Rep. Jericho Jonas Nograles (Party-list, PBA) said he filed House Resolution No. 1212 for the House to inquire into the alleged anomalies hounding the MRT-3 system.

Nograles said the Busan Universal Rail Incorporated, the service maintenance provider of MRT-3, purchased alleged fake parts for the MRT-3 automated train protection system worth P4 million from Diamond Pearl Manufacturing.

Diamond Pearl is not an authorized supplier and distributor of proprietary parts from Bombardier Transportation, according to the lawmaker. “The terms and reference of the MRT-3 maintenance contract states that the purchase of all parts shall be made under accredited and authorized suppliers and distributors only,” said Nograles.

The lawmaker said the government subsidized MRT-3 through a whopping P3.8 billion contract, but it is giving the riding public a sub-standard service.

“MRT-3 is grossly underperforming and the government is paying for a contract that is not performing. And that alone is a grave, grave corruption,” said Nograles.

Nograles said they discovered the irregular purchase when they encountered a sales invoice submitted by the Busan Universal Rail Incorporated to the MRT-3 and the Department of Transportation (DOTr) for the reimbursement of P4 million which was used for the purchase of the train protection system parts.

Nograles said they found out the invoice was from an unauthorized representative and agent of the supplier of the proprietary parts for the automated train protection system.

Nograles said the purchase of unauthorized parts is clearly a violation of Republic Act Nos. 3019 and 9184, and various executive orders and resolutions of different government agencies.

“They purchased these parts from a company called Diamond Pearl Development and Marketing Corporation which is conveniently located near Evangelista St., in Makati City, very much known as The Banawe of Makati City,” said Nograles.

Nograles said he cannot imagine an MRT system that is transporting 4,000 to 6,000 Filipinos daily is running on “fake” safety equipment parts purchased just in Evangelista, Makati City.

He said the key performance index of Busan Universal Rail Incorporated, as stipulated in the contract with the government, is to produce 60 trains at peak hours.

“This is far from the 18.99 trains that they are currently providing on a daily basis. Yet, despite that, their contract continues,” said Nograles.

In fact, Nograles said even with Busan’s claim of 18.99 train availability on a daily basis, the entity had train removals of 2,261 in 2016 and 1,204 in 2017.

“This means that the actual train availability is not 18.99 as what was reported, but practically around 13 per day. That is really far off from the 60 trains that is required of the system,” he said.

A perusal of the papers of Diamond Pearl will show that the company’s owner is the Dela Cruz family, and one of its members is the infamous Marlo dela Cruz. “We can ask the previous MRT management which is facing plunder charges, especially with the Czech Republic,” said Nograles.

He further said that the P3.8 billion contract between the Philippine government and the Busan Universal Rail Incorporated does not exist.

“I have with me the contract for the maintenance of the MRT-3 system and this P3.8 billion contract, if you will call it a contract. And nowhere in this contract can we find Busan Universal Rail Incorporated. So, we have been robbed,” said Nograles.

Nograles filed the resolution and asked the help of the committee to investigate the matter, saying “ the tentacles of corruption is very long and very complex.”

“One of the biggest sins of this contract is that the previous administration allowed it without even signing it,” he said.

Per Executive Order No. 423, as amended by Executive Order No. 645, series of 2003 and 2007 respectively, Nograles said only the Transportation Secretary can sign the contract. “But by virtue of a Special Order issued by then DOTC Secretary Joseph Emilio “Jun” Abaya, an unauthorized Undersecretary can sign the contract, which alone is illegal,” said Nograles.

Nograles expressed hope that the output of their investigation will enhance the laws, the rules and regulations with the government procurement and policy board (GPPB) and strengthen RA 3019 or the Anti-Graft And Corrupt Practices Act.

“Therefore this contract, I believe is void ab initio and I hope that we can compel the perpetrators to come before us and verify information. And if need be, we can recommend prosecution that may lead to plunder,” he said. (HOR-PR)

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