When will Chinese firm deliver new coaches?

(Concluded from Monday)

The suspicious thing about the administrative inquiry into allegations that Metro Rail Transit General Manager Al Vitangcol III tried to extort $30 million from a Czech company that had offered to supply trains for the MRT was that the Department of Transportation and Communications exonerated him even before the National Bureau of Investigation could submit a report on its own probe.

The clearance not only preempted the NBI findings but also sent the case into a tailspin for further investigation in Congress, with several legislative committees expressing fears of a whitewash by the Aquino administration. Transportation Secretary Joseph Abaya ran into a torrent of criticism after saying in an interview reported by the Manila Standard Today that: “We found no basis to charge Mr. Vitangcol administratively. Unless there is new evidence that will come out, then we will look into the case again.”

The investigation was sparked by an affidavit submitted by Czech Ambassador Josef Rychtar to the NBI where he “confirmed that an extortion attempt took place in July 2012 followed by other suspicious circumstances which led to a questionable bidding in March 2013.” In the same affidavit, according to reports by the Inquirer,  Rychtar named Wilson de Vera, who ran for mayor of Calasiao town under the administration’s Liberal Party last year but lost, as the alleged “envoy” of Vitangcol.

Referring to De Vera, Rychtar said, “I think all of us considered him to be an envoy of Mr. Vitangcol since he behaved like that at an official dinner… He (De Vera) went straight to the point of suggesting the payment from Inekon (the Czech train car builder) to secure the deal for them. I think everybody was surprised with this suggestion of Mr. W. de Vera, which was $30 million.”

In an affidavit submitted to the House committee on good government, the Inekon Group CEO and chair Josep Husek said he and Rychtar first met with the MRT group led by Vitangcol and De Vera on July 9, 2012, over dinner at Carpaccio in Makati City. The following day, Vitangcol, De Vera and the Czechs met at Rychtar’s residence. In that meeting, Husek claimed, De Vera “suggested that we (Inekon) would be selected as supplier of tram vehicles and related services provided that we paid an unknown entity a certain amount of money…and indicated such payment should amount to $30 million.”

Husek said he was “shocked” by De Vera’s demand because “we did not expect this way of doing business.” Rychtar said Inekon rejected the demand because “the requested additional and non-standard payment would cause the price to rise significantly.”

In one of those meetings, according to newspaper reports, De Vera consulted with Vitangcol, who told him that the contract price for one tram vehicle was not to exceed $3 million—a fixed ceiling price set by an MRT consultancy report. De Vera, according to Husek, then told the Czechs that the sum of $2.5 million instead of the $30 million originally mentioned “would be sufficient.” These devious twists and turns in the backroom negotiations were beginning to fray the talks. Husek told the media: “We refused that proposal and intended to leave [the ambassador’s] residence,” but De Vera “encouraged us to think about his suggestion.” With patience over the negotiations wearing thin, the talks came to the breaking point when Husek’s group went to the office of Vitangcol, only to be offered a 60-40 joint venture between Inekon and “people suggested by Mr. Vitangcol” who would assume the maintenance contract of MRT.

“We refused the offers,” Husek said. “This made Vitangcol apparently upset and in a few minutes we left his office without any follow-up on negotiations.” A few hours later, Rychtar received a text message from an MRT official stating that “Vitangcol and De Vera were furious because we refused their suggestions, and the MRT would never do any business with Inekon Group in the future.”

In March 2013, the DOTC bid out a contract to purchase 48 new MRT coaches. The P3.8-billion contract was awarded to China’s CNR Dailan Locomotive & Rolling Stock. Rychtar said Inekon officials went to the bidding but did not participate because the terms were not objective and the price and terms of delivery were unrealistic.

In a two-hour meeting with Transportation Secretary Abaya in April, after the collapse of the Inekon bid, Rychtar poured out his grievances. He told Abaya that he had received two sets of “white papers” that described in “precise terms a fraud organized for the new coaches bidding by persons from the private sector as well as from state institutions,” and “the technical parameters of the scam inside the Terms of Reference of the Bidding.”

All of these facts, Rychtar said, “led me to the decision that there was already sufficient evidence confirming that the bidding process and all other deals with DOTC/MRT are manipulated and faked to the disadvantage of the Czech company.”

These grievances bristled with strong undiplomatic language that earned for Rychtar veiled threats from some Cabinet officials that he could be declared persona non grata for having been too outspoken in criticizing the government’s actions on the procurement of new MRT coaches. More important, in the meantime, how soon can the Chinese contractors deliver the coaches? In more pedestrian terms, how long will MRT commuters have to suffer the congestion until the coaches arrive? The administration and the Chinese coach providers  are silent about this.