The federal government has ditched its controversial billion-dollar plan to outsource Australia’s visa processing platform after adopting a new policy that will see it develop a reusable enterprise-scale workflow processing capability.

Acting immigration minister Alan Tudge revealed the decision and the “new policy approach to the acquisition and delivery of workflow processing capability” amid the rapid escalating coronavirus pandemic late on Friday.

It comes more than two years after the Department of Home Affairs went looking for an external provider to design, build and operated a ‘global digital platform’ that would replace the country’s two existing visa processing platforms.

The platform, which was expected to be rolled out in 2021, was envisaged to process 90 percent of all visa applications, and integrate with other third-party systems to allow individuals to apply for visa as the point of booking travel.

Two consortia of bidders were vying for the deal – Australian Visa Processing, which consists of Ellerston Capital, PwC, Qantas Ventures, NAB and Pacific Blue Capital, and Australia Post and Accenture.

Home Affairs had repeatedly stressed the tender does not amount to outsourcing, as it would have seen the department retain “full responsibility and accountability for policy, security, risk assessment and visa decision-making”.

But last month a senate committee consisting of mostly Labor and Greens senators found the project did amount to privatisation, and recommended that the government scrap the outsourcing and build the system in-house.

On Friday, Tudge said the platform procurement had been terminated in light of the government’s “broad new policy approach to the acquisition and delivery of workflow processing capability” in Home Affairs and across government more broadly.

“The Government will implement modern, easy to access, digital services for clients in line with its response to the Thodey Review of the Australian Public Service,” he said.

“This approach seeks integrated enterprise-scale workflow processing capability that could be utilised across the Commonwealth.

“Key to this is recognising the efficiencies that can be generated from large-scale government investment in technology and the re-use of capability across government.”

Home Affairs is expected to conduct a market consultation process over the coming months for a “large-scale workflow processing capability for visa and citizenship applications and additionally, for Customs functions and personnel security clearances in the Home Affairs portfolio”.

“While current visa systems continue to function, they are out of date, and processing and decision making in many cases is still undertaken manually, supported by old technology and limited risk assessment capabilities,” Tudge said.

“With this approach, systems and capabilities will be well-placed to meet future demands, enabling the Government to respond to emerging global threats and improving service delivery across government.”

“The work the Department has done in recent years to modernise its visa service delivery arrangements will be utilised and extended to other areas in developing and specifying the requirements for this much broader capability, on which visa processing will still be the first product delivered.”