DOTr serves BURI notice to end three-year contract to maintain MRT 3

October 20, 2017

The Department of Transportation (DOTr) served Busan Universal Rail Inc. the maintenance provider of MRT 3, a notice to terminate its three-year contract, a statement by the DOTr said Friday. The notice was served by DoTr on BURI on October 17, the statement said. This came as commuters riding MRT-3 along EDSA experience daily glitches in its operation. The department said among the reasons for serving BURI with the termination were "poor performance, failure to put in service and subsequently ensure the availability of contractually obligated number of trains." . DOTr added BURI failed " to put in operation reliable and efficient trains; failure to implement a feasible procurement plan for spare parts, as it in fact 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 said. The department said BURI was given seven calendar days after receiving the notice to  "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," it added. This came a day after BURI sought arbitration proceeding to resolve dispute over its contract with the DOTr. In an order dated October 13, Rosa Samson, presiding judge of Regional Trial Court of Quezon City Branch 105, directed DOTr and BURI to proceed with the arbitration proceedings as stated in the MRT3 contract. Samson ordered the DOTr and BURI to proceed with the arbitration proceedings before the Philippine Dispute Resolution Center, Inc. (PDRCI), an agency in charge of assisting and resolving contractual and legal disputes between government and private entities. BURI said the contract for MRT-3 maintenance cannot be unilaterally terminated because of temporary stoppages, more so on the subjective opinion that such were the consequence of the company’s failure to “satisfactorily perform work obligations”. The DOTr  on 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 of the rolling stock and signaling system, the most critical maintenance component of MRT 3. BURI said the glitches are more reasonably due to design flaws – and not mainly maintenance issues. Through the years, the deterioration of the rails and passenger loading above the intended usage only worsened the system’s condition and resulted in more glitches, it said. BURI said  as of as of August 15  its operational fleet availability for MRT3 is 91.67 percent or 66 out of 72 cars. It said when BURI took over the maintenance of MRT 3, the fleet availability was 55 percent. DMS