Iris set to secure GST refund job from Govt

IRIS Corp Bhd is on the verge of announcing a concession-based job to manage the Government’s system of goods and services tax (GST) refunds for foreign travellers to Malaysia.

According to sources, the company, which is widely known as a smart-card based security solutions provider, was short-listed as one of two parties vying for the 5-year concession deal from an initial list of four parties.

As at yesterday, a decision to give the job to Iris had been made and the company has been informed, according to one source familiar with the matter.

When asked, managing director Datuk Tan Say Jim does not elaborate but notes that an announcement on the outcome of the tender should come out soon in view of the Government’s plans to implement the GST next April.

“The announcement has to come out at least before the end of October or there will not be enough time to set up the infrastructure required for the entire system,” Tan says.

Iris, which has been involved in implementing the Malaysian Electronic Passport (MEP) and MyKad among other electronic-based Government services , said in April that it had entered into an agreement with Swiss-based Global Blue SA to form a joint-venture firm for the purpose of participating in the tender for this GST refund job.

The other short-listed contender for it, it is understood was ManagePay Systems Bhd, which partnered South Korea’s Global Tax Free Co. The remaining two parties which submitted bids are private companies who had also partnered firms with wide GST expertise, which was part of the bidding requirements.

Tan says no specific value can been attached to the job for now as it will have to depend on the number of travellers  who will use the system.

“It is too early to discuss value at the moment.”

For now, he says Iris is also focused on its fairly new business ventures which fall under what the company calls its sustainable development division.

He says Iris’ current strongest revenue contributor – its identification (ID) solutions segment - will eventually be replaced by its sustainable development division which is also where its property development business is housed.

“In about three years, our sustainable development division should become our largest revenue contributor.”

Toward building up its revenue contribution from this division, the company, which has obtained the rights to develop land measuring about 730 acres in Papua New Guinea (PNG), has launched Phase 1 of a high-end housing project there comprising 50 units of houses.

According to Tan, all the 50 units have been taken up, thanks to a growing demand for housing by the large expatriate community there who work for the country’s growing oil and gas industry.

The entire high-end project will comprise a further 250 double and single-storey houses and is located about 15 km from the city centre. The project will have a total gross development value of about RM300mil.

Profit margins in PNG generally come in double-digits, due to the lack of ‘“quality” housing there, Tan says.

That’s not to say that there is no competition. He says companies are discovering the business opportunities that are available in PNG, notwithstanding the risks.

Also on the plate for Iris in PNG, is the development of a major township where it plans to include “a state-of-the-art secondary school and art technical college.”

Initial works on this should start in about 90 days, says Tan.

Iris’experience in property development dates back to about two years ago starting with the Rimbunan Kaseh project where together with the Government and using its own technology, it developed homes for villagers in rural Malaysia which came with integrated farming facilities to enable the villagers to support themselves.

Iris is currently loss-making, reporting a net loss of RM2.6mil for its first quarter ended June 30.

Revenue for the period however was RM127.3mil although this was lower compared to the revenue of RM133.9mil generated for the same period a year ago.

Its stock is up about 43% to 40 sen since the beginning of this year but is far from its year-to-date high of 61.5 sen reached in February.

The company’s main divisions are its “trusted” ID, payment and transportation, food security, KOTO industrialised building system (IBS), environment and renewable energy, sustainable development and education segments.

Felda Investment Corp is its single largest shareholder with a 25.80% stake followed by Perbadanan Nasional Bhd with a 6.48% stake.