KUALA LUMPUR (March 6): The Public Accounts Committee (PAC) has flagged irregularities in the Ministry of Home Affairs' issuance of the letter of acceptance (LOA) for the Foreign Worker Centralised Management System (FWCMS) to Bestinet Sdn Bhd in 2018.

The LOA, signed by the ministry's Immigration Affairs Division secretary on Jan 12, 2018, followed an instruction from then-deputy prime minister and home minister Datuk Seri Dr Ahmad Zahid Hamidi. The PAC report stated that Zahid's directive, forwarded by his then-private secretary, urged the contract's immediate finalisation.

"On Nov 30, 2017, the Deputy Prime Minister’s Office, through Dr Sabri (the private secretary), forwarded a letter from Bestinet expressing its intention to proceed with the contract. The letter included a directive from Zahid, instructing that the contract be finalised immediately. It also specified that the LOA offer should not exceed six years," Alan Abdul Rahim, who signed the LOA, said in a proceeding on Feb 3, 2025.

Tan Sri Alwi Ibrahim, a former secretary general of the ministry, admitted that he was not consulted before the LOA was issued, and was surprised to learn it had been signed by another officer.

"I was also surprised when I later found out that the letter had been issued by an officer a few weeks later," Alwi said.

He clarified that no delegation of authority had been made for this action.

Notably, Zahid, now the deputy prime minister and minister of rural and regional development, was not called to testify during the PAC proceedings.

To recap, the PAC in a report released on July 3 last year revealed that despite the LOA being issued, the contract between the government and Bestinet remained unsigned until its expiry on May 31, 2024.

The contract was eventually finalised on Sept 3, 2024, following Cabinet approval on Aug 14. It took effect retroactively from June 1, 2024, and will run until Jan 31, 2031.

The six-year contract resulted in a significant increase in the government's payment to Bestinet for each issuance of an online temporary work permit or ePass, rising to RM215 from RM100.

The PAC said that the contract between Bestinet and the Home Ministry remained unsigned after the LOA was issued in 2018, due to a dispute between the two over the collection fee.

The charge approved by the Public-Private Partnership Unit (UKAS) was RM86, while Bestinet requested RM120.

The government's failure to honour the signed LOA exposed it to a RM1.57 billion lawsuit from Bestinet, the PAC noted.

As a result, the government had to negotiate with Bestinet, and agreed to an increased rate of RM215 per ePass issuance — lower than Bestinet’s requested RM230— under the recently signed six-year contract.

Under the new contract, the RM215 per ePass issuance includes RM130 for Bestinet to recover RM1.57 billion in losses from 2018 to 2024, and RM85 for operating costs from 2025 to 2031.

The RM130 component helps Bestinet recoup lost income and interest, which it argues should have been collected through the FWCMS system from April 1, 2018 to May 31, 2024.

Bestinet's claim includes RM1.32 billion in lost income and RM252 million in interest.

According to Hebat Hisham Mohd Yusoff, the deputy divisional secretary of the Immigration Affairs Division, the RM215 fee will be collected through the Malaysian Immigration System (MyIMMs), with reimbursements based on ePass issuance.

Meanwhile, Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar assured that Bestinet’s contract will not be extended beyond Jan 31, 2031, and that the FWCMS system will be handed over to the government.

The PAC has urged the Home Ministry to inform Bestinet of the final RM215 fee collection method, and to optimise the FWCMS until 2031.

This is as the National Integrated Immigration System (NIISe), which aims to replace the MyIMMs, is expected to be ready by 2028.

The PAC stressed the need for better cybersecurity measures for the FWCMS, and reminded the government to follow procurement rules.

Read also:
PAC chastises govt for running foreign worker recruitment system for six years without contract
Bestinet's contract extension for foreign worker system could cost govt at least RM3.2b — PAC