Government saves P3B from train supply project

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Sunday, May 4, 2014

THE Aquino government has saved at least P3.348 billion for an open and transparent bidding in the supply of train coaches for the Metro Rail Transit 3 (MRT-3), the Department of Transportation and Communications (DOTC) said Sunday.

DOTC Secretary Joseph Emilio Abaya made the statement following suggestions that his agency should have awarded Czech firm, Inekon Group, the contract to supply MRT-3 with 48 coaches through a negotiated bid.

“The decision to bid the project out resulted in almost P3.5 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,” he said.


He brushed off claims that Inekon 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 claimed 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.

This was contrary to Inekon’s price at $3.355 million for each coach, or a total of $174.46 million for 52 coaches, the DOTC said, adding that it was equivalent to $160.8 million for 48 coaches.

The difference between the offer of Dalian and Inekon is $74.4 million, or P3.348 billion, at the conversion rate of P45 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 at the DOTC under the Aquino administration, he said.

“It was adopted to prevent price manipulation, which is often the case in a negotiated bidding process,” Abaya said. (SDR/Sunnex)

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