IT vendor points to government pay delay

PUBLISHED : Thursday, 29 June, 2006, 12:00am
UPDATED : Thursday, 29 June, 2006, 12:00am

The firm that provided e-channel systems to the Immigration Department claims the government has so far paid it only $2 million despite it having installed millions of dollars worth of equipment.

Michael Hall, commercial manager of ATAL Technologies, which is being sued by Singaporean subcontractor Stratech Systems for non-payment and copyright infringements, said his company had 'great difficulty' in paying Stratech the $13 million already paid.

A Stratech manager said the company understood it had not been paid because the Immigration Department had paid ATAL only $2 million.

Stratech is claiming more than $34 million in unpaid service and equipment costs, fees and damages, according to a writ filed at the High Court on Tuesday.

Mr Hall insisted ATAL had paid Stratech more than it was obliged to, and there was no question of intellectual property rights infringement because the government became the owner of the equipment once it became operational.

Stratech also claimed in the writ that the licence for the software expires on June 30.

Mr Hall said: 'If they say they have inserted something which may stop the system working after June 30, that will not happen. We have developed our own software. We had to because we terminated their contract before they had completed the work.'

ATAL won a government tender to supply, install and maintain passenger and vehicle clearance systems for the Immigration Department in March 2004, involving an estimated 10-year cost of $595 million.

The system has been operating for 18 months.

A spokesman for Stratech said yesterday that infringing on a subcontractor's intellectual property rights was likely to 'scare' other overseas companies from taking up contracts in Hong Kong.

A government spokesman yesterday said the matter was between the two firms, and that the government had 'fully discharged our obligations arising from the contract signed with the prime contractor'.

Stratech chief executive Lam Wei Choong said: 'We would have wished for more governmental intervention in sorting out the dispute, but ... we were left with no choice but to turn to the Hong Kong courts to seek ... redress.'