Raps eyed vs German firm over P3 billion LTMS project

MANILA, Philippines — The internal dispute among the contractors of the Land Transportation Office’s P3.14-billion Land Transportation Management System (LTMS) project persists as the Filipino construction company, Verzontal Builders Inc., is considering filing another civil complaint against German information technology firm Dermalog due to payment issues.

Verzontal’s lawyer Ricardo Gao Pronove III said the company would exhaust all legal options against Dermalog amid the recent Court of Appeals decision dismissing its petition due to technicalities.

“We don’t want to partner with them anymore because they are conducting (it) illegally. They are violating the contract,” Pronove said.

He said Verzontal’s appeal stemmed from the Department of Justice’s instruction to reverse the decision of a Quezon City court in June 2022, which ordered the arrest of four Dermalog executives who were charged with qualified theft.

Verzontal alleged that Dermalog failed to pay the company its 25 percent share despite completing the civil, mechanical and electrical works needed for the LTMS project.

Verzontal also claimed it was made to believe that the electromechanical works only amounted to P278 million when it was indicated in the contract that it totaled P390 million.

According to Pronove, the new civil case will be based on Dermalog’s alleged failure to pay Verzontal fully for the construction of the LTO’s IT center.

He added that Dermalog removed Verzontal from the joint venture agreement without its consent.

According to Pronove, without Verzontal, the LTMS contract would be deemed invalid since the Net Financial Contracting Capacity requirement for a publicly bidded government project was with the Filipino construction firm.

Pronove noted that during a recent Senate hearing, Minority Leader Aquilino Pimentel described the agreement with Dermalog as a “sub-contracting arrangement.”

Pimentel has urged other senators to review the Procurement Law to compel joint venture agreements to register with the Securities and Exchange Commission before bidding for a government project to avoid irregularities.