Delayed and over budget NZ border system hits a milestone

The first tranche of a new, IBM-developed border management system is making progress, but debate rages about budget overruns, delays and transparency.
Written by Rob O'Neill, Contributor

It may be late and over-budget, but New Zealand customs minister Nicky Wagner has welcomed the Joint Border Management System (JBMS) reaching another milestone.

Nicky Wagner

Wagner said yesterday more than 50% of inward border transactions are now being processed through the Trade Single Window component of the system, which allows importers and exporters to submit shipment details electronically to a single point of contact, rather than dealing with several agencies.

The average transaction time is less than 30 seconds, she said.

“It is great traders are migrating steadily to the Trade Single Window, and the 673,000 inward transactions through it to date is ahead of the initial forecasts," she said.

Wagner said further elements of the JBMS will be added between now and December 2015.

In March the progress of the JBMS was debated in Parliament with National MP John Hayes responding to opposition claims the project was over budget and late.

"Two major change requests for tranche one were approved by the JBMS joint executive board back in 2012," Hayes responded. "Those change requests, which had an impact on timing and budget, were supported by industry.

"They were to, first of all, switch from a single delivery date to a longer-term phased delivery, more in keeping with modern IT practice, and, secondly, to incorporate changes in the World Customs Organization message format — WCO Data Model 3 — to ensure that the JBMS is equipped with world standard work flow into the Trade Single Window.

"The Joint Border Management System is now a multiyear phased programme of work, so there is no single finish date. It is like building a travel website. The first stage might tell you the flights you have got to book, and then later modules provide access to hotels, rental cars, insurance, entertainment, and the like."

"The Joint Border Management System is now a multiyear phased programme of work, so there is no single finish date."

John Hayes MP

Hayes said the approved capital budget in 2010 was NZ$75.9 million. Cabinet approved additional expenditure of NZ$8.9 million from within the existing Customs Service and Ministry for Primary Industries capital expenditure budget and an NZ$4.9 million transfer from operating funding to capital funding to give a total budget of NZ$88.7 million. NZ$77.2 million had been spent to the end of February.

Labour MP David Shearer said the Government was only telling one part of the story — the good part.

David Shearer

"What Mr Hayes and Mr Williamson did not talk about was the IT system that is going off the rails. It is going off the rails ... Let us have a look at this. First of all, the budget itself has gone up 17 percent. It may have been flagged, but it started off at NZ$76 million and it has now gone up to nearly NZ$90 million ...

"The big problem is that what was promised has not been delivered. What was promised under that NZ$90 million has not been delivered."

Shearer said there is a "major scrap" going on between the Customs Service and IBM.

"This is a debacle. It is something that is unfolding as we speak."

David Shearer MP

He said the total bill for the JBMS was more like NZ$204 million, $90 million of which is the capital expenditure.

"The rest of it is the operational expenditure, and it is supposed to finish in 2021, except it will not. It will not be able to achieve what it said it was going to achieve at the end of tranche one. We are left in the dark about what is going to be in tranche one because the papers cannot be released, but tranche two is not even ready to be implemented because it is not in any way ready to go.

"This is a debacle. It is something that is unfolding as we speak, and the Minister is desperately trying to cover it up and keep it out of the public eye."

A Customs performance report (pdf) last month highlighted delivering the JBMS as the agency's major challenge.

"This has consumed a lot of chief executive and senior management time, has proved to be more difficult than expected and there are complex issues yet to be addressed to fully implement and gain the planned benefits of JBMS," it says.

"There needs to be a continued and sustained effort to drive JBMS to completion. This work has been going on for some time and has been very difficult for the people involved."

In May, New Zealand's largest exporter, dairy processor Fonterra, announced it was using the Trade Single Window to submit export documentation in a world standard data format containing the goods and craft information required by international border agencies.

At that time, the Trade Single Window covers 100% of outward messages and 35% of inward messages, Using the JBMS will eventually become mandatory.

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