DOTr moves to terminate MRT maintenance deal with BURI

October 20, 2017 - 7:32 PM
A train on Metro Rail Transit Line 3 (Philstar file photo)

MANILA, Philippines — The Department of Transportation (DOTr) has issued a notice of termination to Metro Rail Transit Line 3 (MRT-3) maintenance service provider Busan Universal Rail Inc. (BURI) amid frequent breakdowns in the railway system.

The notice from DOTr Secretary Arthur Tugade issued on October 17 is the initial step towards ending the MRT maintenance deal with BURI, Undersecretary for Legal Affairs and Procurement Reinier Paul Yebra said.

“The DOTr has issued a notice of termination of its MRT-3 contract to BURI due to various reasons: poor performance; failure to put in service and ensure the availability of contractually obligated number of trains and failure to put in operation reliable and efficient trains,” Yebra said in a statement Friday.

Among other reasons were failure to implement a feasible procurement plan for spare parts, which impeded its ability to conduct immediate repairs on defective trains and other facilities of the MRT-3 system; and failure to comply with the requirements of a complete and up to date Computerized Maintenance Management System.

BURI was given seven days upon receipt of the notice to submit its position on why the maintenance contract should not be terminated. The DOTr will then issue an order whether or not to terminate the contract within 10 days upon receipt of BURI’s response.

The department will explore various options in choosing a new maintenance services provider for MRT-3 once it decides to terminate the current maintenance contract.

BURI earlier said it was asking the DOTr to submit the matter through arbitration proceedings as it reiterated its position that it had not been remiss in its maintenance operations.

The maintenance service provider said the immediate termination of its contract and withholding of payments due to them not only lacked due process but had also placed the MRT operations in peril.

The Quezon City Regional Trial Court-Branch 105 has issued an order last October 13 for DOTr and BURI to proceed with the arbitration proceedings as stated in the MRT-3 contract in accordance with Republic Act 9285 or the Act to Institutionalize the Use of An Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution and for Other Purposes.

The court’s presiding judge Rosa Samson ordered DOTr and BURI to proceed with the proceedings before the Philippine Dispute Resolution Center Inc., an agency in charge of assisting and resolving contractual and legal disputes between government and private entities.

“We are calling on the DOTr to abide by the court. We believe that at the end of the day, our actual performance and compliance with contractual obligations could help the DOTr see the light and avoid a protracted legal conflict,” BURI legal counsel and spokesperson Charles Mercado said in a statement.

BURI said the glitches were mainly due to the MRT’s design flaws and were not linked to maintenance issues.

According to the firm, its operational fleet availability for MRT-3 is 91.67 percent (66 out of 72 cars), which is higher than LRT 1’s 74.82 percent (102 of 139 cars) and LRT 2’s 66.67 percent (48 of 72 cars).

“This figure of 91.67 percent represents a dramatic rise from the fleet availability of 55 percent when BURI took over the maintenance of the MRT-3 on January 2016, despite the significant increase of ridership of about 30% from 2000 when maintenance was still being undertaken by Sumitomo,” Mercado said.