Busan Rail files graft case vs DoTR official

BUSAN UNIVERSAL Rail, Inc., (BURI), the maintenance provider of the Metro Rail Transit (MRT)-3, on Wednesday filed a complaint against Transportation Undersecretary for Railways Cesar Chavez and two other respondents for nonpayment of maintenance fees amounting to P176 million.

BURI, represented by its lawyer Charles Perfecto A. Mercado, filed before the Office of the Ombudsman a complaint against Mr. Chavez, as well as Hernando T. Cabrera, senior technical assistant at the Office of the Undersecretary for Railways, and Jorgette A. Bellen, program head at UICI-Seoul Metro Dong Il-JF Cancio Joint Venture, and a consultant of the Department of Transportation (DoTR).

In its complaint, BURI said Messrs. Chavez and Cabrera, and Ms. Bellen committed criminal violations of certain sections of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, and committed administrative offenses under Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees.

The Filipino-South Korean joint venture alleged the DoTr failed to pay the necessary dues or paid the dues late, under the contract signed in 2015 between BURI and the then-Department of Transportation and Communications.

BURI noted for a certain billing, Mr. Chavez withheld P4 million, “despite the fact that the nature of BURI’s contract for maintenance of the MRT-3 system was lump sum, and hence, withholding/ deductions are not allowed.”

BURI also requested the Office of the Ombudsman to preventively suspend the respondents, pending the conduct of the present preliminary investigation, for a period not exceeding six months.

In a message to reporters, Mr. Chavez said his decision to withhold payment is to protect public funds, given shortcomings by BURI.

“My decision to withhold payment is precisely to protect public funds, hence, antithesis to graft. How can I be charged of graft when I am only protecting public funds?” Mr. Chavez said.

“One of the payments they want is for the Logic Vehicle Unit costing P4 million. They bought it from Diamond Pearl owned by the family of Marlo de La Cruz. LVU is part of Automatic Train Protection (ATP), or onboard signaling. The original equipment manufacturer of the signaling system in the MRT is Bombardier. There was no Certificate of Origin at Factory Inspection Report in the billing of LVU,” Mr. Chavez added.

The Transportation undersecretary also said the fees will be paid once BURI has submitted the documents as required by the Commission on Audit.

“If they [documents] are not complete, then we will not pay,” Mr. Chavez said.

Mr. Chavez has previously submitted to DoTr Secretary Arthur P. Tugade a recommendation by his office to terminate the contract with BURI citing failure to maintain the system characterized by numerous glitches in signaling and braking.

The company has repeatedly denied its failure to maintain the MRT-3 system, blaming design flaws and the deteriorating rails that should be replaced by the government. BURI is a joint venture of Busan Transport Corp., which is owned by the Korean city government of Busan; and local companies Edison Development & Construction, Tramat Mercantile, Inc., TMI Corp. and Castan Corp. —