DOTr mulls arbitration case for unused Dalian trains

The Department of Transportation (DOTr) is considering filing an arbitration case against Chinese train maker CRRC Dalian Co. Ltd to seek reparations for the still unused 48 train sets for the Metro Rail Transit Line 3 (MRT-3).

In a chance interview with reporters, Transportation Secretary Jaime Bautista said it may file an arbitration suit before the Singapore International Commercial Court.

“Magkakaroon yan ng liquidated damages kasi hindi nila na-meet yung requirements natin e. But of course, subject to agreement... We should be fair and reasonable in terms of what should be collected from Dalian,” Bautista said.

“Posibleng magkaroon ng arbitration ‘yan. In fact, nakikita ko na doon papunta ‘yang problem natin on Dalian trains,” the Transportation chief said.

He said the eventual filing of an arbitration suit can happen before the planned privatization of the MRT-3’s operations begins.

The procurement of Dalian trains was aimed at increasing the capacity of the MRT-3 to 800,000 passengers per day and decongesting the rail system.

The trains were procured by the government in 2014 and were delivered in 2016 but remained idle due to incompatibility issues.

Bautista explained that since the weight of the Dalian train sets were not compatible with the MRT-3's tracks, the agency opted not to use the trains.

“The reason why we don’t like to operate those trains at this time is posibleng maging mas mataas ‘yung maintenance cost. Maintaining the rail line might be affected also and it can result in higher operating cost also,” the Transportation chief said.

The Commission on Audit had earlier recommended for the DOTr to follow up with CRRC Dalian on the concerns on "rectification relative to the Tare Weight and Depot Maintenance Equipment Compatibility as well as the pending Overhaul training relative to the Second Operating Condition Reliability Run Scope of the Way-Forward Plan."

State auditors had also recommended active coordination with CRRC Dalian and Sumitomo Corporation —the maintenance provider for MRT-3– for the necessary activities to fast-track the completion of the Way-Forward Plan to fully utilize the train sets and ultimately for the riding public to obtain the benefits for which these trains were procured.

Nevertheless, Bautista said the DOTR is continuously working with CRRC Dalian to make the train sets suitable for the MRT-3.

“In fact, tiningnan kung paano mababawasan ‘yung weight… merong train na dinala na rin sa Japan e para i-evaluate kung papaano magco-comply doon sa requirement namin as agreed. Siguro, if we will be satisfied, we can agree with them to operate the Dalian train,” he said.

The Transportation chief also said that the eventual use of the Dalian trains might be up to the private concessionaire who will eventually take over the operations and maintenance of the MRT-3 in 2025.

As early as February 2023, the DOTr announced plan to privatize MRT-3 as the build-lease-transfer (BLT) contract with the private sector owner of the EDSA railway system will lapse in 2025.

Under the 25-year BLT agreement, the government manages and leases the 16.9-kilometer train system and pays monthly equity rental payments to the Metro Rail Transit Corp. (MRTC), which owns the facility and financed the construction of the MRT-3.

Bautista revealed that one of the parties which submitted unsolicited bids to take over the operations of MRT-3 added a provision in their proposal how to operate the Dalian trains despite their weight.

“We have to involve the private sector,” he said. —VAL, GMA Integrated News