RM273mil lost in ‘uCustoms’

PETALING JAYA: What was supposed to be a cost-savings system ended up becoming a whopping RM273mil loss for the government.

The Customs Department’s “uCustoms” project, which kicked off in 2013, was meant to be a modern online system that was to increase work efficiency and help save cost.

However, seven years on and five extensions later, the million-ringgit project has yet to materialise.

The Auditor-General’s 2019 report (Series 2) found that RM273mil in payments have been made towards the project, but the system that was supposed to replace the one in use since 1995 was never completed.

Out of 3,876 deliverables, only 1,056 or 27.2% have been received by the Customs Department, while only three out of 70 main modules have been completed and are operational.

“Overall, it can be summed up that the development of the uCustoms system failed to be completed within seven years and two months (86 months), even after five extensions of time (EOT) were given.

“A total of RM272.99mil was paid to suppliers and the project management office while a liquidated ascertained damages (LAD) of RM55,650 has been imposed.

“A notice of LAD charges amounting to RM3.94mil was issued on Dec 31, 2020, for EOT 3 and EOT 4 to Company 374044-H,” the report said.

Some of the weaknesses that were revealed showed that a feasibility study was not conducted prior to the development of the uCustoms system.

The report said there were shortcomings in the payment process, where 13 payment vouchers amounting to RM64.89mil could not be confirmed because complete documents were not attached.

Also, it was revealed that a selection of suppliers did not take into account the evaluation and report prepared by the Technical Evaluation Committee.

“PMO (Project Management Office) did not prepare, update and save project management files in both soft copy and hard copy centrally.

“There was a high turnover rate among senior officers of the uCustoms supplier team.

“Six contracts were signed late between 58 and up to 204 days,” the report said.

According to the report, the total development of the uCustoms system involved four supplier contracts and three PMO contracts amounting to RM397.43mil.

Of the total, RM390.01mil was for system development contracts while RM7.42mil was the cost for the PMO contracts.

The report has recommended a comprehensive study of the Customs system requirements to be conducted before the development of a new system.

It said sound project governance should be established so that the actual progress, implementation of the go-live system, module development, deliverables as well as progress payment can be monitored with the appropriate action.

“Ensure the implementation of the project in accordance with the terms of the contract that has been agreed and within the stipulated period.

“This is to ensure that the system can be developed in accordance with the required specifications and achieve the objectives that have been set,” said the report.

It also called for the maintenance of system development documents so that future system development can be done efficiently, orderly and comprehensively.

“The system shall ensure the security of government data and information is preserved.

“Ensure that the source code for the system development is the property of the Malaysian government to avoid complete dependence on suppliers for the purpose of completing future system development and maintenance,” the report said.