DMT’s delayed e-motoring project now hits legal snag

Department of Motor Traffic (DMT) plans to initiate a project called ‘e-motoring’ which, critics point out, would lead to large-scale frauds when implementing it.
Pic by Waruna Wanniarachchi

This is a copy of a document related to the controversial E-Motoring project, that has been planned by the Department of Motor Traffic 

• The DMT planned to establish an E-Motoring project which was shelved, but there are fresh plans to launch in a controversial manner 
• The estimated cost produced a figure of Rs 700 million
• Additionally the DMT has not carried out procurement process of this project in a proper manner 
• The company overseeing the project has not prepared a proper software system 

“I’m investigating the reason behind the delay in the e-motoring project. The cause of the delay in the project is not the lack of fees and the unavailability of a location. I don’t have the necessary information yet”
- Ranjith Rubasinghe Secretary Ministry of Transport 

“There is no delay in creating the software. The reason for the delay in the project is the absence of a suitable location. The development of the software is currently underway. We are not behind schedule”
-Gayan Samaraweera Representative Mercantile Advance Technology (PVT) Ltd

“Due to the lack of a suitable location the initiation of the e- motoring project faced delays. However the project has recommenced and a request for a price increase has been made. The prices have changed from 2018 to the present”
- Anuruddha Wijesinghe Commissioner General Department of Motor Traffic

It has been reported by the Department of Motor Traffic (DMT) that plans are underway to initiate a project called ‘e-motoring’ which would eventually lead to large-scale frauds when implementing it. The biggest concern is that the project has been planned for without the calling of tenders. In 2018, the DMT initiated steps to introduce a new software for the project, which is an e-motoring project. The procurement process for this software was entrusted to a partner company named Metropolitan Advance Technology (Pvt) Ltd (MATL), a joint venture of Metropolitan Office Pvt Ltd and Face Technology Pvt Ltd. According to the agreement, the government should pay 187.97 rupees for each task, with a minimum requirement of 60,000 tasks per month. The project was to be implemented over a five-year period, and the estimated cost produced a figure of 700 million rupees.
Although this project was scheduled to commence in 2018, it has yet to be implemented. Despite this delay, reports indicate that two influential government ministers, along with an official whose name is referenced in the Hansards of the Parliament concerning procurement corruption in the Ministry of Transport, are planning to carry out a financial fraud exceeding 12 billion rupees through this project. This act which has been planned for will violate the project agreement. Additionally, they have not carried out the procurement process of this project in a proper manner. It has also been reported that this large-scale financial fraud has the support of a minister representing a special committee responsible for making decisions on government fraud and corruption.

Numerous cabinet memoranda have been submitted with the objective of increasing the contract fees and reinstating the e-motoring project. The project remained unimplemented in 2018 and no tender procedure was initiating to start the venture. Submitting the Cabinet Memorandum No: MT/47/2022, dated 29/07/2022, titled “Implementation of the e-motoring project and revision of contractual services and fees,” the approval of the Cabinet of Ministers has been sought to establish a “discussion committee appointed by the Cabinet” to seek recommendations for the adjustment of fees and contractual services. Through the decision of the Cabinet of Ministers No 22/1091/608/009 dated 31/08/2022, the approval has been given through the process of appointing a discussion committee. It is reported that, by submitting cabinet memoranda, efforts are being made to secure approval for the revision of fees and contractual services.
Attempts to increase the fees are being made despite the clear stipulation in the agreement that the fees cannot be altered for any reason.

It is evident that the government will face a substantial financial loss by agreeing to revise the fees requested by the service provider, because then there would be a delay in the project. The officials overseeing this procurement process bear direct responsibility for this situation as they are neglecting the procurement entity’s responsibilities as outlined in 2.3.1 (a) of Chapter 2 in Procurement Guidelines. Nevertheless, five years have passed, and the project remains unimplemented. The Covid epidemic led to a decline in vehicle sales and transfers within the country. Based on a government policy decision, restrictions were imposed on vehicle imports; resulting in a decrease in new registrations. As a result, the functions of the Motor Traffic Department were curtailed; leading to accusations against the department. Claims were made that as a result the implementation of the project was delayed.
Business Process Re-engineering was conducted around the year 2009/2010 concerning the operation of the DMT, under an external consultant. Due to the time required for the implementation of that process, a suggestion was made to redesign and review it in 2017, under the same external consultant. A plan to reassess the original Business Process Reengineering (BPR) was executed. Adhering to current process requirements, the Department of Motor Traffic once again crafted the BPR document, encompassing new operational and technical requirements, under a renewed operational process.
Subsequently, on July 19, 2018, following a government procurement procedure, and based on relevant approvals, an agreement was signed between MATL and the DMT. The execution of the agreement involves the reconstruction of the actions outlined in the agreement between the MATL and the DMT. To facilitate this, a User Requirement Specification (URS) has been collaboratively prepared with officials from the DMT. Based on the URS, the MATL team assured the DMT that they would deliver a comprehensive software solution. However, as of now, the company responsible for the project or any other party has not provided the DMT with such a developed and completed software system.
As of 2019, the implementation of the e-motoring project was anticipated, but it could not be done due to several contributing factors. DMT was required to provide a building with the necessary office equipment for the company responsible for implementing the project. However, the space within the Narahenpita office, where the motor traffic department is situated, was insufficient. Moreover, a new building was not allocated for the project due to concerns regarding the existing buildings being outdated, the high maintenance costs associated with them, and potential disruptions to daily services following the initiation of regulatory work for the new project. Consequently, the project experienced delays.
Due to the impossibility of halting the ongoing vehicle registration process, this project was planned to be carried out in an alternative building. A temporary building belonging to the Urban Development Authority in Castle Street and a temporary building in Werahera were planned to be used for this purpose. But, due to the failure of that plan as well, the commencement of the project was delayed, as stated in the Cabinet Memorandum No MT/68/2023, dated 11-09-2023. Subsequently, the Ministry of Transport had a plan to initiate the project by renting a building owned by the Broadcasting Corporation for 9 million rupees per month. However, the amount significantly differed from the government estimate. It is noted in the Cabinet Memorandum that this plan was not implemented as a result. The Cabinet Memorandum No MT/05/2023, dated 2023-01-23, states that a building in Narahenpita premises was selected, but it was unsuitable for accommodating space for this project.

Accordingly, in the inspection report of the Minister of Finance, Economic Stabilization, and National Policy, numbered PFD/PMD/CM/2023/T&R/185 and dated 2023-05-29, it has been suggested to obtain space from the Urban Development Authority or another government-owned institution given that there is no possibility to secure space form this project within the department. A committee, headed by the Prime Minister’s Secretary, has been appointed for this purpose which has recommended the acquisition of a 10,000-square-feet building. However, as per the memorandum No. MT/68/2023 submitted by the Minister of Transport and Highways to the Cabinet on 11-09-2023, approval has been granted to secure a building spanning 15,000 square feet at a monthly rent of 98 rupees per square foot.

No procurement process 

It has come to light that none of the aforementioned steps were carried out through a procurement process. The building obtained on a rental basis has been handed over to the company responsible for the e-motoring project without following any procurement procedures to facilitate its preparation for operational use. Price quotations have been received only from the relevant company thus far.  The Ministry of Transport and the aforementioned company are working to raise fees by integrating them into the cost per unit of the e-motoring project. In a proposal from the company, it is stated that in addition to the agreed-upon amount of 187.97 rupees for one task within the e-motoring project, an additional charge of 642 rupees has been suggested for the repair of a 4200-square-feet building, to make it suitable for operational use. This amount is contingent upon the minimum requirement of 60,000 tasks within the DMT over a 5-year period. It has been discovered that the government is incurring billions of rupees in extra costs due to the implementation of this process without following a proper procurement procedure.

Meanwhile, former President Gotabaya Rajapaksa in 2021 had instructed the Information and Communication Technology Agency of Sri Lanka (ICTA) to assess whether the software associated with this project aligns with technical standards and security procedures. He has further advised suspending the relevant project until a thorough evaluation is conducted. In response, the ICTA has provided its recommendations in letter No. ICT/CEO/2021-06, dated 03-02-2021. Accordingly, only 3 out of the 6 modules of the software have been presented, and the respective company has failed to deliver a complete software solution. It is also noted that the said company has been unable to present a comprehensive software solution system of the proposed system to the DMT.

In evaluating this entire process, the Ministry of Transport and Highways, along with the Department of Motor Traffic, has identified various reasons for the delay in the e-motoring project. One of the reasons is outlined in 1.1 of the Cabinet Memorandum No. MT/05/2023 dated 2023-01-23. It states that although the software has been designed and completed, the project faced delays due to the lack of building facilities. The Ministry of Transport has underscored that the project could not be commenced even at the test level. However, based on the recommendations from the ICTA on 2023-03-02, it is evident that the company overseeing the project has not developed a proper software system.
It appears that the Ministry of Transport and Highways, along with the company in charge of the project, is attempting to increase the contractual fees, despite the project company not having developed a complete software solution system. Section 2.1 of Cabinet Amendment MT/05/2023 states that this fee to be laid to the service provider cannot be revised. However, in the same memo, there is a suggestion to increase the fees in section 3.1. The agreement of the service provider does not mention any provision for such a revision in the fee. Nowhere in the project agreement does it state that the fees can be revised due to fluctuations in the value of the US dollar. Nevertheless, it seems that certain individuals within the Ministry of Transport are attempting to revise the fees by altering the clauses of the agreement. If a revision of project fees is agreed upon based on the change in the value of the US dollar, it would undoubtedly set a precedent for providing the same opportunity for other concurrent government projects and equipment purchases.
The legal unit of the DMT has previously explained that if the government unilaterally withdraws from the agreement, the relevant company has the possibility to initiate an arbitration process. However, there is no knowledge about the actions that would be taken by legal officers regarding the supplier’s inefficiency or the fact that the software system has not yet been developed, and the supplier is not fulfilling the terms of the contract. It is ironic that the absence of providing a building is hindering the development of the software.

However, ministry officials attribute the delay in the e-motoring project to the non-provision of buildings. The inefficiency of the company is underscored by the fact that it has already failed to develop the software system. It is also reported that certain individuals within the Ministry of Transport are attempting to downplay this issue and potentially gain significant profits through a price revision.
The company that accepted this project received a low score with regard to the technical ability in the procurement process. Another company, demonstrating superior technical ability, proposed a price of about 350 rupees for one operation. The company that secured the project accepted to be the service provider at a lower price. Now, they have devised a plan to obtain a higher price without developing a complete software solution. According to the agreement, out of the two affiliated companies, the related software system should be designed by the foreign company with technical capabilities. However, it has come to light that there are plans to abandon the foreign company and develop the software system through a local company.
The DMT handles approximately 200,000 activities per month. However, in the procurement process for the e-motoring project, a minimum of 60,000 activities per month has been stipulated. However, with the current planned price revision, the company involved is projected to earn an additional income of about 12 billion rupees through the e-motoring project over five years; taking into account the number of regular activities. The government stands to lose a substantial amount of money due to the absence of a proper procurement process, with the possibility that certain portions of the funds may end up in the wrong hands. It appears that the Government Audit Department is adopting a passive approach to this situation; allowing some individuals to exploit the project for personal gains. Employees from the Department of Motor Vehicles and the Ministry of Transport suggest cancelling the e-motoring project and the current company, and instead, giving it to a suitable company through a proper procurement process.
This newspaper also inquired with Ranjith Rubasinghe, the Secretary of the Ministry of Transport, regarding the current status of the e-motoring project.
“I am also investigating the reasons behind the delay in the e-motoring project. It will take me a while. Fees will have to be increased regardless; the fees from 2018 are not suitable for today. However, the cause of the delay in the project is not the lack of fees and the unavailability of a location. The exact reason for that cannot be determined at this point. I don’t have the necessary information yet. I am sad that it is taking such a long time to develop this software. Why it’s taking this long is a question. Creating software should not be as time-consuming as constructing a building or a road.” Rubasinghe said. 
This newspaper also asked Anuruddha Wijesinghe, the Commissioner General of the Motor Traffic Department, regarding these issues. He said the following:
“Due to the lack of a suitable location, the initiation of the e-motoring project faced delays. However, the project has recommenced, and a request for a price increase has been made. The prices have changed from 2018 to the present. The software is now complete. The statements made by ICTA in 2021 may not go with the current situation. As of today, the software development is completed. If the Secretary of the Ministry of Transport states otherwise, there is no use in seeking clarification from the Commissioner General. The procurement process has been carried out correctly, and the project is in progress,” said Wijesinghe. 

no delay in creating software

When inquired about this project, MATL, the company responsible for developing the relevant software. Gayan Samaraweera, one of its officers, provided the following statement: 
“There is no delay in creating this software. The reason for the delay in the project is the absence of a suitable location. The development of the software is currently underway. We have been developing this software for about six months now. We only undertake the tasks assigned to us. We are not behind schedule. We are prepared to engage and assess. The main contractor is working with the government regarding the other processes,” said Samaraweera.

“The minister has sought legal counsel on the matter”
-Alagiyawanna
This writer made inquiries from the Minister of Transport and Highways, Bandula Gunawardena, regarding the reasons for the delay in this project. The Minister directed us to inquire from State Minister of Transport Lasantha Alagiyawanna. He provided the following response:
“This project was scheduled to commence in 2018, but it faced delays due to the absence of a suitable building. Currently, as the project resumes, a notification has been received from a concerned party saying that the technical suppliers associated with the relevant company are not present. 
The minister has sought legal counsel on the matter. The future progress of this project will be subject to the directives of the Attorney General. We are bound by those instructions, and any decisions on whether to proceed or not will be made based on the recommendations of the committee appointed by the cabinet and Attorney General’s instructions. We cannot operate outside the law.”state Minister Alagiyawanna said.