The German firm that supervises and manages the online platform of the Land Transportation Office (LTO) is seeking a P24.8 million contract renewal for the maintenance of its digitalization project currently being used for application and renewal of motor vehicle registration and driver’s license.
Based on the letter forwarded to the Department of Transportation (DOTr) by the Dermalog, the contract renewal for the maintenance of the Land Transportation Management System (LTMS), the digital platform of the LTO is for five months—from October 11, 2024 to March 11 next year.
It stated that the contract renewal is urgent in order to “ensure the continuous operation of the LTMS system” and “continue maintaining the data center and to keep the hardware for the LTMS running.”
The request for contract renewal came amid calls from some lawmakers to cancel the payment obligation of the national government to the Joint Venture Agreement (JVA) it signed with Dermalog in 2018 due to alleged contract violations—citing reports from the Commission on Audit—and other issues that include national security.
According to a 2023 COA report, Dermalog JV failed to provide the required three redundant internet connections, opting instead for a single connection.
This lack of redundancy left the LTMS vulnerable to service disruptions, such as the Oct. 30 nationwide outage due to internet fiber cut, which brought LTO transactions to a halt and resulted in huge revenue losses.
Currently, there is a pending petition before the Supreme Court for the cancellation of the contract.
Since October last year, the LTO has been seeking the full takeover of LTMS, saying the agency’s IT experts can supervise and manage the online platform which would lead not only to an efficient digital system but also to the national government saving millions of pesos in maintenance fees.