More than meets the eye

Just recently, the Department of Transportation said that it will impose sanctions against the private contractor that was able to bag the lucrative P3.6-billion contract covering the supply of vehicle license plates which was awarded in 2013.

According to Transportation Secretary Art Tugade, the Land Transportation Office is currently computing the penalties that should be imposed on Power Plates Development Concepts Inc. and J. Knieriem BV Power Plates (PPI-JKG) for its late deliveries.

Based on the contract, PPI-JKG is supposed to supply 15 million new plates within a five-year period. But only four million had been distributed so far.

Despite the delayed deliveries, Tugade said that the contract with PPI-KPG under the Motor Vehicle License Plate Standardization Program will remain, as he emphasized that there is no legal basis to cancel the contract.

It now appears that Tugade and LTO chief Edgar Galvante are in fact trying to defend this contractor, to the point of downplaying the faults of PPI-KPG.

Negros Oriental Rep. Arnolfo Teves Jr. earlier said that he will file a resolution so that Congress can look into DOTr’s decision to reconsider this alleged anomalous contract.

Teves pointed out that aside from the company’s alleged violation of the Government Procurement Act (Republic Act 9184), the car plate supplier has violated critical provisions of its multi-billion contract, including subcontracting the work that has resulted in the delivery of substandard products.

It will be recalled that about 700,000 license plates arrived at the Manila International Container Port in 2015 but PPI-JKG refused to pay P40 million in taxes and duties. The plates were then donated by the customs bureau to the LTO.

The Commission on Audit has also said in 2015 that the contract is in violation of procurement laws. It said that PPI-JKG failed to submit their tax clearance, latest income and business tax returns, among other documents required for government contracts.

LTO in a memorandum circular (2014-1895) required operator and owners of four-wheeled motor vehicles renewing their registration to apply for the replacement of old license plates, at a cost of P450, with the new standardized LTO-approved plates last January 2015. But the COA disallowed the extra fee in December 2015.

It was only early this year when the Supreme Court lifted the temporary restraining order which prevented the release of the 700,000 plates. This was after the High Court dismissed the petition filed by some members of Congress who questioned the legality of BOC’s move to donate the plates to LTO. They cited COA’s disallowance on the MVLPSP.

The MVLPSP was to be implemented from July 2013 to June 2018.

Tugade and Galvante have announced that they have met recently with the suppliers of the license plates and they are now conducting discussions to ensure that plates from as far back as 2013 will be distributed to registered owners.

Yes, the Supreme Court lifted the TRO and the COA removed the disallowance. But this only covers the P487 million that was advanced by the Aquino administration to PPI-JKG. It does not cover issues like sub-standard plates (thin plates and faded color) and the fact that the work was subcontracted to India.

Tugade has even announced that DOTr and LTO are now capable of producing the plates and that the machines are already in the LTO compound in Diliman. So how come they still want to resume talks with the previous erring contractors?

To justify the government’s deal with the previous supplier, we can expect Tugade and Galvante to defend their act in honoring the deal as the best and quickest way to resolve the supply problem of vehicle license plates.

Already, LTO executive director Romeo Vera Cruz has said that the resumption of PPI-JKG’s contract will address the backlog from 2013 to 2018 and beyond. The total backlog of plates for motor vehicles from July 2016 to March 2018 has reached 3.8 million and 5.2 million for motorcycles, according to news reports.

He added that discussions regarding amendments to the contract  are being finalized, subject to the approval of the DOTr, even as he said that PPI-JKG still has to deliver about 11 million plates.

If the two officials are looking for a legal basis to cancel the contract, RA 9184 itself provides that when the delay in deliveries already reaches more than 10% of total contract quantity, this is a ground for the automatic termination of the contract.

The bid data sheet also says that subcontracting is now allowed. But no less than the LTO has admitted that the work was subcontracted to India and China makers.

The late Senator Miriam Defensor questioned the fact that while the specifications called for a thickness of one millimeter, the contractor only used 0.008 mm.

Then aside from the fact that the color red on government plates easily fade, the barcode does not work and is not machine readable.

LTO has already inaugurated its plate-making plant last April while the contract for the procurement of 775,000 pairs of motor vehicle plates and 1.7 million pieces of motorcycle plates to address the plate requirements from July 1, 2016 to Dec. 31, 2017 has already been awarded to Trojan Computer Forms Manufacturing Corporation and JH Tonnjes E.A.S.T. GmbH Joint Venture.

The new plant can produce 22,400 pieces of motor vehicle plates per day on a two-shift, eight hour per shift schedule. The automated embossing machine which is part of the contract can produce 11,200 plates per day on a two-shift schedule.

PPI-JKG has already caused so much problems. Merely imposing penalties for delays on their deliveries will not solve the problem. Tugade is even toying with the idea of just asking them to deliver blank plates. If they were not able to deliver on time high-quality plates which motorists are actually paying for, how can DOTr and LTO expect them to change their ways? They are not the only suppliers. Maybe, our government should simply cancel the contract and then bid it out again. PPI-JKG does not deserve the contract. And then of course, those government officials who were responsible for giving the contract to them on a silver platter deserve to go to jail.

For comments, e-mail at [email protected]