THE P3.14-billion Land Transportation Management System (LTMS) project of the Land Transportation Office (LTO) remains incomplete and not fully used due to several functionality issues, despite full payments for core applications and at least 15 contract extensions.
This was based on a 2022 Commission on Audit (CoA) report, according to the Department of Transportation (DoTr).
The DoTr said the foreign-made LTMS still lacks several functionalities needed in LTO's daily operations, including a payment feature.
It added that LTMS was developed by the Joint Venture Agreement (JVA) of a German technology firm, Dermalog, and its local partners. Holy Family Printing Corp., Microgenesis and Verzontal Builders Inc., after the project was awarded in May 2018 through competitive bidding.
The LTMS project has been repeatedly flagged by the CoA for three consecutive years due to delays.
In its latest report, the CoA stressed that the LTMS was not completely utilized despite full acceptance and payment due to some missing functions, processes and other implementation issues. The CoA added that the missing processes of the LTMS were deemed necessary by the users of the system, citing, for example, the absentee and overseas Filipino workers (OFW) driver's license renewal under the Driver's Licensing System (DLS).
In addition, the new or initial registration of motor vehicles under the Motor Vehicle Inspection and Registration System (MVIRS) module of the LTMS remains dysfunctional.
Thus, the CoA revealed that some LTO sites still use the current LTO-IT system developed by LTO's long-time IT partner, Stradcom.
The LTO issued a memorandum dated Sept. 27, 2023, directing all LTO sites to utilize both the LTMS and LTO-IT systems in their transactions until Oct. 31, 2023. This is to ensure the uninterruptable delivery of efficient public service to all clients. LTO noted that essential requirements are still needed for the LTMS to fully adhere to existing LTO policies and adequately meet the requirements of its frontline services.
Undue payment
Despite LTMS' missing functionalities, state auditors observed that the LTO made an undue payment to Dermalog for the maintenance of core applications for the period of October 2019 to October 2020, even though the first acceptance of core applications was only made in December 2020.
As of Dec. 31, 2022, the LTO has paid a total of P385.6 million for the maintenance of core applications, data center and generator set, which fall under Component B of the project.
In its report, CoA said that if the problems concerning the LTMS continue to persist, the project will be considered a waste of government funds, and the full payment for all core applications and two-year maintenance may be disallowed.
In previous media interviews, Dermalog representatives claimed that issues in the full implementation of the LTMS were due to the delays in Stradcom's turnover of the legacy database. House Committee on Transportation Chairman and Antipolo 2nd District Rep. Romeo Acop, during a committee hearing in February 2023, already directed Stradcom to submit the LTO-IT database to the LTO.
Meanwhile, Stradcom confirmed that it made its 10th database turnover to the LTO last June 21, 2023. The database contained over 333 million historical transaction records from the start of LTO-IT's operations until Dec. 31, 2022. The IT firm said the action is a manifestation of its commitment to continue working with the government to provide quality public service.
Senate hearing
Earlier, the Senate blue ribbon committee conducted its initial inquiry on the CoA-related issues concerning the LTMS, which stemmed from the separate resolutions filed by Senate Minority leader Sen. Aquilino "Koko" Pimentel and Sen. Imee Marcos. Dermalog officials were absent during the hearing.
In the hearing, Verzontal Builders Inc., one of the local JVA partners of Dermalog, revealed that it has a pending petition with the Court of Appeals to uphold the warrants of arrest released by a Quezon City Regional Trial Court Branch 224 against four Dermalog officials in line with an estafa case filed against them in September 2021. Verzontal alleged they did not receive the full payment from Dermalog despite fulfilling their obligations under the JVA.
The Senate committee subpoenaed Dermalog officials, representatives of Holy Family Printing Corp., Microgenesis, and former LTO key personnel to attend the next hearing, which has yet to be scheduled.
Meanwhile, the criminal complaint filed by one of the Joint Venture partners, Verzontal Builders, against Dermalog, Holy Family Printing and Microgenesis is still pending in the Court of Appeals.