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Automation in peril as poll partners break up

June 29, 2009 7:01pm

Total Information Management Corp. (TIM) has pulled out of its partnership with Smartmatic Corp., putting the P11.3-billion poll automation project next year in jeopardy.

“Mr. Jose Antunez (President of TIM) came to my office and told me they are withdrawing from the project citing their irreconcilable differences (with Smartmatic)," Elections Chairman Jose Melo told reporters, without mentioning the nature of the feud.

But word has leaked that the breakup was caused by corporate issues between Smartmatic and TIM ranging from the chairmanship of the board to funding disputes.

Earlier in the day, Melo suspended the contract negotiations with Smartmatic-TIM due to its failure to submit its joint venture incorporation papers. “Kapag wala pa (If they will fail to submit it) by Friday we may call off the whole thing because it would be too late."

With the Smartmatic-TIM breakup, Melo said this will leave the Comelec with the following options:

1. A second bidding
2. A negotiated contract
3. Partial automation
4. Revert to manual elections

Cesar Flores, Smartmatic’s international sales director and spokesman, blamed their partner TIM for the delay, saying Smartmatic officers signed the incorporation registration papers last week.

Watch video of Winnie Monsod's analysis on poll automation

“The update is that we are still in the process [of submitting the incorporation papers], Smartmatic has signed all the documents and we are waiting for our partners to do their part so we can move. I don’t think there is a problem, there is a delay…. we are waiting for the final submission of the incorporation," Flores told reporters in a separate interview.

According to the law, the Netherlands-based firm Smartmatic cannot operate without a local joint venture partner, TIM in this case.

Smartmatic spokesman Flores admitted in a separate interview that they were taken aback by the action of TIM, saying “we were partners an hour ago."

Flores said for the “last two weeks, Smartmatic and TIM have been working together with Comelec in the contract negotiations and preparing all the necessary documents to file the incorporation of the joint venture to the SEC."

“Smartmatic would like to manifest to Comelec and the people of the Philippines that it is ready to incorporate and has signed all the necessary documents to proceed with the registration and funding of its 40 per cent share [in the joint venture]. Smartmatic is just waiting for the funding and signing of our Filipino partner, in order to move the contract and receive the notice to proceed with this landmark project," said Flores.

TIM representatives could not be reached for comment.

Smartmatic-TIM backgrounder

Smartmatic International Corp. (Smartmatic) is a wholly-owned subsidiary of Smartmatic International Holding, BV, a company organized under the laws of The Netherlands. Smartmatic has organized elections using its electronic voting solutions in Latin America, the Carribean, the United States, and Asia.

Total Information Management Corporation (TIM) is a domestic corporation registered with the Securities and Exchange Commission in 1981. The corporation is engaged in the business of information technology and service provider.


Melo said the Comelec will file cases against TIM. “We will do everything to sanction them," Melo said. “We will see to it that they will be criminally liable… Hindi naman pwede yung nakipag-bidding ka tapos ’pag nanalo ka magwi-withdraw ka. Constitutional body tayo tapos pinaglalaruan tayo."

A visibly upset Melo said the Comelec is set to look into the names behind TIM to see if these people may have been influenced by groups who are against automated elections.

Melo said that though they have enough time to prepare for manual voting and counting, the main goal of eradicating poll fraud will be difficult to achieve if the elections are not automated.

“It’s a disappointment (because) we are ready for automation. Our people are expecting automation para mawala ang dayaan. Kapag nag fallback tayo sa manual nandyan naman mga operators, open na naman sa kalokohan (If we return to manual polls, the operators will thrive once again and we become vulnerable to cheating)," Melo said.

For joint venture partnerships, the law allows foreigners to bid for projects provided they have local partners representing 60 per cent of the project.

The bidding rules also prohibit Smartmatic from getting a replacement local partner to push through with the P11.3 billion poll automation.

The poll chief said it is frustrating to know that TIM is seemingly putting “personal interests" ahead of a matter of national importance.

“I told them that the elections must push through. If you withdraw, wala na. You are putting your private interest above that of the national interest," he opined.

With TIM’s withdrawal, Melo assured that the Comelec would not allow the firm to walk away easily.

Comelec director Ferdinand Rafanan, head of the Special Bids and Awards Committee, said TIM could be charged criminally, civil and administratively.

He added that they are similarly forfeiting the P350 million performance security bond posted by TIM and the group will also be barred for one year from joining any bidding of the Comelec. - With a report from Amita Legaspi, GMANews.TV
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