Billion-ringgit immigration contract to be awarded soon

  • Corporate News Premium
  • Saturday, 08 Feb 2020

Heitech Padu Penang

THE single-largest government-related technology contract is coming closer to fruition and selected parties have been called to put in their new bids.

During the midweek, a briefing was held by the Home Ministry for selected parties and a new detailed tender document related to the Integrated Immigration System (IIS) was given out, sources say.

These parties have until March 4 to submit their bids, with the government intending to be rolling out the system as early as April, the sources add.

The IIS is also now being called the National Integrated Immigration System (NIIS).

The project is essentially the new version of what was previously called SKIN or Sistem Kawalan Imigresen Nasional.

It was previously awarded to Prestariang Bhd in 2017 under a 15-year concession and at a contract value of some RM3.5bil.

That project was terminated by the new government in 2018 and Prestariang has taken legal action for compensation for that.

Following the termination, the Home Ministry had called for a request for proposal (RFP) last May, that reportedly had attracted more than 30 bids from various parties.

Instead of selecting any of those proposals, the Home Ministry had used information from the bids to come up with a detailed specification on how the NIIS should look.

Sources say this now includes elements of facial recognition using artificial intelligence, the use of big data such as the travel history of individuals being available to officers at the touch of a button. The tender also specified the required hardware.

“The new system will do away with old recognition methods such as fingerprinting to be replaced with all the new technologies available, ” says one source.

Another development related to the project is that the government is encouraging parties to form consortia in their applications, as the project’s size and complexity could be too big for a one single company. Raising the required financing for a multi-billion ringgit project would also be a challenge.

One source says, “Some companies have already started discussions to team up for the NIIS tender as financing could pose a challenge for this project.”

However, one contender said that his group does not need to team up with others as they are capable of carrying out the entire project themselves.

Recall that after SKIN was terminated in 2018, Home Minister Tan Sri Muhyiddin Yassin had said 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 meets the real needs of the Immigration Department as well as save nearly RM1bil for the government through a competitive open tender process.

Notably, under the SKIN project, 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).

MyIMMS is currently being maintained by HeiTech Padu – an information technology services provider controlled by Permodalan Nasional Bhd.

HeiTech Padu’s maintenance contract for MyIMMS expires this August.

Immigration director-general Datuk Khairul Dzaimee Daud was quoted as saying that the MyIMMs will only be completely halted after the NIIS system is fully handled by the department.

MyIMMS had received criticism for its flaws, with the Auditor General’s 2015 report saying that the system was “not up to mark”.

It was reported in 2016 that there were elements of sabotage in MyIMMs, where billions of ringgit were siphoned into the hands of syndicates. This resulted in 15 immigration department officers being sacked.

At the same time, MyIMMS design is fragmented, with different functions developed and operated by different vendors.

The new NIIS project is expected to integrate all the immigration functions such as the foreign workers processing system and border controls including visitors entry and exit clearance system.

Incidentally, the previous SKIN project was also said to a have similar scope.

Sources pointed out that the new NIIS project would take about three to four years to be completed and that the government will make progress payment while the project is ongoing.

“There is no longer a concession element. Under SKIN, the project was awarded as a 15 year concession that included maintenance. The new NIIS, may likely entail various vendors for different parts of the system, including maintenance, and this is where they hope to achieve the cost savings, ” points out one party.

However, an analyst points out that the cost savings has to be seen in light of the fact that the government is facing an ongoing RM733mil legal claim by Prestariang for the termination of the SKIN project.

Back to NIIS, market talk has it that among the companies that were invited to take part in the second round of the NIIS tendering process include IRIS CORP Bhd, HeiTech Padu, Scicom (MSC) Bhd, S5 Systems Sdn Bhd and Datasonic Group Bhd.

Notably, the shares of some of these companies have surged in the last six months in anticipation of the NIIS award.

If and when awarded, the billion ringgit NIIS project is likely to provide a positive catalyst for the hemorrhaging local equity market.

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