What were the risks borne by PSKIN under the concession agreement?

Question

Accepted Answer

PSKIN Bore Full Responsibility for Project Risks Under Concession Agreement

Prestariang SKIN Sendirian Berhad (PSKIN) was contractually obligated to bear all completion and execution risks associated with the National Immigration Control System (SKIN) project. The company was responsible for the entirety of the project's funding and execution throughout the 15-year concession period. This comprehensive risk allocation meant that PSKIN would absorb any financial impacts arising from various market fluctuations.
Financial Risks and Fixed Contract Value

Under the terms of the concession agreement, PSKIN accepted a fixed contract value for the entire 15-year duration of the SKIN Project. This fixed value was designed to encompass potential fluctuations in key economic factors. Specifically, PSKIN agreed to cover any changes in interest rates, foreign currency exchange rates, and the prices of IT hardware and software. This arrangement placed the burden of managing these financial volatilities squarely on PSKIN.
Payment Contingent on Successful Implementation

The financial obligations of the government were directly tied to the successful deployment of the SKIN Solution. Charges were only to become payable by the government after the system was fully implemented and operational at all designated immigration sites, both within Malaysia and internationally. This stipulation meant that until the project reached successful completion and implementation, the government was not required to make any payments to PSKIN for the development and execution phases.
Public-Private Partnership Structure

The SKIN Project was structured as a Public-Private Partnership (PPP) venture. In this model, PSKIN was tasked with the complete financing, building, operation, and maintenance of the system. The agreement also stipulated that PSKIN would ultimately transfer the system to the government upon the conclusion of the 15-year concession period. This structure highlights the significant upfront investment and ongoing responsibilities undertaken by PSKIN.

Reading history

Hide →

This history is cleared when the page is closed.

What were the risks borne by PSKIN under the concession agreement?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends