House committee uncovers anomalies in Dermalog joint venture

The House Committee on Transportation has accused Dermalog, the foreign IT provider for the Land Transportation Office (LTO), of deceiving the government and its joint venture (JV) partners in the P3.14 billion Land Transportation Management System (LTMS) project. This accusation was made during a committee hearing chaired by Antipolo City 2nd District Rep. Romeo Acop.

Local construction firm Verzontal Builders Inc. claimed during the hearing that Dermalog had not fully paid them for the electrical, mechanical, and civil works they completed, including a data center at the LTO’s main compound in Quezon City. Verzontal Director Jose Natividad expressed that Dermalog still owes them about P165 million and revealed that despite attempts at settlement, they were only offered P1 million.

Natividad also alleged that Verzontal was illegally removed from the JV, and former LTO officials showed bias towards Dermalog. Verzontal’s legal counsel, lawyer Ricardo Gao Pronove III, reported sending complaints to the Department of Transportation (DOTr) and the LTO. Despite attempts at meetings, they were accused of bullying Dermalog, who eventually excluded Verzontal from the JV.

Verzontal is now considering legal action against former LTO officials and JV members, including Dermalog, Microgenesis, and Holy Family Printing Corp. They are awaiting a Quezon City Court decision on a petition to terminate the LTO’s contract with Dermalog.

Dermalog’s legal counsel, lawyer Anthony Peralta, denied the allegations, stating that Dermalog had paid over P219 million to Verzontal and that Verzontal voluntarily left the JV in April 2019.

Although in June 2022, the Quezon City Regional Trial Court ordered the arrest of four Dermalog executives for qualified theft based on a case filed by Verzontal, the decision was overturned by the Department of Justice in July 2022. The transportation committee has summoned former LTO officials and JV representatives to its next hearing to address issues related to the LTMS contract and the Dermalog JV.

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