PETALING JAYA: A new immigration and border control system for the country is set to be rolled out, aimed at replacing the now-defunct RM3.5bil Sistem Kawalan Imigresen Nasional (SKIN) project approved by the previous Barisan Nasional administration.
The Home Ministry has issued a request for proposal (RFP) for the development of a new integrated immigration system for the Immigration Department, five months after the government terminated the SKIN project undertaken by Prestariang Bhd .
The RFP, which began last week, was issued amid the ongoing RM733mil legal claim by Prestariang against the government for the unilateral termination of the SKIN project by way of expropriation.
Only companies that are registered with the Finance Ministry are allowed to participate in the RFP exercise. Interested parties have been invited to submit their proposals for the immigration system from May 15 to Aug 19.
A briefing on the tender was held yesterday at the Home Ministry in Putrajaya, according to the ministry’s website. The sale of the tender document, which began on May 15, was closed yesterday
Speaking with StarBiz, a source said that the sale of the tender document has seen overwhelming response.
“A lot of interest, but only few would qualify,” he said.
Home Minister Tan Sri Muhyiddin Yassin had said previously that the decision to cancel SKIN was based on the need to develop a new system that was more comprehensive, efficient and user-friendly.
He also said that the new system must be one that is value-for-money and would bring savings to the government.
An analyst told StarBiz that the government was concerned about the cost of the SKIN project, which he described as “overpriced”.
“However, the new system would likely be at a reduced cost, perhaps with the same or more functionalities.
“But it remains to be seen whether the government would really enjoy cost savings, considering the RM733mil legal case by Prestariang.
“If the government loses and has to pay RM733mil on top of the cost of the new system, we could be looking at a higher overall bill,” he said.
Prestariang initiated the legal claim on April 15 after its negotiations with the government on the quantum of compensation for the contract termination met with a dead end. The company pointed out that it was not in default of the concession agreement and was entitled to payment based on the formula set out in the agreement.
CIMB Research said in an earlier note that the RM733mil compensation sought by Prestariang’s subsidiary, Prestariang SKIN Sdn Bhd (PSKIN), was much higher than its estimate of RM520mil.
“According to the concession agreement, the government is supposed to pay the full compensation by July 19, 2019. However, Prestariang’s legal case against the government may be a long-drawn affair,” it said.
The SKIN project was a 15-year concession, which had been secured by PSKIN on Aug 9, 2017.
Under the multi-billion-ringgit deal, Prestariang was required to design, deliver, continuously maintain and provide scheduled upgrades for a new immigration and border control system that was supposed to replace the existing Malaysian Immigration System (MyIMMS).
Built in the 1990s, MyIMMs is said to be a patchwork of different systems, which, in turn, has led to oft-reported instances of border control compromise and the inability of the government to carry out crucial threat assessments.
It is currently being maintained by HeiTech Padu Bhd – an information technology services provider controlled by Permodalan Nasional Bhd.
PSKIN in a media statement on Jan 22 this year clarified that the key payment terms of SKIN were not financially burdensome to the government.
It said that the SKIN project was a self-funded project, which could have generated new income and created savings for the government.
“Under the concession agreement, PSkin was to receive approximately RM3.5bil over the 15-year concession period, subject to the entire capital expenditure being privately funded by PSkin.
Payment to PSKIN by the government would only commence after SKIN is completely operational.
“PSKIN had undertaken extensive technical studies and works on the project since 2014 and a substantial amount of expenses have been incurred.
“PSKIN had also entered into numerous third-party contracts for the purpose of executing the SKIN project,” it said.
According to earlier reports, in the first three years (2018 to 2020), Prestariang was supposed to develop and deploy the system, and payments by the government to the company would only commence in 2021.
SKIN was initially projected to provide the information and communications technology firm an annual payment of about RM294.7mil from year four to year 15 during the maintenance and technical operation phase.