Busan Rail sues Chavez over unpaid bills, termination threats

USec Cesar Chavez (DOTr USec. for Rail). INQUIRER PHOTO/LYN RILLON

Busan Universal Rail Inc. (BURI), the maintenance provider of the Metro Rail Transit Line 3, has sued Department of Transportation Undersecretary for Railways Cesar Chavez before the Office of the Ombudsman over P176.14 million in unpaid billings.

BURI also said Chavez “threatened” the termination of the maintenance contract through various letters, even if Department Order No. 2016-013 actually authorized the MRT-3 general manager to issue such notices.

In a 33-page criminal complaint on Wednesday, BURI said the deduction or withholding of amounts from its billings was not authorized under the MRT-3 maintenance contract.

BURI also accused Chavez of imposing additional requirements on the maintenance provider to process the billings, even as the contract only required documents pertaining to train availability.

It cited a Jan. 17, 2017 memorandum to Chavez by MRT-3 officer-in-charge general manager Deo Leo Manalo, which stated that its “submitted documents… was [sic] discussed, reviewed and practically found to be acceptable.”

Yet, BURI said Chavez continued to withhold the amounts and “persisted in his erroneous interpretation of the contract.”

BURI also accused Chavez of lacking legal basis in requiring that all its billings be reviewed by UICI Seoul Metro Consultants, a system consultant for the MRT-3.

It said the consultant’s project head Jorgette Bellen (also known as Jorgette Aquino) was also the local representative of Korean Rail, a competitor of BURI.

For BURI, there was a “clear conflict of interest in evaluating the billings of BURI, not to mention an inclination not to favor BURI in evaluation of its billings.”

The unpaid billings covered the ninth to the 18th months of the contract from Sept. 19, 2016 to July 18, 2017.

Prior to these issues, BURI said the DoTr-MRT3 had promptly paid the first eight billings covering the period of Jan. 19 to Sept. 18, 2016.

Termination threat

Although DoTr-MRT3 was allegedly remiss in its obligations, BURI said Chavez even directed BURI in two Apr. 17, 2017 letters to explain why its contracts for the MRT-3 maintenance and general overhaul of the light rail vehicles should not be terminated.

BURI noted Chavez gave interviews and issued press releases “without even waiting for BURI’s letter-replies.”

It claimed Chavez and senior technical assistant Hernando Cabrera lacked factual and legal bases when they called for the contract’s termination in the Senate public services committee’s May 15 and 23 hearings.

BURI also complained about Chavez’s call for the maintenance and operation of the MRT-3 system to be transferred to the Light Rail Transit Authority. It claimed the fleet operability and train availability of the MRT-3 was “superior” to that of either LRT-1 or LRT-2.

Thus, BURI asked the Ombudsman to hold Chavez, Cabrera and Bellen liable for violation of Sections 3(e) and 3(f) of the Anti-Graft and Corrupt Practices Act.

Section 3(e) prohibits public officials from causing undue injury to any party and giving unwarranted benefits to a private party, while Section 3(f) frowns upon neglect or refusal to act within a reasonable time on a due demand without sufficient justification.

BURI also said Chavez should be held liable for violating Section 4(c) and (e) of the Code of Conduct and Ethical Standards For Public Officials and Employees (justness and sincerity and responsiveness to the public), as well as Section 5(a), (c) and (d) of the same law (acting promptly on letters, processing documents expeditiously, and acting immediately on the public’s personal transactions).

Chavez’s side

In a statement to reporters, Chavez said: “My decision to withheld payment is precisely to protect public funds, hence, antithesis to graft. How can I be charged of graft when I am only protecting public funds?”

Chavez said the payment was withheld due to the lack of a certificate of origin and a factory inspection report for a P4-million logic vehicle unit. “Where did this come from?” he said.

He said the DoTr was just scrutinizing the billings to ensure that original parts were being procured for the MRT-3 system.

“If the documents required by the Commission on Audit are completed, we pay. If not, we don’t,” he said. /je