Friday, 24 December 2010

DOTC greenlights 111 deals, holds 19 others

111 Arroyo era projects clean
19 Takenaka-related projects on hold

Business Mirror

THE Department of Transportation and Communications (DOTC) on Tuesday declared 111 contracts entered into by the agency, its sectoral offices and attached agencies with the private sector as “clean” and placed 19 on hold.

Secretary Jose de Jesus also announced the department will implement 21 Public-Private Partnership (PPP) projects starting early next year, ordered the revision of its terms of reference (TOR) for the manufacture of car driver licenses, and the adoption of the bid-plus financing mode in buying transport equipment and facilities to veer away from the supplier country and technology-driven supply and financing.

He said his team is trying to put in and, if possible, irreversibly cement in place a culture of transparency and clean governance in the department.

At a press briefing on Tuesday morning, de Jesus said the 19 contracts involve the rehabilitation and upgrade of the defective Naia 3 involving agreements with small contractors who were in turn tapped by Japanese company Takenaka Corp., the lead contractor hired by Piatco to build the Terminal 3 of the Ninoy Aquino International Airport (Naia).

“These are worth P2.3 billion in all. . . .These were all put on hold. We are in discussions with Takenaka,” he said.

But he said the department is not abandoning repair of the terminal but will fast-track the full operation of Naia 3 at a lower total cost in civil works and equipment. Savings of close to $20 million is expected from the cancellation of Naia 3’s midnight contracts.

“Toward the end of next year, we hope to see the airport fully operational this time of next year. We are in discussions with Takenaka for the completion, testing and commissioning of the airport,” said de Jesus.

A total of 130 contracts were reviewed by the DOTC legal office headed by Undersecretary Aristotle Batuhan, since de Jesus assumed the post in July.  These projects were approved in the few remaining months of the Arroyo administration.

De Jesus said the review was meant to ensure that these contracts are above board. He said this was also necessary to remove the potential obstacles that might get in the way of the full implementation of these projects.

License deal TRO revised

For the procurement by the LTO of driver licenses, de Jesus said the revision of  the TOR is designed to uphold general performance specifications instead of limiting it to card types. This initiative is expected to widen the area for competing bidders, lower the license production cost, and ensure transparency and level playing field in the bidding process.

“We expect to bid [the review] out by middle of January next year. We will make sure that the auction will be done in full transparency,” added de Jesus.

The DOTC also ordered the review of the interconnectivity agreement entered into by Stradcom Corp. with other third parties to ensure consistency with the build-operate-own agreement between Stradcom  Corp. and the LTO, and to make sure that fees charged are warranted and reasonable.

“The LTO is undertaking its own investigation. We are still not sure if there were violations or not on their part. Part of that determination will come from the discussions with them. We will sit down with them starting first week of January next year,” he said.

He said the bid plus financing mode of procurement for transport equipment and facilities assures transparency. One of those to be placed under the new system is the acquisition of maritime disaster and response equipment for the Philippine Coast Guard (PCG).

First on the list is the LRT South Extension Project involving the extension of the 15-kilometer Line 1 southward to Bacoor, Cavite, by an additional 11.7 km.  It will include eight passenger stations with a provision for two additional in the future.

The feasibility study is being updated and the right-of-way acquisition is now 80-percent completed. Bidding documents for operation and maintenance of the line are being prepared and will be tendered out by the second quarter of 2011 and the construction for the extension will be bid out by 3rd quarter of 2011.

On the other system, or the MRT Line 2 Extension Project—a 4-km line eastward to the Masinag Junction in Antipolo, Rizal, from Santolan, Pasig City—a feasibility study is being updated and the tender documents for concession are being prepared. The extension will have two passenger stations at Sta. Lucia Mall and Masinag. 

“We will bid this out in the second or third quarter of next year. We will bid out the concession so it can be operated and maintained by the private sector.”  

De Jesus also revealed the agency has unraveled most of the tangled transactions in the MRT 3 Project—the line from North Edsa to Monumento—including the buyout scheme that has been proposed. Legal and financial experts have been tasked to finalize a strategy for a government takeover of the project.

Also, the department is pursuing the LRT Line 1 and MRT 3 Integration to ensure seamless connection and expand the capacity of both rail systems. It will allow riders to transfer using a single-ticketing system with an affordable fare rate. The integration of the systems will also result in new efficiency levels. 

De Jesus also talked about the Northrail Project. He said Section 1 from Caloocan City to Malolos, Bulacan, has been under construction since 2008 but is only 20-percent complete.

Since July, this has been undergoing financial, technical and scope of project review. “We expect to complete the technical and financial review by the end of January 2011. If necessary, we will negotiate the project with the Chinese contractors.”  

The Northrail Project Section 2 running from Malolos to Clark, Pampanga, is being reviewed to clarify and improve contract conditions to expedite implementation.

The Philippine National Railways North Rail-South Rail Linkage Phase 1 Caloocan City-Tutuban-Alabang has been operational since 2007. Ridership in this line has increased by 220 percent to 1.053 million from 325,591 passengers in the first nine months of this year.

De Jesus attributed the increase in passenger volume to the improved services and the rehabilitation and modernization of the commuter rail line.

The PNR main line south runs from Alabang to Legaspi, Albay. The DOTC plans to rehabilitate the entire stretch and privatize the line’s operation. Alternatively, the DOTC may bid the South line as a rehabilitate-operate-and-maintain project.

Also, master plans for the National Railway System and the Mindanao Railway System are being prepared. The DOTC will seek grant financing for its funding.

In the civil aviation sector, the Puerto Princesa Airport Project will redevelop the airport by the second quarter of 2011 to meet world standards, while the Laguindingan Airport Development Project is already 70-percent complete.

The O&M component of Laguindingan will be bid out by the third quarter of next year. De Jesus said the department is now in discussion with the United States Trade and Development Agency for a grant to prepare the transaction documents for an O&M agreement.

The Panglao Airport Project development is undergoing a review, meanwhile, to consider views from all the stakeholders.

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