Motorists told to brace for higher LTO fees

First the toll fees, next the interconnectivity fees.

Motorists will have to reach down deeper into their pockets to pay additional interconnectivity fees to technology company Stradcom in registering their motor vehicles with the Land Transportation Office (LTO).

Mr. Michael Rellosa, chairman of the Philippine Insurers and Reinsurers Association (PIRA), said Stradcom is demanding an additional P30 in their interconnectivity fees and insurance companies can no longer absorb the increase.

“The margins of insurance companies are very thin and we are sorry but we have no choice but to pass this P30 to our customers,” he said in a recent radio interview.

In its letter to PIRA, Stradcom said it is raising its interconnectivity fee from P50 to P80 due to the high cost of upgrading its hardware and software as well as the rise in the consumer price index.

Mr. Rellosa said the 85 member companies of PIRA overwhelmingly voted to oppose the increase. He said PIRA is even questioning the legality of Stradcom’s interconnectivity fees which are not part of the original Build-Operate-and-Own contract it signed with the government 10 years ago.

“The contract of Stradcom only allows it to collect fees from registration and licensing. But now it is collecting various interconnectivity fees from groups that want to connect to the LTO. That’s no longer part of the contract,” he said.

PIRA needs to connect to the LTO database to be able to match every Compulsory Third Party Liability (CTPL) insurance to each registered vehicle. PIRA does this to make sure that every CTPL policy is authentic and issued only once. It is a service the association gives to motorists for free.

Mr. Rellosa said Stradcom already earns some P350 million a year from the interconnectivity fees being paid by insurance companies. This figure, he said, would go up to P560 million if the fees are increased to P80.

Meanwhile, the newly appointed undersecretary for legal affairs of the Department of Transportation and Communication (DOTC) tasked to review multibillion contracts like the one with Stradcom allegedly has links with the technology firm, a lawmaker said.

Usec. Aristotle Batuhan, a lawyer who lost twice in his congressional bid in Cebu, allegedly lobbied for Stradcom during the hearings conducted by the House Committee on Good Governance, according to Cevite representative and Deputy Speaker Rep. Crispin Remulla.

Commenting in his radio program “Karambola,” Rep. Remulla said he last saw Batuhan lobbying in Congress with Stradcom vice president Mr. Vince Dizon during the hearings that looked into alleged anomalies committed by the private firm. The series of hearings was cut short due to lack of time.

But Ussec. Batuhan was quick to deny the allegation. In the same radio program, he clarified that he used to be part of a firm which lawyered not for Stradcom but for a company that wanted to computerize the 2010 presidential elections.

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