LTO license plate supplier to set up PH facilities

Gerard Lim
LTO license plate supplier to set up PH facilities
Transportation Undersecretary Jose Perpetuo Lotilla says supplier PPI-JKG is required to set up local facilities to speed up the manufacturing of the new license plates

MANILA, Philippines – To cut down the months-long waiting period for new motor vehicle license plates, the supplier tapped by the Land Transportation Office (LTO) will set up manufacturing facilities in the Philippines, a transportation official said. 

All 15.2 million plates for motor vehicles and motorcycles are currently manufactured in the Netherlands and then delivered to the Philippines – a setup criticized as one of the reasons behind the long delays in the procurement and release of the plates.  

During a meeting of the House committee on Metro Manila Development on Tuesday, July 14, Transportation Undersecretary Jose Perpetuo Lotilla told lawmakers that the terms of the P3.8-billion ($85.02 million) contract also require the winning supplier to set up local facilities to speed up the process.

The joint venture of Power Plates Development Concepts Incorporated and Dutch firm J. Knieriem BV-Goes (PPI-JKG) won the contract for the supply and delivery of the new license plates in July 2013.

Lotilla also explained that the LTO and the Department of Transportation and Communication (DOTC) decided to import the new plates because there were no local facilities to manufacture plates that follow internationally accepted standards.

The DOTC earlier said that the new and standardized plate numbers would bear security features, as well as a bar code containing vehicle details, like the chassis number and the date of registry.

“Since there are no facilities for the manufacturing of these plates in the Philippines, we are importing them. But there’s an undertaking on the part of the contractor to set up Philippine facilities,” Lotilla said.

Setting up local facilities would mean providing jobs for Filipino laborers, lowering the cost of production, and speeding up the manufacturing and delivery process, Lotilla added.

“Our concern is to ensure that continuity of public service and timeframe with which the delivery should take place should be manageable. It won’t be manageable if [manufacturing is done from far away],” Lotilla said.

He added, “That’s why the terms require that as [the supplier] begins the contract, they will set up Philippine manufacturing facilities precisely to address the risks associated with delivery.”

How many plates?

Asked how many license plates have been delivered since the contract was finalized, representatives from the LTO and PPI-JKG could not give lawmakers the exact figures.

LTO administrative division chief Maribel Salazar only said that 73.92% of the plates the LTO requested from the supplier from January to June 2015 have been delivered.

Quezon City Representative Winston Castelo, the committee chair, ordered the LTO to provide the committee with a schedule of delivery to determine the “gravity” of the problem.

“The LTO said the supplier is remiss so that’s why we’re trying to get the delivery schedule and how many are actually delivered,” Castelo said.

Meanwhile, ABAKADA party-list representative Jonathan Dela Cruz asked the committee to probe other contracts associated with the LTO license plate deal after finding out that there was a separate contract for the delivery of plates to provinces in the Philippines.

Freight forwarding service Front Cargo won the contract to deliver the license plates nationwide, according to Salazar, but she was unable to tell lawmakers how much the deal was worth.

In recent months, the LTO has been summoned to the House of Representatives and the Senate to explain its license plate standardization program and its “No Registration, No Travel” policy.

The LTO has gotten flak not only for the added cost to motorists, but also for the delays in issuing the new plates.

The agency has also come under scrutiny for alleged irregularities in the bidding process for the license plate deal.

The Commission on Audit (COA) has ordered the LTO to stop paying the producers of the new license plates, pending its investigation into the contract. –

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