The government is considering filing a complaint against Chinese train supplier CRRC Dalian Co. Ltd before the Singapore International Commercial Court to seek compensation for 48 idle train sets.

“Arbitration is possible. I expect this will be the path the government will be taking on the Dalian trains,” Transportation Secretary Jaime Bautista told reporters.

The coaches cannot be used since these are not compatible with the rail configuration of the Metro Rail Transit Line 3 (MRT-3) for which they were bought.

Bautista told reporters the government will seek damages for the failure of the Chinese firm to meet the requirements of the contract signed during the term of the late President Noynoy Aquino.

Bautista said the government will ask for just compensation to cover the costs incurred for the equipment.

“We should be fair and reasonable in terms of what should be collected from Dalian,” he said.

The filing of an arbitration suit should precede the planned privatization of the MRT-3’s operations, the DoTr chief said.

The Dalian trains would have increased the passenger capacity of the MRT3 line. These were procured in 2014 and delivered in 2016 but remained idle due to incompatibility issues.

For one, the weight of the train sets was not compatible with the MRT-3 track specifications.

Maintenance costs to balloon

“The reason we don’t want to operate these trains at this time is the possibility of incurring for the government bigger maintenance and operating costs,” the Transportation chief said.

The Commission on Audit had urged the government to raise the concerns about the coaches to CRRC Dalian.

Bautista said the DoTr is coordinating with CRRC Dalian to make the train sets compatible with the MRT-3.

“The Chinese firm is looking at how the weight can be reduced. A train unit was brought to Japan to evaluate its compliance with the requirements. Hopefully, we can agree with them on a way to operate the Dalian trains,” he said.

The fate of the Dalian trains, however, might be left to the private concessionaire who will take over the operation and maintenance of MRT-3 in 2025.

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

The 48 Dalian trains were worth P3.7 billion. These were delivered starting in 2017.

Government sources said Aquino administration officials were aware the specifications of the Dalian wagons were incompatible and non-compliant with the MRT system, yet the contract was pursued.

While some individuals were charged before the Ombudsman over the controversy, the cases were dismissed.

The government is estimated to spend P2 billion on maintenance if it insists on using the oversized trains for MRT3.

In the arbitration, the DoTr may seek to renegotiate the contract so the trains could be returned and the purchase amount refunded.