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It won’t be logical to continue the skin project:
- Skin project was cancelled by muhyiddin during his time as minister of home affairs, and replaced by niis, it won’t be logical to do this
- skin project was 3.5b, while niis tender is 1-1.8b, its cost saving for the gov
- niis project also probably include new border control elements due to pandemic, where skin scope was drafted long time back, it could be not that relevant for today context
- prestariang has been loss making for every quarters in 2019 and 2020. It tells that they can’t lobby for gov projects
Presbhd old boss is coming back to company. Muhyidin also dont have big majority in their perikatan. Simply cancel niis if election come. Cant predict what new alliance in next election. Pas+bn+bersatu or bn+pkr+dap
The SKIN project took three years to finalise. Does it make any economic sense to cancel it? Although a new system will be developed, is there any certainty of when that will be completed?
The development of the new system might take a few more years to complete, leaving Malaysia exposed to security threat.
If the government intends to start from scratch all over again, it could take a further four years before a new system is finally up and running.
SKIN was already in the final stages with the first phase scheduled for implementation. it seemed ill-thoughtout that the project was cancelled without any consideration for Prestariang to present an alternate and cheaper proposal.
SKIN had the potential of bringing in increased revenue based on the consolidation of various services, including the Malaysia Automated Clearance System (MACS), foreign visa system (VLN), e-Visa and the Foreign Workers Centralised Management System (FWCMS), which had previously been outsourced to private vendors.
The Home Minister has said the IIS would see the government saving RM1 billion as it would be developed at a lower cost, these savings could be easily wiped given the time required to develop an entirely new system, not to mention the maintenance and technology refresh costs for The NIIS.
SKIN was cancelled as a paper prepared by Malaysian Administrative Modernisation and Management Planning Unit (Mampu) had actually recommended for its continuation.
“Mampu had recommended that Cabinet continue with SKIN because even though it entailed higher development costs, it would have the benefit of providing savings in maintenance costs, plus it is free from government financial risk.
It is also understood that the government would have easily made savings on the development costs as Prestariang was willing to renegotiate the price and lower it by as much as RM500 million.
The government is also likely to have to pay out compensation of around RM730 million to Prestariang. i dont think it is a smart move to pay for a compensation to cancel a project and then restart a new project. The RM700 Million compensation must included into the new project cost as it is a part of the expenses to build the new IIS.
For your info that the more expensive SKIN contract included a maintenance contract, whereas the NIIS contract is just to build, install and commission the system. There will be a separate contract for the maintenance of the system. What make you think that a lose making company cant lobby government project when the cow is able to live in condo under BN government???
Factor into maintenance cost as per skin term, maintenance cost is normally at 15% per annum, which is 180m per annum for starting if the project is awarded at 1.2b. And normally the maintenance is on a decreasing schedule when the system goes more stabler, say it goes down to average 12% or 144m per annum
Year 1-3 is development - 1.2b
Year 4-15 is maintenance - 1.7b
Total of 2.9b, a saving of 600 mil
However, government is not obligated to subscribe to the mandatory maintenance like skin term, they can always call for competitive bid for maintenance, and no need to pay 3.5b at year 3 upon full commissioning, which is a huge burden at present time
The entire cost of SKIN would have been RM3.5 billion awarded on a public-private partnership model whereby the government would not have been required to make any payments to Prestariang until July 2021, and even then, all payments would be subject to punitive deductions based on non-compliance with monthly key performance inidcators.
Apart from savings, SKIN had the potential of bringing in increased revenue for the government based on the consolidation of various services under it which is estimated that savings and increased revenue could total as much as RM2 billion
The Total of 2.9Bil as mentioned plus RM700mil compensation equal to RM3.6Bil.Cheaper than the SKIN?. Prestaring is willing to reduce the cost to RM3Bil with maintenance. This is not including potential of bringing in increased revenue for the government based on the consolidation of various services under it. Government should not only consider for the best price, but the quality of the project is very important because this is a high profile national security project.
