Transport Minister Anthony Loke Siew Fook said HeiTech Padu Bhd was awarded the RM190 million contract from the road transport department (JPJ) before Farhash Wafa Salvador Rizal Mubarak became a substantial shareholder in the firm.

Loke said the ministry's board of acquisitions agreed on Nov 24 that Heitech Padu's bid for the maintenance of JPJ's MySikap system and IT infrastructure was the lowest and most reasonable.

"This acknowledgement was submitted to the finance ministry for its final approval on Dec 4 and the Treasury's approval was given on Feb 8 for a value of RM185 million, excluding service tax," he told reporters in a press conference today.

Loke said the matter was brought up by Prime Minister Datuk Seri Anwar Ibrahim in the Cabinet meeting earlier today, due to insinuations that the project was awarded to HeiTech Padu over Anwar's ties with Farhash.

Farhash was formerly Anwar's political secretary, before the latter was appointed as prime minister.

HeiTech Padu announced on Monday that it had signed the letter of award from JPJ for the RM190 million three-year contract which commences on May 1.

On March 14, the technology services firm said Farhash had acquired an indirect interest of 15.9% (16.1 million shares) in the company, making him a substantial shareholder of HeiTech Padu.

The contract extension to HeiTech Padu Bhd, granted with the consent of the Finance ministry, covers critical services such as preventive maintenance, cybersecurity, and software license renewal, with a total mobilisation value of RM 54.32 million Loke added.

He said the company offeres maintenance and technical support services contracts for MySikap and the Main Framework System Hardware & Software (Mainframe) across all offices of the Road Transport Department (JPJ) Malaysia.

He explained that MySikap serves as a vehicle and driver information system, facilitating online services such as motor vehicle registration, driver's license renewal, and motor vehicle license issuance, encompassing over 1,300 types of transactions.

The Mainframe, on the other hand, acts as server hardware storing MySikap data.

"In retrospect, the Ministry of Transport (MOT) decided in 2014 to separate the MySikap and Mainframe contracts, with negotiations ongoing.

"In March 2023, JPJ proposed merging the two components into one tender for better project management," he said

During the transition to merge the service tenders, MOT decided to extend the Mainframe and MySikap contracts until April 30, 2024, with a mobilisation value of RM 27.29 million for Mainframe and RM 27.03 million for MySikap.

Notably, the contract extension focuses on critical services at a lower price than the original contracts, while efforts to improve the existing maintenance tender merger contracts continue.

An open tender for the merger of the two services was initiated on June 21, 2023, with three companies participating.

After evaluation, HeiTech Padu emerged as the recommended offer by the MOT Procurement Board based on reasonable pricing and fulfillment of all valuation stages.

The Finance ministry granted final approval on Dec 4, 2023, with its approval obtained on February 8, 2024, for a value of RM 185 million (excluding service tax), below the estimated ceiling price of RM 207.3 million.