The way things are shaping up, it looks like the Land Transportation Office (LTO) would finally manage to free itself from the outrageous iron grip of Stradcom Corp. If the LTO does succeed in doing this, and chances are very good that it will, the credit would go to no other than that agency’s diminutive (but unflappable) lady chief, Virgie Torres.

Torres had been handpicked by President Aquino for the messy job of cleaning up the agency, and it seems she was not a bad choice at all. She had earlier served the LTO for 32 years in various capacities; and so she at once knew that at the very root of all the agency’s current problems was the all-pervasive presence of Stradcom Corp., headed by Cezar Quiambao.

Stradcom first came into the picture in 2002 when the LTO embarked on the computerization of its driver’s licensing and motor-vehicle registration functions. A 10-year contract to provide these IT services for LTO was all that Quiambao, or Stradcom, needed. From that time on, it was easy sailing for Quiambao’s Stradcom.

Since the contract formally went into effect in 2002 (even that starting date has become questionable), the LTO has paid Stradcom exactly P9, 713, 000, 000 for performing these two basic functions alone! This is what is shown by the records, Torres said during a press conference on Tuesday.

Since then, the contract terms seemed to be freely changing with, of course, the approval of whoever was LTO chief at any given time. Such amendments enabled Stradcom to progressively broaden its presence in the LTO. Its revenues soared from about P1 billion a year to roughly P1.3 billion on the average for the last three years.

When asked by an investigating panel of the Department of Justice how much, more or less, Stradcom has raked in from the LTO, Torres gave a tentative figure of “not less than P12 billion” until the LTO took control of the agency’s data base recently.

Such additional functions meant additional income for Stradcom in the hundreds of millions. These extras included direct control over private emission-testing centers (PETCs), which Stradcom collects directly from the PETCs. From this function alone, Quiambao’s Stradcom amassed P1.23 billion in only three years!

The handling of insurance uploads of certificates of cover (COCs) was another additional revenue center. The Stradcom earned a total of P950 million from this in only three years. There are other little charges that, when you add them all up, comes to hundreds of millions. A friend of mine complains that to change an entry in your driver’s license, the Stradcom would not do it unless you pay P100, which an encoder could do with one punch at the keyboard.

(In 2009 Stradcom even won LTO approval to collect in advance from each motor-vehicle owner in the country a 10-year fee for the mandatory inclusion of each one into a so-called Radio Frequency Identification [RFID] scheme. The LTO had actually started collecting the RFID fee for a few weeks. Fortunately, a court found it highly irregular and stopped its implementation. It also ordered the LTO to give back the money to vehicle registrants.

(To this day, incidentally, Quiambao’s Stradcom has refused to cough up the P28.89 million to cover the court-ordered refund, according to Virgie Torres.)

The money just kept rolling in through the years and Quiambao seemed to have it all made to his liking. All he needed to do was to make sure the LTO would be perpetually in his control. That means keeping whoever was in charge happy in the most traditional ways.

But it seems he was apparently caught flatfooted when a rival faction in Stradcom emerged to claim that it was the rightful controlling interest in the company. And Quiambao, if I may add, seemed totally at a loss on how he would deal with the likes of Torres and—most of all—Transportation Secretary Jose “Ping” de Jesus (whose impressive public-service record remains untainted).

It came as no surprise that, with more than a billion pesos in yearly revenues from the LTO at stake, a group claiming to be the real controlling shareholders of Stradcom, headed by Bonifacio Sumbilla, had surfaced to try to dislodge Quiambao’s control over the “money machine” that Quiambao’s Stradcom had set up in the LTO.

This is what, in effect, Virgie Torres told the DOJ probe panel. “What I know is this: Two opposing groups of businessmen are fighting over control of Stradcom, the sole IT-service provider of LTO. They are fighting over control over a multibillion-peso company that has a monopoly over LTO’s IT services for the past 12 years.”

Here, the LTO chief’s statement begs the question, “Isn’t Stradcom’s contract only for 10 years?” She probably meant the actual start of Stradcom’s operations was in 2000 or 1999, but its effectivity was somehow—by hocus pocus (?)—moved to 2002. The battle for control of Stradcom came to a boil on December 9 when the Sumbilla group tried to physically take over the Stradcom computer facilities at the LTO. The attempt, of course, became the top news the following day. But the disputants subsequently found themselves arguing their respective sides in a civil court.

The public would be relieved to know that since then, the control of the data-base has been taken over by the LTO. The LTO’s move was validated by a ruling made by the Office of the Solicitor General, that, “since it is unclear as to which group has the authority and control over Stradcom…it would be more prudent for the LTO to continue the same pending the resolution of the dispute within Stradcom.”

In my opinion, the December 9 incident was a crucial turning point for Quiambao’s Stradcom. Quiambao’s group even charged that Torres had taken the side of Sumbillo and that she had conspired with that group in trying to dislodge Quiambao’s men from the LTO premises.

Torres, however, easily disproved this. But since then, her office has uncovered several contract violations that Stradcom had committed all these years. Such violations, she said, are sufficient grounds for its abrogation.

One of her major findings is that Stradcom, in all the years it has operating at the LTO, had never set up a Business Continuity System (or simply a backup system) “that should have automatically kicked in when the Stradcom facility (on December 9 failed….”

No such system was ever set up by Stradcom as provided for in its contract. She said: “In case of disasters like Ondoy, a fire, or earthquake, the entire database of LTO would be lost forever!”

Will Quiambao’s Stradcom or Sumbillo’s Stradcom, once their dispute is resolved, ever regain the “paradise” lost at the LTO?

I doubt it very much. Apart from the major contractual violations it committed during the life of its contract, there is also that pesky issue of when that contract actually expire. Was it not two years ago?

Quiambao must be banging his head against the wall for not pacifying the Sumbillo group before it was too late.

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