> Merit seems to be totally non existent.

I think that's a bit of an exaggerated extrapolation of your observation based on already treated data. Family backgrounds surely plays a definitive role but not in a way that affects merit, especially for engineering schools. The exams are tough and only the best succeed (ie merit). It's how one gets to be the best that's the problem, as mentioned above, the right family background will give you the right environment to succeed. However even if given that, you still suck at maths, no one will help you.

Family legacy is not an admission criteria, unlike some other countries. For those top schools, selection committees look at your grades at the exam and that's it. No need for weird ever lasting list of extracurriculars, or to know who your father is, or how much money they can donate.