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I. Overview of the Project

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I. Overview of the Project EC-OMB Corruption Prevention Project Integrity Development Review of the Light Rail Transit Authority I. Overview of the Project Integrity Development Review is a process of building and sustaining an agency’s ability to prevent corruption from happening. It is about integrating corruption resistance strategies into the various organizational facets of an agency so that factors that contribute to corrupt behavior can be checked and those that discourage corrupt acts or malfeasance are reinforced. As the old adage goes, “an ounce of prevention is better than a pound of cure.” There are various approaches to prevent corruption. One tested formula is that of Klitgaard’s minimizing corruption by demonopolizing power, circumscribing discretion and raising accountability. Another is a four-point approach, namely limiting opportunities for corrupt transactions, decreasing the gains, increasing the probability of being caught and raising the magnitude and severity of penalties. In any case, a thorough diagnosis is a logical first step in order to establish activities that are vulnerable to corruption, check availability of control mechanisms that can detect and deter wrongdoings and evaluate the effectiveness of penalty and reward systems. External parties can do diagnosis objectively. But self-assessment would be ideal especially for reform-oriented agencies. This is the idea behind the Integrity Development Review Project. This aims to support the leadership and management of the Office of the Ombudsman in improving governance in the public sector by providing tools for objective assessment of corruption vulnerability and resistance of agencies. The project is implemented by the Development Academy of the Philippines. Under the European Commission – Office of the Ombudsman Corruption Prevention Project, eleven (11) public sector agencies are scheduled to undergo the IDR. These are the Department of Agrarian Reform, Department of Health, Bureau of Corrections, Bureau of Fire Protection Land Registration Authority, Light Rail Transit Authority, Philippine Veterans Assistance Office, Procurement Service Board and the Philippine Navy. The integrity development framework builds on the Corruption Resistance Review (CRR) approach developed by the Independent Commission Against Corruption of New South Wales and the Corruption Vulnerability Assessment (CVA) tool adapted by DAP from the Office of Management and Budget. The CRR helps agencies assess their level of corruption resistance and progressively develop and implement corruption prevention measures to meet certain standards of organizational integrity. CVA determines the susceptibility of agency systems to corruption and examines the adequacy of safeguards to forestall wrongdoings. The IDR process that evolved in this project consists of two stages: Stage 1 involves corruption resistance review via guided self-assessment, indicators research and a survey of employees. Stage 2 demands a detailed corruption vulnerability analysis. Development Academy of the Philippines Page 1 Final Report (draft) as of October 2007 For discussion purposes only, not for quotation EC-OMB Corruption Prevention Project Integrity Development Review of the Light Rail Transit Authority II. Overview of the Agency: Light Rail Transit Authority History The LRTA is a wholly-owned government corporation created on July 12, 1980 by former President Ferdinand E. Marcos pursuant to Executive Order (EO) No. 603, as amended by EO No. 830 dated September 1982, and EO No. 210 dated July 1987 by the then President Corazon C. Aquino. Today, the LRTA is the agency of government primarily responsible for the construction, operation, maintenance and/or lease of light rail transit systems in the Philippines in order to provide reliable, efficient, dependable, and environment-friendly mass rail services to residents of Metro Manila. LRTA currently operates and manages two rail transit lines: LRT Line 1 or Metrorail which commenced operations in December 1984 and LRT Line 2 or Megatren which commenced operations in 2003. The LRTA is an attached agency of the Department of Transportation and Communications (DOTC). It is one of the 14 government-owned and controlled corporations being monitored by the Department of Finance (DOF). The Office of the President, through the Department of Budget and Management (DBM) approves the operating budget of the LRTA. The House of Representatives and the Senate, likewise, review and deliberate on the budget proposals of the LRTA. All on-going and proposed infrastructure projects are submitted to the DBM for funding, to DOF for financial evaluation and endorsement to the National Economic and Development Authority (NEDA) for monitoring and/or approval. The Light Rail Transit (LRT) system is a component of the Strong Republic Transit System (SRTS), a project of the Office of the President aimed at providing a reliable, seamless and integrated mass transit system that would be at par with international standards. SRTS involves the construction of seven interconnection facilities or links to physically integrate the different railway systems in the Philippines, including LRT, Metro Rail Transit (LRT) and Philippine National Railways (PNR) and provide convenience to the riding public. Today, of the total fleet of 91 LRVs, 78 have been fully rehabilitated LRVs for Line 1 and LRT Line 2 System. LRT Line 1 LRT Line 1 consists of a 15.4-km elevated railway system extending from Baclaran in Pasay City to Monumento in Caloocan City. Initial financial assistance for the LRT project came from the Government of the Kingdom of Belgium, which granted an interest-free loan in 1980 in an aggregate amount of 900 million Belgian francs, payable over 30 years until year 2012 inclusive of a ten-year grace period. A Belgian consortium consisting of Ateliers de Constructions Electriques de Charleroi, BN, Constructions Ferroviaires et Metalliques (formerly Brugeoise et Nivelles), Tractionnel Engineering International and Transurb Consult provided the cars, signaling, power control, telecommunications, training and technical assistance. Construction of the first LRT system started in October 1981 under the responsibility of the Construction and Development Corporation of the Philippines, with assistance from the Swiss firm of Losinger and the American company Dravo (through its Philippine subsidiary, Filipinas-Dravo). The government appointed Electrowatt Engineering Services of Zurich (Switzerland Electrowatt) to manage and supervise the project. Electrowatt set up offices in Manila and later became responsible for studies relating to the capacity expansion of Line 1 as well as the construction of Line 2, among others. Development Academy of the Philippines Page 2 Final Report (draft) as of October 2007 For discussion purposes only, not for quotation EC-OMB Corruption Prevention Project Integrity Development Review of the Light Rail Transit Authority In 1996, the LRTA undertook the LRT Line 1 Capacity Expansion (Phase I) Project, which involved the transformation of the old two-car train sets to a three-car train configuration in conjunction with the acquisition of new generation trains which are longer and wider than the original fleet. Thus, the fleet now consists of 21 three- car trains transformed from the old fleet and seven new-generation and air-conditioned four-car trains, resulting to an increase in passenger capacity from 18,000 passengers per hour per direction (PPHPD) to 27,000 PPHPD. In May 2003, responsibility over the maintenance of Line 1 was bestowed to a Maintenance Transition Team created in view of the termination by LRTA of its contractual agreement with its private maintenance contractor, Transurb Technirail. The maintenance of Line 1 system is handled by in-house personnel until June 2007 when the maintenance of the system including procurement of consumable spare parts was outsourced through competitive bidding. Figure 1. THE LIGHT RAIL TRANSIT SYSTEM — LRT LINE 1 AND LRT LINE 2 Development Academy of the Philippines Page 3 Final Report (draft) as of October 2007 For discussion purposes only, not for quotation EC-OMB Corruption Prevention Project Integrity Development Review of the Light Rail Transit Authority MRT Line 2 The MRT Line 2, also called the Megatren, is composed of a 13.8-km. mass rail transit line that passes through four cities and one municipality in the metropolis, namely Pasig, Marikina, Quezon City, San Juan and Manila. Construction for the MRT Line 2 System started in 1997 and completed in 2004. It was built at a cost of P29.973 billion mainly financed by concessional loans secured from the Japan Bank for International Cooperation (JBIC) in three loan tranches. Compared to Line 1, MRT Line 2 was more difficult to build because the technology adopted was comparatively advanced both in civil and mechanical aspects. A special method called the pre-casting segmental method (PSM) was used in building the viaduct or the long stretch of suspension bridges resting on the concrete towers. The method is of European technology and is widely-used worldwide. The MRT Line 2 is a fully-automatic, driver-less system at par in terms of facilities and technology with those in other parts of the world. It is equipped with a closed-circuit television system that enables the railway operator to monitor activities of passengers and employees at the stations and inside the trains. Moreover, the MRT Line 2 is commuter friendly and has facilities especially designed for the elderly and the differently-abled.
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