Rant. Reason and the RFID

A few rant that the device is draconian, designed to track and trail enemies of the state and instill fear under virtual martial rule. Less paranoid, others rage at an imagined money-making enterprise timed to augment coffers for fledgling candidates. Others still, senatorial aspirants included, go beyond the verbiage of a recent court decision and are demanding agencies cough up what had been paid for the program, inflating beyond reason and rationality the limits of interim intent.

Where incredulity reigns, it is easy enough to conjure conspiracies. Perhaps it is time for fairness and reason. On the radio frequency identification device (RFID) proposed by the Land Transportation Office (LTO)there has been a profusion of misconceptions and reverberating political undertones, screaming and spewing spit and bull on the gutter of arguments hurled against – should assumptions of regularity prevail – good intentions and legitimate objectives.

Far from Orwellian and not quite Huxley’s Brave New World, modern economies use RFID applications for traffic management, route and toll controls and payment systems. Privacy remains in effect. Where the RFID data is non-intrusive and available under different media, the system is not invasive, and instead, provides validations that protect the public from identity theft.

On Wikipedia, RFID systems are used in transport systems “throughout Europe, and in particular in Paris, Lyon, Bordeaux, Grenoble, Nancy and Marseilles in France, in the whole of the Portuguese highway system and in many Portuguese public car parks, Milan, Turin, Naples and Florence in Italy, and Brussels in Belgium.”

Curiously, once sober, recognizing the need to place money where mouths have been, those raising political specters avoided their own ghosts. Their petition boils down to legally questioning bidding protocols.

These involve the award of the RFID program to the LTO’s information technology (IT) provider, Stradcom Corporation, chaired by former finance secretary Roberto de Ocampo. It alleges the absence of public biddings and legislation. Never mind that Stradcom’s 2003 contractual commitment is comprehensive, encompassing expanded field-level uses of IT systems including validating data capture and storage and electronic curbside public utility route-management which the RFID provides.

When the courts issued a temporary status quo ante, it did not declare a rejection nor did it reverse the validity of the comprehensive contract between the company and the LTO that the Commission on Audit COA) en banc declared advantageous under COA 2005-001. To demand such foments misinterpretations.

Amid ranting and raving, caught in impassioned unreason, Stradcom is left in a bind. Its contract is Build, Operate and Own (BOO) necessitating full private capitalization thus relieving the LTO of all IT infrastructure costs. Confronted with RFID’s capital expenditure (CAPEX) requisite of Php 4.028 billion – partly Php 3.9 billion for the IT system and partly Php 203 million for upgrades – Stradcom’s BOO commitment prevents burdening these on the government.

Never mind that a substantial portion of LTO’s monthly operating expenses, or as much as Php 2.6 million in utilities and Php 2 million in ink, is shouldered by the IT contractor. Never mind still that RFID’s prospective inflows, estimated between Php 1.6 billion to Php 2.5 billion on five million vehicles, hardly comes close to the over Php 4 billion CAPEX carried by Stradcom.

Moreover, per National Economic Development Authority (NEDA) benchmarks, rates of return are capped between 20% to 25%. Stradcom’s SGV-audited returns are at 5% – far too-modest by investment standards.

Stradcom’s shareholders include Metropolitan Bank and Trust Co., Republic Glass Holdings Inc., PentaCapital Management Corp. and the Philippine Veterans Bank. The majority is held by Stradcom International Holdings Incorporated., a subsidiary of United Information Technologies Inc. Where shareholders are reputable listed companies, effectively 20% of capital structure is in the public domain.

Returns on equity recorded by dividend performance measured 9.1% – still well within the NEDA cap further debunking the misconception Stradcom profiteers off the LTO.

Moreover, when Stradcom was awarded its 2003 contract, it bid Php 6.036 billion lower than the next bidder, AMPI-Fujitsu. Efficiency improvements from reduced processing times to expedient data management have since borne out advantages attributed to the IT contractor.

Innuendos arrayed against the RFID spawn from a broadside mistrust of the political hierarchy and the bellyaches of abusive public utility drivers. Stradcom relieves government of capital costs and some of its operational expense. The incremental cost argument is cliché and classic fodder for opposing increased fuel and spare parts prices and fines for traffic violations.

It is unfortunate that the Arroyo government, through successive episodes of betrayals of the public trust, has virtually lost the moral authority to govern. After the 2004 election scandal, through the North Rail fiasco, the national broadband controversy and the brazen attempt to dismember the country through the Memorandum of Agreement on Ancestral Domain, the government has consistently shown it cannot be trusted. On the RFID issue, that the baby is thrown out with the bathwater is understandable.

Until we can trust government more, that is unfortunate for the increasing number of carnapping victims and anyone victimized by homicidal and psychopathic public utility drivers whether registered or not. Against real and imagined fears, the dispassionate corporate data should debunk paranoid fantasies and political agenda.

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