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DOTr ending MRT3 contract

The Department of Transportation issued a notice to terminate the three-year contract of Busan Universal Rail Inc. to maintain the Metro Rail Transit (MRT) Line 3 due to poor performance.

The DOTr said in a statement it gave BURI seven days to respond and submit a verified position paper stating why its contract should not be terminated. 

“After which, the DOTr shall have 10 days, upon receipt of BURI’s response, to decide whether or not it will issue an order to terminate the entire contract,” the agency said.

The DOTr sent the notice to terminate to BURI on October 17.

Besides poor performance, the DOTr cited BURI’s failure to put service and subsequently ensure the availability of contractually obligated number of trains, and put reliable and efficient trains.

The company also failed to implement a feasible procurement plan for spare parts. The department said BURI failed to procure and store the required volume of spare parts, which affected its ability to effect immediate repairs on defective trains and other facilities of the MRT-3 system.

BURI also failed to comply with the contractual requirements of a complete and up-to-date computerized maintenance management system.

The DOTr in January 2016 signed a P3.8-billion three-year contract with the joint venture of Busan Transportation Corp., Edison Development & Construction, Tramat Mercantile Inc., TMICorp. and Castan Corp. to do maintenance works on the rolling stock and signaling system, the most critical maintenance component of MRT 3.

In a separate statement, BURI said it was confident it would be vindicated from the process of contract termination formally initiated by the DOTr.

BURI expressed confidence that through the process of arbitration that would start  between the company and the DOTr, and other judicial remedies, the grounds raised by DOTr in its notice to terminate the contract would be proven to be without legal basis. 

Regional Trial Court of Quezon City Branch 105 Rosa Samson on October 13 directed the DOTr and BURI to proceed with the arbitration proceedings as stated in the MRT3 contract. 

“The allegation of poor performance against the service company will be met by evidence that BURI has delivered even more than what is required under its contract, together with its early accomplishment of fixing 26 cars to raise the number of running trains from 13 in January 2016, when it started servicing the system, to about 22 running trains at present,” BURI said.

The company added it met train availability requirements that served as the contract’s key performance indicators.

Documentary and technical evidence, as well as historical data, would also show that the charge of BURI liability for incidents of train removal, service interruptions, unloading and derailment in the MRT3 was misplaced. 

“The system design concerns are further confirmed by the fact that the MRT3 suffered 1,492 glitches even during its first year of service in year 2000. At that time, the coaches and rails were brand new, and the passenger usage was well below present figures, and yet the system already suffered an average of 4 glitches per day,” BURI added.

Topics: Department of Transportation , Busan Universal Rail Inc. , Metro Rail Transit (MRT) Line 3
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