This article first appeared in The Edge Malaysia Weekly on May 27, 2024 - June 2, 2024

Much thought and restraint should be put into terminating contracts that have already been awarded because not only is hefty compensation often involved, there could also be delays to the projects’ implementation.

In April, AwanBiru Technology Bhd (KL: AWANTEC) was awarded RM231.55 million after it won its lawsuit against the government over the termination of the RM3.5 billion National Immigration Control System project. Ironically, AwanBiru is actually appealing the decision as the award is only one-third of the RM733 million it had claimed after the government cancelled the 15-year contract.

AwanBiru was awarded the project in August 2017, under former prime minister Datuk Seri Najib Razak’s administration. However, after the Pakatan Harapan government helmed by Tun Dr Mahathir Mohamad came into power in 2018, it scrapped the project in December 2019. In January 2021, Iris Corp Bhd (KL:IRIS)  was awarded a scaled-down version of the project, dubbed the National Integrated Immigration System, at RM1.16 billion.

But Iris Corp was terminated last August for allegedly being behind schedule. The company has said it is taking its dispute with the Ministry of Home Affairs (MoHA) over the cancellation of the contract to arbitration.

It is not clear at what stage things are in this dispute, or how strong a case Iris Corp has, or if the government will end up forking out compensation payments again.

Nevertheless, the need for the project was still not fulfilled despite having been awarded twice. So, MoHA called for proposals for a similar contract in mid-December last year, and the bids were closed on Jan 10 this year, with an award pending.

After a delay of over six years, costs for this project have gone up substantially, with the ringgit weakening from 4.07 to the US dollar in August 2017 to 4.71 now, not to mention the overall increase in costs.

And throughout this period, the safety of our borders may have been compromised.

Hopefully, the third time is the charm for the awarding of this contract.

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