KUALA LUMPUR (March 6): Malaysia’s state pension fund is seeking to revive a RM3.5 billion (US$856 million) project by offering to lower the cost to the government, according to people familiar with the matter.

Kumpulan Wang Persaraan Diperbadankan, or KWAP, is asking the government to bring back a project to build an immigration control system that was awarded to Prestariang Bhd, said the people, who asked not to be named as the talks are private. The pension fund for civil servants holds a stake in Prestariang, whose shares have lost 73% in the past year.

Prime Minister Mahathir Mohamad has been willing to revive major projects at lower cost, after canceling a swathe of them, amid efforts to curb the budget deficit. Malaysia is nearing a deal with China to reduce the scale of the US$20 billion East Coast Rail Link, and it agreed to resume a mass rail transit project after contractors MMC Corp and Gamuda Bhd cut the price tag by 22%.

Representatives for Prestariang and KWAP, the country’s second-largest pension fund, declined to comment.

Representatives from the finance ministry and the home affairs ministry didn’t immediately respond to requests for comment. KWAP proposes cutting the cost of the project, known as SKIN, by 17% to 2.89 billion ringgit, and increasing its stake in Prestariang if the project is revived, according to the people. The fund has sold 12.6 million of the company’s shares since SKIN’s cancellation was announced on Dec 12, lowering its holdings to 5.27%, from 7.82%.

A state-commissioned review led to a recommendation to revive the SKIN project, according to a report by an agency known as MAMPU, which oversees the government’s digital initiatives. SKIN is set to be ready in two years and will lower costs in the long run, while a new project would take up to five years to get up and running, despite most of the current immigration system coming to its end of life by 2020, according to the six-page report obtained by Bloomberg.

https://www.theedgemarkets.com/article/kwap-said-seek-revival-rm35-bil-border-deal