(Update 2) Poll automation back on track

By Aries Rufo, abs-cbnNEWS.com/Newsbreak

Posted at Jul 03 2009 04:30 PM | Updated as of Jul 04 2009 03:00 AM

MANILA - Commission on Elections (Comelec) chair Jose Melo was all smiles after emerging from a 3-hour closed-door meeting with officials of the Barbados-based Smartmatic and Filipino firm Total Information Management (TIM) Friday afternoon.

“How do you judge the way we look?” Melo asked the reporters who staked out of the meeting.

“Everything seems to be on track again. We are back to automation,” said Melo, whose smiles were a far cry from his anxious look days ago.

Faced with threats of criminal and civil suits, TIM blinked and agreed to proceed with the election project with its foreign partner.

Asked how Smartmatic and TIM were able to settle their differences, Melo refused to elaborate, asking the media to respect the truce between the two partners.

However, he pointed out that TIM president Jose Mari Antuñez “allowed the greater interest of the country to prevail.”

He added: “Whatever internal arrangement (they have), it’s between them.”

Incorporation papers

The poll chief said TIM and Smartmatic are in the process of finalizing their joint venture incorporation papers, and are set to file these with the Securities and Exchange Commission (SEC) on Monday.

He said Comelec and the incorporated Smartmatic/TIM joint venture might sign the contract for the poll automation project by Friday next week.

The elections technology provider and TIM bid P7.2 billion to automate the polls.

Safeguards secured

TIM returned to the negotiating table with Smartmatic and the Comelec after it secured the necessary "safeguards" for the poll automation project. 

TIM President Jose Mari Antuñez confirmed that they were able put in place some “safeguards” in its joint venture partnership that proved to be the turning point in its dispute with Smartmatic..

He refused to be specific, saying that he is bound by a confidentiality agreement until after the contract with the Comelec to provide electronic counting machines is signed.

Antuñez said he will “tell the truth” in the Senate hearing scheduled on Monday.

“If they ask, I cannot lie,” Antuñez said, when asked if he was willing to spill the beans on the real circumstances of its dispute with Smartmatic. The dispute almost railroaded the automation project.

Reports obtained by abs-cbnnews.com/Newsbreak showed that TIM sought to back out from the project after sensing that powerful people were trying to dip their fingers in the project.

Smartmatic and TIM won the right to provide electronic voting machines for the country’s first nationwide automated polls in 2010.

In jeopardy

The automation project was put in jeopardy after TIM announced last Monday that it was withdrawing from its deal with Smartmatic. TIM had dragged in signing the incorporation documents to be registered with the Securities and Exchange Commission.

The incorporation of the joint venture is one prerequisite before the Comelec enters into a contract with Smartmatic and TIM.

The documents are required by the Comelec as proof of the joint venture’s legal personality for the contract signing.

TIM, which would have a majority or 60 percent stake in the venture, had wanted more control in the financial and technical aspect of the automation project.

TIM officials had alleged that despite Smartmatic’s minority, or only 40 percent, stake in the venture, the foreign partner would have more control over the partnership’s affairs.

Without the proper check and balance, the groundwork for a possible electronic fraud is laid out, TIM sources said.

Smartmatic had insisted that the core issue is money. Lawyers of Smartmatic told Makati Rep. Teodoro Locsin that TIM’s Antuñez had demanded P500 million from Smartmatic.

TIM had denied the allegation.

But as far as the poll body is concerned, it was TIM that was the guilty party. It threatened to file criminal and civil charges against TIM for backing out of the landmark project.

More involved

If the corporate dispute between Smartmatic and TIM almost wrote finis to the Comelec’s most ambitious project, it also had its silver linings.

During its meeting with Smartmatic and TIM, the Comelec en banc reasserted its authority to be on top of the automation project, diminishing the possibility of Smartmatic running the entire show in the implementation of the automation.

“We will have control over the entire operation. We will have our project management team, and this will be the one to give direction and orders,” Melo said.

Smartmatic has been hounded by controversies in election projects it has implemented elsewhere. Its automation project in the Philippines is its biggest contract so far.