Govt blew RM273 million on failed uCustoms project, says auditor-general

Chan Kok Leong Noel Achariam Ragananthini Vethasalam Diyana Ibrahim

The Customs Department has commenced on a modernisation process to offer its services 'at your fingertips, anytime, anywhere, any devices'. – The Malaysian Insight file pic, September 28, 2021.

THE Customs Department’s Ubiquitous Customs (uCustoms) system project is a failure that has wasted RM272.99 million, the auditor-general said in its 2019 report.

This is despite an allowance of a contract period of 86 months and five extensions of time (EOT) for the project, it said.

The report on federal government ministries and agencies, which was tabled in Parliament today, said the project was to have been completed in three years, by October 25, 2015.

“A sum of RM272.99 million was paid to the supplier while the project management has claimed liquidated ascertained damages (LAD) compensation of RM55,660 have been imposed.

“A notice for LAD amounting to RM3.94 million was issued to the company bearing the registration number 374044-H on Dec 31, 2020 for EOT 3 and EOT 4,” said the auditor-general.

A look at previous reports found that the company is Brilliance Information Sdn Bhd, which designs IT solutions for organisations. 

Besides the Customs Department, the clients’ list on the company website include the Health and Agriculture Ministries, Agro Bank, Selangor government, police, PR1MA, Mampu, Attorney-General’s Chambers, Mara, Shah Alam City Council, and Tabung Haji.


In the report, the auditor-general listed 18 weakness in the uCustoms project. They were:

• Delays in preparing the components and release of the uCustoms system
• Only 1,056 (27.2%) of the 3,876 deliverables were met 
• Only three of 70 main modules have been fully completed and is operated
• Release 2 and 3 went live before the User Acceptance Test was completed
• Certification for Release 1, 2 and 3 were delayed between 238-933 days
• Absence of feasibility study 
• Weaknesses in the payment process whereby 13 payment vouchers amounting to RM64.89 million cannot be verified due to insufficient documents
• Choice of vendors did not take into consideration the technical committee’s assessment 
• Commercial off-the-shelf products used by the vendor needed 70% customisation and 30% configuration that did not conform to uCustoms needs
•  Project management company (PMO) did not play its role
•  PMO did not keep any records of the project management at its main office
•  capability of the vendor
•  High turnover rate at the vendor company
•  Six contracts were backdated between 58-204 days
• Weak management with frequency of meetings failing to comply with the uCustoms project management committee requirements
•  16 CCTVs broken down since 2018 while four door access readers at the main data centre have failed
• Change Control Board (CCB) took between 2-776 days to verify the change request.


The auditor-general said the Customs Department must conduct a full evaluation of its existing IT system before deciding to develop a new one. 

“The Customs Department must also have a proper project management team to oversee the project and take appropriate actions. 

“Customs Department must also ensure the project goes according to the terms of the contract.”

It said the department must also keep proper documentation of the project and obtain the source code for the system which belongs to the Malaysian government. 

“This is to avoid a situation where the government has to fully rely on the vendor to complete and maintain the system.”

The uCustoms design was mooted in 2013 to replace the Customs information system that was installed in 1995.

The Abdullah Ahmad Badawi government had in 2011 tasked Mampu (Malaysian Administrative Modernisation and Management Planning Unit) with studying the need to develop the uCustom system.

The Customs Department began a modernisation process in  2013 to offer its services “at your fingertips, anytime, anywhere, any devices”, said the report. – September 28, 2021.

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  • Hard earned money down the drain again..never ending!

    Posted 2 years ago by Elyse Gim · Reply