MANILA - Allegations of overpricing and irregularity are threatening to delay the October 1 implementation of a Land Transportation Office (LTO) project seeking to install radio frequency identification (RFID) tags on every vehicle in the country.

At least two congressmen on Thursday said the RFID project was "inserted" into an LTO information technology project without the benefit of a public hearing or bidding.

Bayan Muna party-list Rep. Teodoro Casiño said he will request for a temporary restraining order that will halt the implementation of the RFID project scheduled on October 1. He said the P2.45 billion RFID project had all the makings of a "midnight deal" based on documents from the Department of Transportation and Communications and the LTO.

"This smells and looks like a midnight deal. This merits a congressional investigation...," he said in a radio dzMM interview.

Casiño said the two documents showed that RFID project was inserted as an "enhancement" of an existing LTO information technology project, which was undertaken by Stradcom Corporation under a build-operate-own (BOO) scheme. 

Agusan del Sur Rep. Rodolfo Plaza said the RFID's P350 price tag was too expensive compared to the P70-P80 price of regular RFIDs sold by several industry players. He also said the original LTO information technology contract with Stradcom Corporation did not make provisions for an RFID component.

"If you check the contract, [the RFID] is not there. These are, plain and simple, illegal charges. It's a form of legalized extortion," Plaza said in an ABS-CBN "TV Patrol World" report.

Under the project, all vehicles will be given stickers containing a microchip that stores vehicle information. The chip allows traffic enforcers to identify and know everything about a specific vehicle with the speed of electronic computing.

The LTO said motorists will pay a one-time tagging fee of P350 when they register their vehicles. The RFID tag is expected to last 10 years.

The Commission on Human Rights, however, raised questions about some of the data to be placed in the RFID which it said may infringe on a person's right to privacy.

"[This is] tantamount to surveillance without legal basis. Even suspects have right to privacy and security against search and seizure until exception is granted by way of warrant by court on showing of enough prima facie basis. There is risk of abuse or misuse. It should only be on a case-to-case basis [and] not sweeping and unlimited," CHR Chairwoman Leila de Lima said in a statement.

NTC: Stradcom not licensed to operate RFIDs

An official of the National Telecommunications Commission also pointed out that Stradcom does not have a permit to operate RFIDs in the country.

NTC Deputy Commissioner Douglas Michael Malilin said Stradcom has yet to apply for an import permit from the agency until now. He cited an NTC memorandum circular in 2006, which regulates the importation and operation of RFID systems in the country.

"Based on our regulations, all types of RFID should be registered with NTC including the reader. If the RFID's frequency or reader is outside the NTC approved frequency, it could cause interference," Malilin said.

A Malacañang spokesman, meanwhile, urged the LTO to conduct a thorough review of the project before implementing it.

"It would be proper to conduct a more thorough study on this and consultations, public hearings, before this would be implemented," deputy Presidential spokeswoman Lorelei Fajardo said in a press briefing.

In response, LTO chief Arturo Lomibao said the agency is willing to delay the project in order to conduct more public consultations on the matter.

"In the previous hearings in Cebu, this was endorsed by transport leaders in the Visayas and Mindanao. We are open and we can delay this if it is ordered by Transportation Secretary Leandro Mendoza and our beloved President Arroyo," he told ABS-CBN.

Lomibao said the DOTC approved the RFID project and awarded it to Stradcom since the original contract gave the company exclusive rights to implement IT projects in the LTO.

He denied, however, accusations that the project is meant to raise funds for his own congressional bid in the 2010 elections.

"That is a very malicious statement. All the revenues will be accrued to the government, to the LTO will be deposited to the national treasury. I don't see any personal interest in this particular project," he said.

RFID not a spy chip

Vince Dizon, Stradcom vice president for media and public relations, explained that the RFID is part of the company's original contract to handle all technological requirements of the LTO. He said the original contract was bidded out in 1997 and provided for complete exclusivity to more effectively manage the agency's IT system.

Dizon denied that the RFID tags are not included in the original contract. "The RFID is simply an enhancement. It's part and parcel of the system that we have right now," he said in an ANC interview.

He added that it was the DOTC that asked for an RFID component "to address specific problems in the transportation industry including colorum vehicles, carjacking and other crimes involving vehicles and other issues regarding registration."

He also denied that the tags are overpriced, pointing out that the RFIDs are made specifically by a technology provider in Sweden. He said the RFIDs are high-speed tags that can be read from a distance of up to 10 meters even if the vehicle is moving at 140 kph.

"The reason why it is more expensive is that it is a very specialized and very specifically configured tag to suit the requirements of the LTO," he said.

Of the P350 price tag, he said most will go to the cost of the project, 12 percent goes to value-added tax while a portion will go to the LTO for its IT training project.

He said Stradcom will earn an estimated P60 million from the project in five years.

Dizon also allayed fears that the RFID tags can be used to spy on vehicle owners or to track the whereabouts of the actual vehicle. "The tags do not have GPS [global positioning system] capability, which allows authorities to track the vehicle via satellite," he said.

He added that law enforcers can only determine if a vehicle is stolen or used in a crime if they download real-time information about the vehicle through a mobile reader.