PAC Report: MySejahtera Contract Capped At RM196 Million For Two Years

The sum consists of annual payments of RM98 million to MySJ Sdn Bhd – the private company operating the MySejahtera health app – from April 1, 2021, to March 31, 2023.

KUALA LUMPUR, October 4 – Parliament’s Public Accounts Committee (PAC) today revealed that the Cabinet has authorised an allocation of RM196 million to pay for MySejahtera services over a two-year period.

The sum, approved by Cabinet in November last year, consists of annual payments of RM98 million to MySJ Sdn Bhd – the private company operating the MySejahtera health app – from April 1, 2021, until March 31, 2023, according to the PAC’s inquiry into the development and procurement of the MySejahtera app under the Ministry of Health (MOH), Ministry of Finance (MOF), and Prime Minister’s Department (JPM).

The price ceiling was agreed following a series of negotiations carried out between the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU), on behalf of the government, and the app vendor from June 11 until October 1 last year.

The contract was supposed to be awarded to MySJ after the government’s one-year corporate social responsibility (CSR) deal with MySejahtera developer Entomo Malaysia Sdn Bhd (formerly KPISoft Malaysia Sdn Bhd) lapsed on March 31, 2021.

For context, Entomo Malaysia – which legally owns the software used to develop the Covid app – gave MySejahtera’s intellectual property rights to MySJ and granted MySJ a perpetual licence to use Entomo Malaysia’s “proprietary software” to develop and support the app in a 2020 deal that would take effect until 2025.

The government has been in negotiations with MySJ since.

Despite Cabinet’s approval of the allocation, the amount “has not been finalised”, according to meeting transcripts from PAC’s proceeding with Finance Minister Tengku Zafrul Aziz and Health Minister Khairy Jamaluddin on April 14, 2022.

Khairy said both the government and MySJ were still in negotiations at the time. The health minister pointed out that the RM196 million ceiling was less than the RM300 million sought by both Entomo Malaysia and MySJ.

CodeBlue previously reported court documents from a dispute among MySJ shareholders that showed an October 2020 licence agreement between Entomo Malaysia and MySJ, with the former transferring MySejahtera intellectual property and granting the app’s software licence to MySJ for RM338.6 million in a five-year three-month deal extending till end 2025.

Khairy also highlighted that the RM196 million two-year price cap for the MySejahtera deal was less than the United Kingdom’s estimated spending on NHS Test and Trace App for the year 2021-2022 at about RM418 million.

He added that the Home Ministry’s uCustoms system also cost an estimated RM284 million.

“Just to let you know about the MySejahtera system, how robust and agile we need it to be. We need a system that is constantly changing. We started with a small module but in the end, we had to balance between half a million vaccinations a day, data coming in every day. 

“Our highest vaccination daily rate was 500,000 vaccinations and 27 million check-ins. Can you imagine a system that – with all due respect, that is managed by the Information Management Division of the Health Ministry? I think it would crash. 

“So, that is why it was necessary, at that point in time, to have it outsourced. Whether or not we can do it after this – there won’t be 500,000 vaccinations every day after this, there won’t be as many as 27 million QR scans every day because even I will announce later that we won’t need to scan MySejahtera anymore. We can move towards a different model. 

“Maybe the cost is lower, but at that point in time, I want to give an idea to the Honourable Members, the kind of load that was expected of MySejahtera. It is very, very big,” Khairy told PAC members during a PAC proceeding on April 14.

Khairy has since announced the use of MySejahtera for organ and blood donation purposes, with the app’s functions expected to be continuously expanded.

Overall, the PAC believes that the RM196 million two-year allocation for MySejahtera is “high” and “contradicts” CSR principles that formed the basis of the government’s initial agreement with the app developer, Entomo Malaysia.

PAC chairman Wong Kah Woh had raised concerns about the possibility of recurring payments for MySejahtera during the proceedings, as reflected in the report.

“What we’re seeing here is that the ceiling allocation approved for the Health Ministry is RM196 million for two years. That means almost RM100 million every year. 

“We can expect that this MySejahtera app will be used beyond the next one or two years. 

“So, it may be extended to when these apps become so powerful, so widely used. I think everyone here can see that. So, we are talking about something like 10 to 15 years down the road perhaps. Every year, [the government spends] RM100 million. Perhaps we can invest this money to run the system in our own government,” Wong was quoted as saying.

The PAC suggests the taking over of the development and operation of the MySejahtera app by MAMPU who they believe has the necessary expertise and abilities as an information and communications technology (ICT) technical department.

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