Sight texture problem.

[Portugalotaku]

I have been having some problems with this texture on a holosight. You see, it is supposed to look like this:
[t]http://vignette4.wikia.nocookie.net/fear/images/c/cd/FEAR2_2014-04-24_00-46-12-81.png/revision/latest?cb=20140424055721[/t]
However I cannot make it become transparent. Despite having a correct alpha channel and appearing transparent when in picture editing software, once loaded into VTFedit it turns solid.
[t]http://i63.tinypic.com/2r47c0l.jpg[/t]
A texture sample:
[url]http://www.mediafire.com/download/giv7tatl674i6qz/texture.rar[/url]

And the vmt file:

[QUOTE]"VertexlitGeneric"
{
"$basetexture" "models/fear2/smg/f2_smg_dot_d"
"$bumpmap" "models/fear2/smg/f2_smg_dot_n"

"$model" "1"
"$halflambert" 1
"$alpha" "0"
"$phong" "1"
"$phongboost" "2"
"$phongfresnelranges" "[0.1 .5 1]"
"$phongexponent" 30
"$phongalbedotint" "1"

"$nocull" 1

"$selfillum" 1
}[/QUOTE]

If someone knows how to fix this, please tell me.