The Market Monitor Minding the Nation's Business
A Commission on Audit (CoA) report on the Light Rail Transit Authority (LRTA) last year said that, despite incidents of train faults and failures, no penalties were ever imposed on the maintenance contractor, hence, the train faults and failures continued unabated.
The CoA said the problems encountered by the Light Rail Transit Line 1 (LRT-1) last year were classified as incidents that resulted in the loss of trips and loops with the corresponding loss of revenues. The Light Rail Manila Corp. (LRMC) assumed the train system’s operations and maintenance last September in a 32-year contract.
LRMC is a consortium of Light Rail Manila Holdings, Metro Pacific Light Rail Corp. and MacQuarie Infrastructure Holdings.
“We were furnished by the LRTA Traffic Control Division with the Daily Early Morning Reports, which showed that different incidents in the LRTA daily operations, including the trains faults and failures and the number of lost trips or loops classified as Level III incidents,” the CoA said.
The report said that in October last year, among the recorded defects in the LRT 1 system were faulty and defective doors of trains, abnormal noise, frequent emergency brake application, no traction and detached panel and door connector.
The defects resulted in trains being sidetracked, trips being cancelled, lost train trips in both northbound and southbound directions ranging from two to 34 light rail vehicle (LRV) trips, and delays in the arrivals and departures of trains.
Defects reported for November included detached lower door connector, lack of traction, defective driver’s cab seat, lack of air conditioning, signaling fault, defective speedometer, detached cable, sudden drop of voltmeter reading, defective door, frequent emergency braking and burnt wires.
Based on the same report, problems encountered for LRT 1 in December were faulty doors or doors not opening on command, no traction, smell of burnt disc pad, door fast closing, fault code, frequent emergency brake application and smoke being emitted inside the train’s passengers compartment.
The CoA said that when it asked the LRTA last June 1babout its failure to impose penalties on its contractor, the reply was that: • The faults were brought about by capital spare parts that were in dire need of replacement, and, based on the maintenance contract, the procurement of such parts fell under the responsibility of LRTA. • The assemblies manifesting failures and breakdowns were caused by malfunctioning parts (pneumatic, electronic, electrical, mechanical, etc.) that have already been repeatedly repaired and/or reconditioned by the maintenance provider.
An example was the electronic boards that are also considered capital spares, the procurement of which also falls under the responsibility of LRTA. • A total of 818 capital spare items listed under the Central Warehouse Inventory were now depleted and showing zero stock status balance, 354 of which were rolling stock items, compromising the reliability of the rolling stock fleet.
Deputy Administrator Emerson Benitez added that the conditions for the imposition of penalties under the maintenance contract could not be applied against the contractor, because the cause of the failures involved lack of spare parts that the LRTA must make available to the maintenance contractor under its contract.
But the CoA said that from the nature of the train faults and failure, the spare parts being replaced or fixed were within the scope or ambit of the maintenance activities that are for the account of the maintenance contractor.
“A daily maintenance window time from 10:45 p.m. to 3:00 a.m. along the mainline and operation of critical equipment to ensure safe and reliable railway services are provided for in the Terms of Reference of the Maintenance Contract,» it added.
An audit of the disbursement vouchers covering the payments to the maintenance contractor showed that no penalties were deducted from the service billings for the Level III incidents, the CoA added.
“As stated in Section 9.2 of the Maintenance Contract, Level III incidents which caused delay in Revenue Service (sidetracking of defective train/assumed trip by another train) are subject to penalty,” the CoA added.
The report said the audit team noted that the maintenance contractor incurred no penalty for all the train faults as the LRTA considered the Level III incidents as “not the fault of the contractor but were due to lack of spare parts that should have been provided by LRTA.”
“From the nature of the train faults, the Audit Team believed that they are part of the regular and preventive maintenance of the trains,” the report added. “As a rejoinder, the spare parts/items replaced are consumable items that should have been provided by the maintenance contractor under the maintenance contract.
We also noted that the list of consumable items that are to be provided by the contractor was very limited and of insignificant value,” the CoA said.
Earlier, the CoA also issued a special report on the mass-transit system that concluded the government failed to protect its interest when it entered into maintenance agreements for Light Rail Transit 1 and 2.
The observation was made in a 122-page report that assessed the basis for contract costs as well as compliance by the maintenance contractors with provisions under the deal, and the evaluation of select transactions and operations of the LRTA from January 2007 to July 2011.
“The overall result of audit illustrates that the interest of the government was not protected under the maintenance contracts,” the state auditors said.
This was worsened by the LRTA’s alleged failure to (a) monitor the contractors’ compliance with the provisions of the contracts, (b) to impose sanctions for non-compliance and (c) to manage its financial operations efficiently and effectively and comply with existing laws.
“These deficiencies contributed to the LRTA’s non-attainment of the objectives of outsourcing and non-fulfilment of its obligations with the BTr [Bureau of the Treasury],” the CoA said.
Based on the audit report, the P1.29-billion deal with Comm Builders & Technology Inc., PMP Inc. and Gras Saobracaj Joint Venture (CBT-PMP-GRAS Joint Venture) was effective from January 2009 to December 2011.
Meanwhile, the P1.059-billion deal with Telefonica Inc., Societe des Transports Intercommunaux de Bruxelles (STIB), Pacific Consultants International Inc. and Autre Porte Technique Global Inc. (TSPA Joint Venture) took effect from June 16, 2007, to June 15, 2012.
Under the deals, the contractors shall, among other things, provide the required number of light rail vehicles (LRVs).
But COA found, among other things, that “[t]he maintenance contractors were not able to deliver the daily train requirements of at least 114 LRVs for Line 1 and 16 train sets for Line 2.
Yet, both contractors were just the same paid in full.” “For the sample months alone, only 98 LRVs for Line 1 and 13 train sets for Line 2 were provided,” the auditors said. LUIS LEONCIO