Delayed E-Motoring Project DMT’s alleged dealings sees procurement process being violated

There are allegations that the Department of Motor Traffic and the partner company violated the terms of the original contract by proceeding on matters of procurement without informing the Ministry of Transport

In 2018, plans were drafted to enhance the efficiency of the Department of Motor Traffic by introducing an e-motoring project. The project was commenced with the aim of modernising the department’s operations by implementing a new software. However, on February 20, 2024, this newspaper, through an article, exposed the project as a large-scale fraud. The article was headlined, “DMT’s Delayed E-Motoring Project Now Hits Legal Snag”. The report revealed that the project would result in a loss of 12 billion rupees to the country. The article highlighted violations during the procurement process; much of it happening when introducing the new software. Currently, certain officials from the Ministry of Transport and the Department of Motor Traffic are reportedly working on plans to proceed with this unlawful process.  

The e-motoring project was awarded through the procurement process to a partner company, Metropolitan Advance Technology Pvt Ltd; a joint venture between Metropolitan Office Pvt Ltd and Face Technologies Pvt Ltd. However, following an exposé by this newspaper, Metropolitan Office Pvt Ltd officially informed that Face Technologies Pvt Ltd, which was a part of the project, had withdrawn from the project. This was communicated via a letter sent by the Chairman of Metropolitan Advance Technology Pvt Ltd to the then Secretary of the Ministry of Transport, Engineer Ranjith Rupasinghe. Investigations by this newspaper, however, revealed that Face Technologies Pvt Ltd had actually withdrawn from the project in 2021. Furthermore, it was discovered that Metropolitan Office Pvt Ltd had failed to officially notify the Ministry of Transport about the withdrawal. As a result of the withdrawal of that company, the technical cooperation for this project has been terminated. The fact that this information was not officially communicated to the Ministry for several years raises serious concerns. Reports also suggest that senior officials in the Ministry of Transport and the Department of Motor Traffic were aware of the withdrawal, but concealed the matter. Sources within the Ministry of Transport indicated that this could be due to an alternative plan being pursued by these officials.  

In 2018, a procurement process was conducted to award the e-motoring project to Metropolitan Advance Technology Pvt Ltd. According to the project agreement, a minimum of 60,000 activities had to be completed each month for the approved payments. For each activity, a payment of Rs. 187.30 was agreed upon and the arrangement was set to continue for five years. Regardless of whether the 60,000 activities were completed within a month, the contracted amount was still payable for the original target of 60,000 activities over the five-year period. Consequently, it was estimated that this would result in an additional expenditure of approximately Rs. 700 million for the Department of Motor Traffic.  

However, estimates suggested that monthly activities would likely exceed 150,000 rather than the contracted 60,000. This increase is expected to raise the total cost of the project by an additional Rs. 1.5–2.0 billion over the five-year period. Furthermore, it has been revealed that the project is currently being implemented in violation of its procurement conditions. For instance, following the exposé by this newspaper, Metropolitan Advance Technology Pvt Ltd informed the Ministry of Transport that Face Technologies Pvt Ltd had withdrawn from the project and the project would proceed through another party.   

Plans to misuse funds   

During the previous government, ministers and former officials at the Ministry of Transport attempted to set the payment for a single activity under this project at nearly Rs. 1,000. In February 2024, this newspaper revealed that this activity of the project would incur a loss of approximately Rs. 12 billion to the government. Subsequently, plans were made to implement the project by reducing the amount to Rs. 350 per activity. However, as price revisions are not permitted under the terms of the agreement, any attempt to increase the amount would be unlawful. It is reported that the Ministry of Transport proposed various alternatives to the Department of Motor Traffic to address these issues, but these suggestions have yet to be considered. Allegations have also surfaced that certain former officials and ministers planned to defraud billions of rupees through this project. These plans were reportedly developed to misuse government funds. Officials at the Ministry of Transport have uncovered evidence suggesting that attempts were made to embezzle money; not only through the project’s implementation, but also through related processes.  

This project is yet to commence in any form. Moreover, one of the partner companies involved in the project has withdrawn. Consequently, the agreement signed for the project should be rendered null and void, requiring another procurement process. The agreement also provides for the possibility of recovering compensation from the company in question following its withdrawal without adhering to the proper procurement process. However, it appears that the Department of Motor Traffic has shown no interest in pursuing this course of action. It is widely known among department employees that senior officials of the Department of Motor Traffic were aware of the company’s withdrawal as early as 2021. This raises serious concerns about the intentions behind concealing this information, potentially to profit from the situation.   

During the procurement process, the contract was awarded to the partner company based on the technical expertise of Face Technologies Pvt Ltd, an international company with both extensive credentials and experience. After the withdrawal of this partner, a new procurement process should have been initiated. Instead, the technical responsibilities of the project were assigned to a local company, Millennium L. T. S. P, within the existing procurement framework. This decision has drawn allegations within the Ministry of Transport that the rules and procedures governing the procurement process were violated. Furthermore, the failure to notify the Ministry of Transport about the subcontracting arrangement with another party after the withdrawal of the main technical partner constitutes a serious issue. Another allegation is that the Department of Motor Traffic and the partner company violated the terms of the original contract by proceeding without informing the Ministry of Transport.   
Face Technologies Pvt Ltd hasn’t developed a fully-featured software system related to this project. This was also highlighted by the Information and Communication Technology Agency (ICTA) to the Department of Motor Traffic on March 2, 2021. Additionally, it has been reported that the company didn’t transfer any part of the software system or its source code to its partner company, Metropolitan Advance Technologies Pvt Ltd. Furthermore, as disclosed in the investigation done by this newspaper, the company acknowledged that its involvement in the software development took place recently. The local company has stated that it has been developing the software system for six months; confirming that the system is being built by the local company.  

Advice sought from the AG’s Department  

Another issue involves the advice sought from the Attorney General’s Department regarding the implementation of this project. Allegations suggest that certain officials from the Ministry of Transport provided misleading information to the Attorney General to obtain recommendations. The officials of the Ministry of Transport have noted that the matters presented by those officers to secure the Attorney General’s recommendations are confirmed by the letter sent by the Attorney General’s Department to the Secretary of the Ministry of Transport, No. E/130/2023, dated 03-06-2024. They further argue that such actions set a dangerous precedent; negatively impacting the integrity of the public service.   

Moreover, the agreement between the Department of Motor Traffic and the relevant partner company doesn’t permit price revisions. Despite this, allegations persist that activities have been carried out outside the scope of the agreement.  

The current service provider, Informatics, which has been handling this work for several years, has also submitted a proposal to undertake the e-motoring project. According to their proposal, the entire project could be completed for two hundred million rupees; the proposal includes the comprehensive update of the existing system. This cost is significantly lower than the amount proposed by the company currently in charge of the project procurement. Informatics has extensive experience in maintaining and upgrading this system. Hence informed sources state that the popular opinion is that the Department of Motor Traffic and the Ministry of Transport should pay attention to the company’s proposal.  

It is reported that the Department of Motor Vehicles hasn’t taken any action so far, despite the company submitting proposals to update the current service. Therefore, the company has indicated that it will not be able to continue working with a system that is over 25 years old without a positive response to its proposals. The company has stated that it will not be able to provide software services starting from next year. Additionally, the new software project has not been initiated yet. The company currently providing the service has stated that it will also withdraw from the activities. If this happens, officials from the Ministry of Transport have pointed out that the process for issuing driving licences and vehicle licences would be stalled from next year.   

Attempts were made to contact Senior Professor Kapila C. Perera, Secretary of the Ministry of Transport, regarding this matter, but he was unavailable for the comment.  

“Further actions will be taken following cabinet approval”- Commissioner General DMT 

When this newspaper inquired about the matter from the Commissioner General of the Department of Motor Traffic, Nishantha Anuruddha Weerasinghe, he stated that the department is awaiting cabinet approval before making a decision. “Both the proposals from the current service provider, and the institution that submitted the procurement proposals have been submitted to the cabinet for consideration. Further actions will be taken following cabinet approval,” said Weerasinghe.  

 “A technology system cannot run for 25 years”- Informatics  

Commenting on this issue, Nirmal de Costa, the Chairman of Informatics, a software service provider, said, “The current system is more than 25 years old. The system, software, and equipment that existed are not the same as what we have today. Therefore, there are more irregularities that can be committed. A technology system cannot run for 25 years. They need to be renewed every five years. That is a problem for us too. It is a problem for the government too. If we are given this system, we can do this work more profitably. Our company has been with information technology for 40 years. We are a company that develops software in Sri Lanka and sells it to more than 20 foreign countries. We are also the company that has been working on the system for the Department of Motor Traffic for 25 years. Therefore, we do not need to do this work in conjunction with a foreign company or other companies. We can do this work as a single company,”  

 “No work had been carried out in violation of the agreement”- Metropolitan Advance Technologies 
Pvt Ltd   

When asked about the e-motoring project, Chandana Ravindra, a Director of Metropolitan Advance Technologies Pvt Ltd, said, “No work had been carried out in violation of the agreement. Although the project was slated to begin in 2018, the Department of Motor Traffic failed to provide the necessary facilities to commence the work after the agreement was signed. Following the exit of the previous partner, we initiated collaboration with Millennium Company, which is a globally renowned leader in software production. Millennium Company introduced and developed the QR code technology required by Sri Lanka and provided it to us at no cost. Together with that company, we have completed the development of the software. This is just one example. We have completed many other software projects as well. These two Sri Lankan companies are working together on this. Face Technologies Pvt Ltd withdrew from this project, and there is now no company by that name. Therefore, we have revised our pricing, which has been submitted to the Cabinet for approval. Once Cabinet approval is obtained, this project will be initiated. The relevant software has already been developed. I am currently abroad and cannot comment on the letter sent to the Ministry of Transport regarding Face Technologies Pvt Ltd’s withdrawal. I will provide a clear statement about this upon my return to Sri Lanka”.