A public transport group on Sunday urged Congress and the Senate to investigate German contractor Dermalog allegedly involved in controversies that repeatedly disrupted operations of the Land Transportation Office (LTO), notably delays in the issuance of driver’s licenses and renewals of vehicle registration.
Meanwhile, a highly placed source at the LTO said their chief, Jose Art Tugade was already looking into the issue, adding that “definitely there would be sanctions against Dermalog, including the possible scrapping of the Dermalog contract.”
The National Public Transport Coalition (NPTC) charged that after 14 extensions and two-and-half years delay, Dermalog has yet to deliver in full the Land Transportation Management System (LTMS) despite substantial payments already made by the LTO, amounting to 80 percent of the P3.4-billion contract.
NPTC president Ariel Lim claimed that Dermalog’s non-compliance with its contract has resulted in delays in the processing of driver’s licenses and motor vehicle registrations, as well as LTO other services.
Lim asserted that the irregularities “breed more corruption and opens the door for the seamless registration of colorum public transport and even carnapped vehicles.”
“Actually, we have already requested the Senate and the House of Representatives to look into the failure of Dermalog to deliver the complete system because it is the cause of the recurring glitches in the LTO system. The Dermalog’s LTMS is a complete failure, and was so disadvantageous to the government,” Lim said. Rio N. Araja
“LTO’s processes are being adjusted to accommodate the functionalities of the new system. These adjustments show the contractor’s (Dermalog) lack of detailed study before developing the new system,” he added.
The agreed six-month delivery timeline of the IT system was obviously not met, adding that “more than four years since the December 2018 delivery date, the system is still not fully functional and fully rolled out, the NPTC leader said.
“Can the contractor explain the basis for developing the new system and why at this point, the LTO has not yet been able to use the system it bought?” Lim asked.
Tugade, who was appointed in November 2022, merely inherited the problem from his predecessor.
The LTMS was a P3.4 billion project awarded to Dermalog and its local partners in 2018 under a joint venture agreement (JVA) to digitize LTO transactions.
Lim also noted that Commission on Audit (COA), in its 2021 audit report, flagged LTO’s questionable payment of P3.15 billion to the Dermalog and its partners for its new online licensing and
registration portal despite a number of defects that generated massive delays and disruption in the system.
Senate Minority Leader Aquilino Pimentel III earlier filed a resolution seeking an investigation on the alleged illegal payment made by LTO to Dermalog Identification System, Holy Family
Printing Corp., Microgenesis and Verzontal Builders despite the “incomplete turnover of deliverables.” This was “in clear violation of the procurement and auditing rules and to the disadvantage and detriment of our government and country as a whole,” Pimentel noted.
Lim pointed out that despite the clear violations, no penalties or sanctions were imposed by the LTO or the Department of Transportation against the Dermalog joint venture.
“At the very least, the LTO should have suspended the implementation of the LTMS,” he added.