transportation
CONSPIRACY
By Miguel Raymundo
Yearly, the government allots billions of pesos in taxpayer’s money to build roads, but it’s the private contractors who are making a killing at public’s expense.
Take the 94-km North Luzon Diversion Road, built in 1996 by the government which has fattened the pockets of its new owners, Indonesian conglomerate Salim Group.
Renamed North Luzon Expressway, the project has emerged as a cash cow of listed Metro Pacific Tollways Corp. (MPTC), the group’s infrastructure unit in the Philippines.
Last year alone, the MPTC saw profit bursting at the seams, surging sharply, thanks – or no thanks – to the government’s benevolence in allowing with impunity the company to jack up its toll rates amid mounting protests from motorists.
Buoyed by robust revenues, the Salim firm even went to the extent of proposing to stretch its franchise to cover the lucrative Manila-Subic-Clark-Tarlac expressway under a 50-50 revenue sharing deal with the government.
Bottomline
But the proposal hardly took off the ground, shot down in no time at all by a government wizened to the profiteering ways of private contractors.
Typical of its insensitivity to public welfare, the state-run Toll Regulatory Board allows a toll road operator every two years to raise its rates without the need for the agency’s prior approval.
Cashing in on a hefty traffic volume, the MPTC’s bottomline, up by a hefty 32 percent to P2.784 billion year-on-year, only showed how the government’s infrastructure program has turned out to be big business for the private contractors.
In short, a conspiracy exists between government and the private contractors by cashing in on the commuters’ gullibility to take any toll rate increase without raising a whimper.
Admittedly, the privatization of public utilities only leads to huge profits for big foreign and local corporations – and, effectively, widen rich-poor gap.
Other than TRB’s automatic approval of any toll rate increase every two years to allow operators a fair return on their investments, another contentious issue is the 12 percent value-added tax on toll approved by the Supreme Court which has been passed on by operators to the already financially burdened commuters.
Benchmark
Ultimately, the country’s public roads and highways should be taken over by the government to prevent corporations from increasing their profits at public’s expense.
The toll road operator’s wallowing in profits amid complaints of rising rates could have provided a benchmark, a caution for the government in tempering privatization of its public infrastructure projects.
But that appears not to be the case as more and more projects are up for grabs, ranging from toll roads to ports, airports, to the highest bidders in the private sector.
Apparently, profitability is key reason why there’s a mad rush among the country’s corporate titans to bid for the proposed P35.42 billion, 44.6-km Cavite-Laguna Expressway (Calex).
Auctioned off by the Department of Public Works and Highways (DPWH), the project has attracted four qualified bidders, including powerhouse San Miguel Corp. (SMC).
Best Deal
Jockeying for the highly lucrative contract is so intense that the Salim Group has sought SMC’s disqualification for allegedly submitting a non-compliant bid.
The Indonesian group has argued that SMC’s bid did not contain a valid bid security, a bond that protects the government in case a winning bidder decides not to proceed with the project.
But SMC, which has adopted infrastructure as an integral part of its core businesses, has disputed its rival’s contention.
“We are compliant. We have a very competitive bid and we are confident we can give government the best deal for the benefit of the taxpayers and the country,” it says in a statement.
Irked over the rivals’ raising of petty issues, the conglomerate admonished them not to waste energy pulling each other down, saying “we want our countrymen to get the best price from several, not a few bidders.”
Cavite-Laguna
Other bidders expected to give competitors a run for their money are the joint venture of Ayala Corp. and Aboitiz Group and Malaysian infrastructure firm MTD Bhd.
Part of the government’s public-private partnership (PPP) program, the project starts from Kawit, Cavite, and ends at the Mamplasan interchange of the South Luzon Expressway in Biñan, Laguna.
Based on DPWH’s terms of reference, private investors will finance, design, construct, operate and maintain the expressway that will connect Cavite and Laguna directly, greatly reducing travel time between the two provinces.
The two highly industrialized and urbanized provinces are home to hundreds of international and multinational electronic, semiconductor, automotive and manufacturing companies, in addition to residential developments.
With infrastructure deemed as a key component of economic growth, the government is projected to invest about P750 Billion for projects between 2011 and 2016.
Budget
Separately, the Department of Budget and Management (DBM) is also proposing about P403 billion in infrastructure projects in 2014 to boost the country’s competitiveness, spur investments, create jobs and improve the country’s economy.
The budget outlay would result in a five percent infrastructure spending in relation to gross domestic product (GDP) ratio and increase revenue effort to 17.1 percent by the year 2016.
But somehow, the government has rationalized what it says is the essential role of the private sector as the main engine for national growth and development.
Under the PPP, the government will provide incentives to stimulate private resources for financing the construction, operation and maintenance of infrastructure projects.
To a large extent, the government is even willing, on a project basis, to protect investors from certain regulatory risks such as court orders or decisions which prevent them from adjusting tariffs to contractually agreed levels.
Risks and Regulations
Such regulatory risk insurance could take the form of make-up payments from the government to PPP investors, other guaranteed payments, and adjustments to contract terms.
The specifics of the type of protection to be offered by the government, and the mechanisms through which such protection will be offered will be part of the contract terms for each project. Such protection will only be offered for solicited projects which undergo a competitive bidding process.
But certain advocacy groups had criticized the PPP, saying the public is being held hostage by private corporations whose overriding purpose is only to amass profits as much as possible.
In effect, the responsibility to build roads is being handed over by the government to private concessionaires who are only too eager to squeeze money from the financially depressed people.
Why SMC’s Us$10-B Airport Is Needed
SMC, which has diversified from food and beverage to infrastructure, plans to pursue the project under the government’s 25-year build-operate-transfer (BOT) scheme.
MANILA – Foresight could have spurred powerhouse San Miguel Corp. (SMC) to build its proposed US$10 billion airport as the nation’s new international gateway.
Reflecting its dynamism as a major infrastructure builder, the airport takes into account the rapid rise of passenger traffic in Metro Manila, the nation’s trade and industry hub.
From 31.88 million in 2012, the traffic is projected to rise to 49.8 million in 2020, 75 million in 2030, and 106.7 million in 2040.
The projection, which includes expected traffic from neighboring Central Luzon and Calabarzon regions, is based on a study by the Japan International Cooperation Agency (Jica).
As SMC has envisioned, the facility aims to replace the congested and more than three decades old
Ninoy Aquino International Airport (NAIA) Terminal 1 in Pasay city.
BOT scheme
As it is now, the NAIA is handling over eight million domestic and international passengers a year, nearly double its designed capacity of 4.5 million.
Unlike the NAIA, the new airport would have four runways to cater to a high-passenger capacity.
Under SMC’s proposal, the airport will initially cover the NAIA’s 400-hectare area to be expanded later to 800 hectares.
The scheme allows SMC to operate the project to recoup investments before turning it over to the
The conglomerate’s proposed airport coincides with the expansion plan of its aviation unit Philippine Airlines (PAL), a joint venture with ethnic Chinese taipan Lucio Tan. SMC has a 49 percent stake in the national flag carrier, while Tan owns the remaining 51 percent.
Expansion plans
Eyeing the lucrative United States route, PAL’S plan calls for the deployment of its fleet of newly acquired Boeing 777-300ER aircraft for the long-haul flights to the US.
The flag carrier viewed the reclassification of the country’s aviation safety rating to Category 1 as a boost to tourism and trade that would open new and exciting opportunities for PAL.
Passengers can enjoy nonstop flights to Los Angeles and San Francisco aboard new aircraft equipped with the most modern cabin and state-of the-art amenities, including lie-flat beds in business class, PAL President and Chief Operating Officer Ramon S. Ang said.
Currently, PAL operates a total of 26 weekly flights to the US, with frequencies to Los Angeles, San Francisco, Honolulu and Guam.
The flag carrier intends to deploy six Boeing 777-300Ers costing about US$1.2 billion, part of the airline’s fleet modernization program, for the US flights.
For flights to Honolulu and Guam, PAL will continue to utilize new wide-body Airbus A330-300s and single-aisle A320-200s.
Apart from fostering a new era in the flag carrier’s transpacific service, Ang said PAL would also explore possible airline partnerships with foreign carriers to maximize the company’s growth potential.
MRT3: Six Years Of Failure?
Come 2016, the Aquino administration will be on its sixth year of failure to address MRT3 passenger overcrowding.
Even after PNoy’s term is over, the MRT3 station running from North EDSA to Taft will still be an unsafe place to be in during rush hour.
Studies on modern railways the world over all agree on one thing: overcrowded trains and train stations equals more accidents equals more passenger deaths.
There is a certain point when apologies become tiring, because it is becoming repetitive and scripted. Commuters have over-extended their patience these past four years.
Assurances by Secretary Herminio Coloma are becoming hollow and meaningless in light of the malfunctioning facilities in almost every MRT3 station.
If it’s not the often-broken escalators, it’s the comfort rooms that do not just have faulty faucets, but ill-maintained sanitation. Even the train station computers are reported to be malfunctioning.
Why can’t the MRT management emulate Tokyo train stations? They hired packers who help squeeze passengers into the train cars, and can do so in such an orderly manner.
BAYAN MUNA Rep. Neri Colmenares is only stating what has already been obvious: four years of failure to solve overcrowding is a sign of incompetence on the part of Malacanang.
If you want to see the current state of a country, you only need to look at how it runs train stations.
After a well-hyped press release on the government takeover of the MRT3 last January 2014, commuter woes are still mounting, with no solution in sight.
It makes one think that the promised takeover may save the government billions of pesos, but it will surely tax daily commuters.
It is like being between a rock and a hard place. Either you take the overspeeding buses in EDSA, or you get yourself squeezed like sardines in the MRT during rush hour.
That is not much of a choice. That is a threat to one’s life and safety.
LGUs: Port Users Welcome To Do Business In Batangas
The largest confederation of Manila-based port users are more than welcome to do business in the bustling port city of Batangas and contribute to the whole province’s growth by tapping into the modern international trade gateway Batangas Container Terminal (BCT).
This was personally assured by Batangas governor Vilma Santos Recto and Batangas City secretary to the mayor Atty. Reginald Dimacuha to the officers of the Port Users Confederation (PUC) during the group’s courtesy call to Batangas’ key local executives, recently.
At the meeting set by BCT operator Asian Terminals Inc., PUC officers, led by retired colonel Rodolfo de Ocampo told local executives that their group is seriously looking at the Port of Batangas as an alternative port for their shipments because of its strategic location, proximity to markets and its modern port facilities.
They also discussed matters of mutual concern and interest for PUC’s 17-member associations, including security for goods, trucks and other trade assets which were immediately considered by the local officials.
“A vibrant province and a modern port that facilitates trade and provides more livelihood opportunities for many Batangeños is what we truly want. Just as we are actively promoting Batangas as a safe, progressive and business-friendly haven for investors, you are most welcome here and are assured of our full support,” Recto told PUC.
Dimacuha echoed the same, saying that the city government is very much supportive of business enterprises wanting to operate in Batangas. “We want you to stay and locate here and we are willing to cooperate with you as we contribute to the development of the port city of Batangas,” he said.
De Ocampo stressed that as far as the port facilities, the roads and support of the local governments are concerned, PUC finds the Port of Batangas a viable alternative for its business.
Meanwhile, at the same meeting, ATI marketing manager Reginald Rivera reported to stakeholders that BCT has experienced exponential growth over the past year and has made significant strides in enticing more customers in the technology, manufacturing and other major industries to come on board. He said Batangas, Laguna and even industries south of Manila are now fully benefiting from BCT’s competitiveness.
“Based on this significant uptrend and good reception from our customers, and with the help of our partners in government and the LGUs, we are confident of getting additional international ship callers for BCT soonest,” Rivera said
Expo Autoworld Brussels 2
Electric and Amphibious Cars
By Jun-Jun Junia
AFTER seeing a jeepney and seeing lots of old cars inside the AUTOWORLD Expo, it made me realize that I’m inside a vintage car museum. Now that made it more interesting. It’s car heaven.
There is one nook that caught our attention. It was a selection of different car models from vintage-looking to futuristic-designed vehicles. As we went closer to the area, there was a sign that read “EVOLUTION OF ECO CARS” and there I saw, in the corner, a 1916 Detroit Electric.
Yes, you read it right, there was an electric vehicle (EV) during those times. I’m not sure if it was running but the body is in perfect shape. This EV was popularly sold in the 1910’s, selling around 1000 to 2000 cars a year.
The Detroit Electric was mainly sold to women drivers and physicians, as this car starts immediately without the physically demanding hand cracking of the engine that was needed with early internal combustion engine vehicles. They outsold all other types of cars since they did not have the vibration, smell, and noise associated with gasoline cars.
The question is, what happened to them? In my research, I learned that in the 1920s, internal combustion engine autos became more common and inexpensive, sales of the Electric dropped. The stock market crash of 1929 forced the company to file for bankruptcy. Detroit Electric cars were available only until 1942.
Of course we all know that now, electric is in again due to imminent environmental concerns that made car manufacturers develop hybrid vehicles and electric vehicles. So car manufacturers went back developing electric vehicles after all, to eliminate emissions and save the world.
Going to the second floor of the museum, we saw a car displayed near the stairs. It blew our minds away. We thought this type of car was only intended for films, perfect for a spy movie. It’s a 1950 Amphicar, a real amphibious car which can be driven into water and converts into a boat. Just like in the movies! I’m amazed with the design of this car.
At the back, underneath the car, near the location of the muffler, was a propeller. The propeller is sealed and there was no muffler in the area, meaning this can really be converted into a speed boat. Amazing! Looking at this car reminded me of the floods in our country.
I guess this car design is the answer to the flood prone areas in the Philippines since heavy rainfall nowadays causes chest deep waters, or sometimes even worse. Imagine if you have an amphibian car when it’s raining hard and you need to go to work…have nothing to fear, amphibian car to the rescue! You don’t have to be afraid of parking your car in flooded parking areas, all you need is an anchor.
Overall AUTOWORLD is a big car museum with over 300 interesting vintage cars on display. From an 1890s three-wheeled car to a recent electric one, race cars from the 60’s to 90’s with Formula 3 and formula 1 cars, to add, some vintage motorbikes and royal carriages were included as well. The place was really a car lover’s paradise!
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Expo Autoworld Brussels
An Exhibit of Automotive History 1
By Jun-Jun Junia
LAST month, my wife and I visited her best friend in Brussels, Belgium. Coming from Paris and Italy, we were sort of sick of going to another museum so we looked for alternatives in Belgium. The car geek that I am, I was more than happy to find out that they were holding a car exposition called AUTOWORLD. We didn’t think twice about going.
The Expo Autoworld is at Parc du Cinquantenaire Jubelpark in Brussels. It was a very beautiful venue with sophisticated architectural design. Seeing the sign Autoworld felt like a kid about to enter a candy store.
As we approached the entrance of the building, we heard the raging engine of a 1962 Ferrari 250 GTO about to storm out of the the through the front entrance.
This gave me a boost of excitement. I saw the car closely when it stopped in front of me and, to my surprise, the car wasn’t finished like a show car with the usual flawless paint, detailed engine, shiny mag wheels. It did not have the expected show-car appearance.
This gave me an impression that the cars inside were not only for display, but cars that were really used everyday—driven by the owners and not just parked on their garages like figurines.
It was a ‘62 Ferrari 250 GTO–for crying out loud—which some say the greatest Ferrari of all time, going out of the building, really amazing!
We were convinced to buy tickets and see the exhibit.
At the entrance I saw a Porsche 911 displayed with the back drop saying Ferdinand Porsche, The Heritage, from electric to electric. I wonder what it meant but its seems it has something to do with the exhibit’s inspiration.
Inside were a hangar-full of cars, mostly vintage, organized per year of make. We were clearly educated on the history of cars, like going around another museum.
The first impressive car I saw was a 1911 Rolls-Royce Silver Ghost. When I looked at the engine, I assumed it might have been the first 6-cylinder car available in the market during those times, equivalent to sport cars nowadays.
Beside the Rolls was a 1911 Benz. We noticed that the old logo of this German car (popular now with a three pointed star) is just the word BENZ.
You are probably asking why they are now called MERCEDES BENZ? Where did the word Mercedes come from? We learned while going around the expo that MERCEDES is a Spanish girl name meaning “grace” and was the name of the daughter of Emil Jellinek the guy behind Daimler-Mercedes engines. That’s why we saw a girl’s picture beside a 1933 Mercedes Benz type 370, it was Mercedes.
At one corner we saw a famous vehicle in our country. The original vandalized vehicle, the Philippine pride, uniqueness at it’s best: The Jeepney built by Francisco Motors. I took a lot of pictures of it even though I was asking myself, “What am I doing? They are all over Manila.” But looking at it in an Auto Expo in Brussels Belgium makes me feel proud so I clicked away!
Going around Autoworld taught us mostly about the automobile industry’s history. We saw mostly the evolution of the logos which interested me. There I saw the four rings of the AUDI logo but when I looked closer, I saw the name AUTO UNION in the center of the four rings. The name of the car is HORCH 930 V 1939 and it bore the logo of the four rings of Audi.
After further research, I learned that in 1932 Audi merged with Horch, DKW, and Wanderer, to form Auto Union. It was during this period that the company offered the Audi Front that became the first European car to combine a six-cylinder engine with front-wheel drive. So I learned that the four rings symbolizes the merger in 1932 of four previously independent motor vehicle manufacturers: Audi, DKW, Horch and Wanderer. (To Be Continued)
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MRT3 and Aquino’s ‘Bouncing Czech’
by Mentong Tiu-Laurel
AFTER almost two years of explosive controversy, the full facts of the Ballsy-Eldon Aquino-Cruz and the US$30-million mystery question surrounding the MRT3 deal may have come to light.
The BS Aquino government and the Czech embassy would like the public to think that a third-ranking level neophyte executive is the brain and mover in the MRT3 P4.5-billion project. The said executive being put on “indefinite leave” (which was rejected) is being made a “fall guy” and the story used to abort the awarding of the MRT3 “capacity expansion” project (additional train coaches) to the lowest bidder in the hopes of keeping the highest bid—the Czech trains—alive.

Instead of being the villain, the “fall guy” is actually the public’s champion. MRT3 General Atty. Manager Al Vitangcol conducted a comprehensive study with the MRT3 Technical Working Group consisting of Engr. Mike Narco, Ms. Natividad Sansolis and Eng. Raphael Lavides, and other professionals. Aquino’s DOTC secretary and LP politico, Emilio Abaya, issued a special order to include two personal factotums: Usec. Julianito Bocayon, a longtime buddy at the Naval Intelligence Group, and Honorito Chaneco an Abaya appointee and Philippine Science High School classmate, apparently to sway the technical committee.
The significance of the technical committee is that after thorough study is recommended government estimate of US$1.89 million/coach against the Czech Inekon’s US$3 million/coach. Vitangcol and the technical men in the Technical Working Group established the best and lowest government estimate for the project. Inekon’s bid for the LRV, light rail vehicle, started at US$3.3-million/coach in early 2012 negotiations.
The Inekon people and the Czech embassy had been working on the MRT3 deal years earlier and it is in this long series of deal-making effort that the “syndication” by the Czechs with the Aquino family is revealed. Among them are: the appointment as Inekon agent of Yorgis Psinakis, nephew of Aquino and Lopez clans’ crony Steve Psinakis; Aquino’s first cousin Jorge Aquino-Lichauco as “handmaiden”; DOTC Usec. Rene Limcaoco, brother of Cory-Gloria-Yellow stalwart Dodi; involvement of LP stalwarts in talks with Inekon and the Czech ambassador.
Jorge Aquino-Lichauco who has denied involvement actually acted as “handmaiden, and Usec. Limcaoco are caught with the “smoking gun” in a memo issued by the latter to Atty. Al Vitangcol, dated 10 April 2013, transmitting the “Sample Terms for LRV (light railway vehicle) Terms of Reference from Jorge Lichauco” who does not have any official role in the DOTC and with any of the parties involved in the MRT3 transactions but carries the weight of Usec. Rene Limcaoco’s official letterhead which “transmit” Lichauco’s “non-official” communication to a DOtC third rank official.
These have been reported by Charlie Manalo of the Tribune, who has been giving a blow-by-blow account of these since mid-2013 in the mentioned publication.
The MRT3 $ 30-million “kickback” story emerged after a radio network broke the news with unattributed sources claiming that Ballsy Aquino-Cruz and Eldon Cruz, sister and brother-in-law of BS Aquino III, were involved in “extortion” of the Czech company for awarding of the MRT3 deal. The Czech Inekon’s chairman and CEO Josef Husek and ambassador Josef Rychtar had been asked repeatedly whom they were really “extorting” but persistently been coy in naming anyone beyond suggestive affidavits about “an informal dinner in a Makati restaurant on July 9, 2012”, and a meeting in Rychtar’s Forbes residence where al Vitangcol was not even present and quoting only a Mr. Wilson de Vera.
Why is Atty. Al Vitangcol being made the “fall guy” in the mainstream media when the Czech company Inekon’s officials, Josef Husek, and ambassador Rychtar have denied any direct accusation against Vitangcol while naming Wilson de Vera? In a Husek affidavit to the NBI on Oct. 5, 2013 is Mr. Wilson de Vera whom he stated, “While talking about the tender, Mr. Wilson de Vera suggested that we would be selected as (the) supplier of the tram vehicles and related services, provided that we (pay) to an unknown entity a certain amount of money. Mr. Wilson de Vera indicated such payment should amount to USD 30 million.”
Mr. Wilson de Vera is an LP stalwart in Pangasinan and a close friend of Eldon Cruz and Aquino aunt Tessie Oreta. Mr. Wilson de Vera is also a director of the MRT3 maintenance contractor PH Trams, which won the MRT3 maintenance contract over Sumitomo Corporation, evidence of the company’s clout with the new administration. Also in PH trams are Manolo Manalit who is also with the Metro Rail Transit Corp. (Pangilinan’s controlling shares MRT3) and Marlo dela Cruz who is reportedly the Mar Roxas and Korina Sanchez connection and with the Liberal Party. PH Trams maintenance contract has been taken over by Global APT JV (Joint Venture) where Marlo dela Cruz also is.
The Liberal Party imprint on the operations of the MRT3 and the DOTC today is all-embracing, from the secretary down the organization and into its subcontractors. Central to the MRT3 extort scandal is the Ballsy Aquino-Eldon Cruz trip to the Prague and, allegedly, to the HQ of Czech company, Inekon. Jorge Lichauco was earlier speculated as the couple’s tourist guide to the country but later it is revealed that Yorgis Psinakis, Inekon agent, did the honors. The Czech ambassador eventually retracted and exonerated the Aquino couple from the “extort” allegations, but questions linger.
The Aquino-Cruz couple claim they were in Prague to pray at the famous shrine but given Inekon’s official agent making arrangements, and Inekon’s years of “syndication” with Aquino relations and Aquino controlled LP political cohorts, the exoneration and the diversion to a “fall guy” smacks of a cover up.
The lowest winning bid from Dalian Locomotive for the MRT3 capacity expansion project at $ 1.8-million and under the US$1.89-milliion government estimate is now under evaluation. The public’s concern is that the controversy is being stoked to whip up a cloud cover and scuttle the awarding, meanwhile keeping alive the deal seemingly “railroaded” since 2012, which has been working behind the Aquino and Liberal Party cover. Thus the vehemence with which the Czechs have tried to whip up controversy and create diversionary tactics is understandable, such as the “corrupt” fall guy ploy while the Liberal Party operators are allowed to go under the radar.
Does this explain the “bouncing Czech”?
If US$30 million or some amount had not exchange hands, would such vehemence be commensurate?
***
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