LTO computerization project to issue IT-bonds

Stradcom Corp. has filed a registration statement with the Securities and Exchange Commission (SEC) seeking approval for the issuance of up to P1.2 billion in information technology (IT)-bonds to mature in five years and one day.

Proceeds of the IT-bonds will be used to finance a portion of the P3.4-billion Land Transportation Office-Information Technology (LTO-IT) Project.

Hailed by President Arroyo as the model for computerizing government operations, the LTO-IT Project is aimed at streamlining and optimizing efficiency in the processing of drivers’ licenses and motor vehicle registrations.

The LTO processes approximately 12 million transactions annually. Full computerization of the LTO operations is expected by the middle of this year, leading to the provision of a nationwide electronic link to enhance the exchange of information among various government agencies.

Stradcom Corp. is the project company of the consortium that won the contract for the LTO-IT Project in a public bidding held in 1997. This project is the first successful build-own-operate (BOO) project under the Philippine BOT law. Under the BOO scheme, Stradcom will put up 100 percent of the project cost and no cash out from the government. Stradcom will finance, construct, own and operate and maintain the LTO-IT infrastructure for 10 years. The company will recover its investment by charging computer fees for the use of the IT facilities.

The major investors of Stradcom are United Information Technologies, Inc. (UNITE); the holding company of the original sponsors – Strategic Alliance Development Corp. (STRADEC); International Finance Corp. (IFC), the investment arm of the World Bank Group; and ePLDT, Inc., the IT subsidiary of telecommunications giant Philippine Long Distance Telephone Co. (PLDT).

The Stradcom stockholders have already infused about P1.5 billion into the company. Aside from equity infusion, IFC also committed $12 million in additional long-term financing to the project. The P1.2 billion will complete the funding package for the project.

Financial institutions that are considering participation in the IT Bond issue have expressed satisfaction at the nearly completed status of the LTO-IT project and the realization by Stradcom of significant revenues from the collection of computer fees from the district offices within the National Capital Region (NCR).

Some representatives of these financial institutions strongly feel that the LTO-IT project should be fully supported by the financial community as its success will serve as a model for the other government agencies to computerize, streamline its operations and eliminate graft and corruption.