MRT-3 Coaches Bidding Saved Government P 3.5-B – Abaya

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For calling for an open and transparent bidding in the supply of train coaches to the Metro Rail Transit II (MRT-3), the Department of Transportation and Communications (DOTC) was able to save no less than P3.348 Billion for the government.

DOTC Secretary Jun Abaya makes this observation following suggestions that his agency should have awarded the Inekon Group contract to supply MRT-3 with 48 coaches through a negotiated bid.

“The decision to bid the project out resulted in almost P 3.5 billion in savings, without sacrificing the quality of the train coaches. Those savings can now be used in other programs which will also improve public services. This is in accordance with our push for reforms and good governance at the DOTC,” said Abaya.

He brushed off claims that Inekon, a Czech corporation, had been blacklisted. He said the firm was in fact invited to participate in the bidding process, but it declined to do so despite the fact that it had purchased bid documents.

Czech Ambassador Josef Rychtar has charged that certain individuals demanded a $30 Million payoff as a precondition for the award. Rychtar said that government then made sure that Inekon would not get the contract after he declined to go along with scheme.

But Abaya dismisses the allegation, pointing out that the accusation was made only after it became clear that DOTC would proceed with the open bidding.

The winning bidder, Dalian Locomotive and Rolling Stock Company, offered to supply 48 coaches for $1.8 Million each, or a total of $86.4 Million. Inekon’s price was $3.355 Million for each coach, or a total of $174.46 Million for 52 coaches. That is equivalent to $ 160.8 Million for 48 coaches.

The difference in totals is $74.4 Million, or P3.348 Billion, at the conversion rate of P 45.00 to the dollar.

“That is how much the government saved. Or would have lost, had the contract been awarded to Inekon without opening the project to other bidders,” Abaya said.

The open bidding was part of a raft of reforms introduced in by DILG Secretary Mar Roxas during his brief stint as DOTC chief.

“It was adopted to prevent price manipulation, which is often the case in a negotiated bidding process,” Abaya also explained.

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