MRT-3's revenue drops by P408 million in 2019; 48 Dalian trains still idle

Adrian Ayalin, ABS-CBN News

Posted at Oct 16 2020 06:22 PM

Commuters get ready to board the first Dalian train compatible with existing train lines at the Kamuning MRT 3 station on October 15, 2019, during its first ever run as the China-made train will only to be deployed during off-peak hours from 8:30 pm to 10:30pm. Jire Carreon, ABS-CBN News

MANILA — The Department of Transportation (DOTr) must increase its revenue collections from MRT-3 after registering a revenue drop of P408 million in 2019, its steepest drop since 2015, the Commission on Audit (COA) said.

In its 2019 audit report on the DOTr, COA said that MRT-3 only earned P1.907 billion, compared to its P2.316 billion revenue in 2015.

State auditors noted that the DOTr’s free train rides to students in 2019 “could be a contributory factor in the drop in revenue collections.” 

DOTr in 2019 started offering free train rides to students during weekdays from 5:00 to 6:00 in the morning and 3:00 to 4:30 in the afternoon. 

The agency, however, explained to the commission that the decrease in revenues was primarily due to the decrease in the number of reliable and safe trains available to MRT-3 since 2018 due to years of neglect, bad maintenance practices, and failure to undertake scheduled overhaul and upgrading works. 

DOTr also stressed that although riding MRT-3 has been safer, the management still wants to increase the number of train commuters and collect bigger revenues through its comprehensive rehabilitation efforts.

“This direction to expedite fixing MRT-3 is the rationale for engaging MRT-3’s original designer, builder, and maintenance provider, Sumitomo Corporation - Mitsubishi Heavy Industries, with rehabilitation completion [that’s] targeted in July 2021,” DOTr told state auditors. 

State auditors also pointed out that 48 Dalian trains procured 5 years ago worth P3.759 billion would have to remain idle until 2022, unless the restrictive condition in the rehabilitation and maintenance agreement with Sumitomo is waived.

The prolonged delay in the testing, commissioning and acceptance of the Dalian trains could also result in the imposition of liquidated damages of P4.041 billion, COA said. 

The DOTr management responded that the Japan International Cooperation Agency has already informed the MRT-3 management of its non-objection to the way-forward plan for the eventual regular operational deployment of the Dalian trains.

“As part of its way forward, the former has proposed several amendments to the rehabilitation and maintenance agreement, which if pursued, would entail a JICA loan financing, subject to JICA concurrence,” it read. 

Aside from the idle Dalian trains, the audit team also said in its report that DOTr had an unrecorded donation of 190 units of electric tricycles amounting to P101.313 to the Department of Energy (DOE). They said the agency should record the donations immediately. 

“The dropping of the e-trike units in the DOE books and the non-recording of the same in the DOTr books will pose a risk of loss and misuse of public resources,” it read. 

COA recommended that the electric tricycles be deployed and used so it would not go to waste. The commission added that the e-trikes would not only be helpful for the modernization of the transport sector but it would also support the tourism industry in Boracay. 

But DOTr said the deployment plan and supplemental deed of donation was yet to be approved by the secretary of the Department of Energy.

A copy of the audit report, uploaded by the commission on its website, was received by the office of Transportation Secretary Arthur Tugade on September 30, 2020.

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