As I See It

MRT saved $83M in 48-coach contract

Did an emissary of MRT (Metro Rail Transit) General Manager Al Vitangcol try to extort $30 million from Inekon Group of Czechoslovakia in exchange for a contract to supply MRT with 48 coaches for $160.8 million? Yes, said Czech Ambassador Josef Rychtar. No, said MRT’s Vitangcol. Whom should we believe? A resolution has been filed in the House of Representatives to investigate the allegations and find out who is telling the truth.

Actually, if you look at the background of the whole MRT story you will have an idea who is.


The Philippine government wanted a public bidding. Inekon wanted a negotiated contract. The Department of Transportation and Communications decided on an open public bidding for the contract.

It was after the DOTC made that decision when the ambassador began making the rounds of media organizations with the story of an extortion attempt by DOTC officials.


Media went to town.

Much was made of Vitangcol’s “suspension” for 60 days, the implication being that he would not have been suspended if he were not guilty. But the truth is that he was not suspended. He went on voluntary leave of absence to give way to an investigation which, by the way, yielded nothing incriminating. Media also speculated that Vitangcol’s superior, Transportation Secretary Joseph Emilio Abaya, was involved in the affair.

Inekon wanted to get the government contract through a negotiated bid, and at a price it would dictate: $3.35 million for each coach or a total of $160.8 million for all 48 coaches. Dalian Locomotives of China offered $1.62 million for each coach, or $77.76 million for all 48 coaches.

The difference is $83.04 million, or around P3.8 billion at the conversion rate of P45 to the dollar. That is the amount the government stands to save. Or lose, if the DOTC had given the contract to Inekon.

That is not a shakedown but a ripoff.

Inekon must have thought that Abaya and Vitangcol did not know how much the coaches really cost. But the two knew and proceeded with the open bidding.

The ambassador, probably realizing he was losing a potential gold mine, cried foul, and the rain of criticism began again. After a while, it eased a bit to give way to a last-ditch attempt to salvage the deal. As late as December last year, Ambassador Rychtar sent a letter to Secretary Abaya reiterating Inekon’s offer to supply MRT coaches under “the maximum repayment period of 10 years.”


The letter looks innocuous enough, but it is a dead giveaway if one knew what had gone before. The letter writer must have thought Abaya and Vitangcol have been browbeaten enough to see things his way.

When this gambit failed, the shakedown claim was resurrected.

The result of the open bidding is a vindication of the government position, but that does not mean anything to the detractors. In spite of the barrels of ink spilled on the subject, not a whisper has been said about the difference in prices offered by Inekon and Dalian.

* * *

What’s happening to the Department of Public Works and Highways and the Department of Environment and Natural Resources? The DPWH keeps cutting down mature trees on the side of highways and roads and the DENR keeps giving it the permit to do so. They have forgotten what they are supposed to do. The DPWH is supposed to build infrastructure, not to be another logger. The DENR is supposed to preserve the environment, including trees, not to destroy it.

In Pangasinan and in Los Baños, Laguna, hundreds, perhaps thousands, of mature trees which took many decades to grow that big, are being “massacred” with the excuse that the highways and roads are being widened. In Los Baños, ironically the home of the University of the Philippines College of Agriculture, residents recently held a demonstration to stop the cutting of trees near Mount Makiling.

Roads can be widened without cutting trees. The DPWH did it along Katipunan Avenue, behind the Diliman campus of the University of the Philippines in Quezon City. It made the line of trees a traffic island, and widened the road on the other side of the trees. Now that part of Katipunan Avenue has become a beautiful and shady place, unlike the portion in front of Ateneo and Miriam College where the trees were cut. If it can be done there, why not in other places?

I suspect the cut logs are being sold to lumber yards and furniture makers and woodcarvers. There is an acute shortage of wood in these industries for which reason they do not care where their wood comes from. An audit of the cut trees should be made so we would know where they eventually ended up and who made a profit from them. With the closure of the logging concessions in the mountains, the loggers have shifted to the lowlands where there are still plenty of trees, i.e., those on the sides of the highways.

The DPWH said it would plant tree seedlings to replace the trees it had cut. That is not the same. How long would those seedlings take to grow as big as the mature trees that had been cut? Many decades.

Please, Mr. President, spare those trees.

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