Prestariang sues govt over SKIN project termination


Prestariang Bhd has initiated legal proceedings against the federal government, claiming RM732 million for the unilateral termination of the National Immigration Control System (SKIN) project in January 2019.

The legal claim, filed via its wholly owned subsidiary, Prestariang SKIN Sdn Bhd (PSKIN), is calculated based on a contractual formula provided in the concession agreement (CA) which has been agreed by the government awarded in August 2017.

Both parties had engaged in a few rounds of negotiations but were unable to reach an amicable settlement on the quantum, Prestariang announced in Bursa Malaysia yesterday.

“As a last resort, the board of Prestariang is now fiducially obligated and compelled to litigate for its contractual payment,” it said.

PSKIN secured a 15-year concession in August 2017, to design, deliver, continuously maintain and provide scheduled upgrades for a new and much improved immigration and border control system for the Immigration Department — under the Home Ministry.

Under the CA, PSKIN was to receive approximately RM3.5 billion over the 15-year concession period, subject to the entire capital expenditure being privately funded by the company.

In addition, payment from the government to PSKIN would only commence after the project is completely operational.

According to Prestariang, PSKIN has undertaken extensive technical studies and works on the project since 2014 and substantial amount of expenses have been incurred.

The firm has also entered into numerous third-party contracts for the purpose of executing the SKIN project.

“In its legal claim, PSKIN highlighted that the CA clearly spells out the government’s obligations in the event the project is unilaterally terminated by way of expropriation.

“Prestariang wished to re-iterate that PSKIN has never defaulted on the CA. Despite the agreement for a 15-year concession, the government unilaterally terminated the CA by way of expropriation, which took effect on Jan 22, 2019. PSKIN strongly believed that the CA was fair and reasonable,” it added.

Home Minister Tan Sri Muhyiddin Yassin (picture) previously said the decision to terminate the contract was to make way for the development of a new system that is comprehensive, effective and user-friendly.

“We also want to develop a system that is value for money and can save government funds,” the minister was quoted as saying last year.

Prestariang shares fell seven sen or 11.67% to 53 sen yesterday.

The counter saw some 48 million shares traded, closing with a market capitalisation of RM255.62 million.