Nepal adopted machine readable passports by replacing old handwritten passports in 2010, but the process of adoption of the new passports has never been free from controversy.

Dispute began right at the start with the tender and procurement process, which forced a re-tender of passport procurement in 2009-10.

Since that time, the France-based company, Oberthur Technologies, which later merged with Safran Identity and Security (Morpho) to form OT-Morpho, now known as IDEMIA, had been printing machine-readable passports for Nepal for almost a decade.

Then, the government of Nepal, in line with the International Civil Aviation Organization (ICAO) guidelines, decided to move towards more advanced biometrics or e-passports, and started distribution in November 2021.

Noted historian Satya Mohan Joshi received the first e-passport on November 17, 2021. But, prior to this, the global tender process for procuring and installing the e-passport system had to be canceled thrice between 2019 and 2021. The tender process was completed on the third attempt and again, the same French company, IDEMIA, won the bid.

During the transition, according to a foreign ministry official, the government “cleverly” allowed IDEMIA to print additional passports under a “verification” process to avoid supply disruptions.

“The decision to allow IDEMIA to continue printing passports was taken to avoid shortages, which could spark public ire or vandalism,” the official told the Post.

As per the conditions of the 2020 tender, IDEMIA has already supplied over five million passports.

After much delay, on November 28, 2024, the Department of Passports called for a new global tender to print an additional five million passports by splitting the contract into two packages.

The almost a year-long delay in issuing the tender, even as the old stock of passport copies has dwindled, may compel the government to allow IDEMIA to print additional copies under the existing agreement to meet the requirement.

The first package includes procurement of eMRTDs systems including pre-enrolment, enrolment, data management and delivery. And the second package involves “eMRTDs booklet with personalisation, quality control and packing system.”

The total budget of the new contract is around Rs 12 billion where the winning bidder should provide five million passports within the designated time frame.

After several complaints were lodged with the Commission for the Investigation of Abuse of Authority [the anti-graft agency], the Public Procurement and Monitoring Office (PPMO) and the Department of Passports itself, the department has extended the deadline for the submission of applications to February 11, according to a notice issued by the Department of Passports.

“We extended the submission deadline due to the Christmas and New Year festivals,” said Tirtha Aryal, the director general at the department. He dismissed allegations of favouritism in the bidding process and claimed that the process is in line with past practices, the procurement law and other standards set by the World Bank and Asian Development Bank.

“We are encouraged by the interest shown by 19 security printing companies, whose representatives attended a pre-bidding meeting on December 19,” said Aryal.

But complaints from bidders have cast a long shadow over the process. On December 17, Germany-based security printer Augentic Gmbh wrote to the secretary at the Public Procurement Monitoring Office (PPMO) alleging that tender conditions were tailored to favour a specific company.

The letter, a copy of which was seen by the Post, stated that “being in the global market and having experience with the capabilities both in technical and on reference level, analyzing these tenders (both packages) brought us to conclusion that both projects (both packages) were not launched to secure fair competition in the interest of the government of Nepal but were tailored to one specific preferred company.”

Commenting on the matter, Aryal, the director general of the Department of Passports, said, “If someone is dissatisfied with the tender process, they are free to lodge complaints. But certain vested interests and groups appear intent on disrupting the process. We are transparent.”

According to Augentic’s letter, the tender document for both packages contain clauses that appear to be tailored. These include mandatory in-house capabilities for AIBS (a kind of accreditation), system and booklet production; a prohibition on joint ventures, excluding collaborative approaches; and restrictive financial and technical requirements that align with the profile of one provider. The company further alleged that these conditions would enable this sole provider to strategise across both projects to the great financial disadvantage of the Nepal government.

The company also mentioned several clauses it had reservations about, describing them as hidden requirements that give a clear advantage to one particular company.

This is so one-sided [approach] that it will stop a big majority of serious companies from even trying to bid, the German company said, while urging the ministry to cancel the process and relaunch a new bidding process.

On December 23, CETIS, a Slovenia-based security printing solution company, also wrote to the Ministry of Foreign Affairs suggesting nine different amendments so that it could participate in both packages.

Similarly, the United Arab Emirates-based E7 Security, whose legal name is United Printing and Publishing, wrote to the Department of Passports on December 22. It stated that “upon reviewing the bidding document issued by your esteemed organization, we noted that bidders are restricted from participating in a Joint Venture (JV). We wish to inform you that Joint Ventures is globally recognized as a way to leverage the strengths of bidders, creating synergies that greatly benefit project execution. This model has proven to be immensely advantageous for purchase worldwide.”

The company requested amendments to over half a dozen clauses in the tender document and provided feedback and recommendations.

HID Global, a US-based firm, filed a complaint with the Commission for the Investigation of Abuse of Authority, asking it to instruct the Department of Passports to remove several clauses from the tender document and adhere strictly to the guidelines of the Public Procurement Monitoring Office (PPMO).

The PPMO itself wrote to the department on December 17, addressing several complaints it had received. It instructed the department to clarify on the issues raised, including complaints forwarded by the CIAA.

Officials told the Post that Foreign Minister Arzu Rana Deuba and Foreign Secretary Amrit Rai are fully aware of the reservations of various companies. They have instructed the department to ensure fairness and transparency in the passport procurement process, and also stressed the need for ensuring uninterrupted passport distribution.

“We don’t have a standard format for issuing tender calls. If a company fails to meet our requirements, we can cancel the tender and confiscate the deposited amount,” the foreign ministry official said. “It takes 18-20 months for the winning bidder to supply passports. But we cannot stop passport distribution even for an hour.”

Meanwhile, Aryal reiterated that no company was being favoured and said, “We have ensured a level playing field for all firms. If IDEMIA had won the contract through illegal means or had been unfairly favored by the department, then that would be a cause for concern. But we have hired a good consultant and prepared the best tender documents.”

"According to existing legal provisions if a supplier fails to meet the obligations, we can levy liquidated damage, or can even terminate the contract, but that will not serve our requirement of supplying passports smoothly. We will need at least 15 to 20 months to procure a new supply, and we cannot assume to disrupt the service for longer. Passport has to be supplied as a critical service, we have to revise existing legal provisions to make them compatible with the procurement of such a critical service," said Aryal.

He said that the current stock of passports is almost depleted and the IDEMIA’s contract to supply five million passports will expire soon.

On busy days, the passport department distributes over 6,000 passports. Besides the department, all 77 district administration offices and all Nepali embassies abroad also distribute passports.

“We cannot stop passport distribution even for a single day,” said Aryal. “As so many people rely on us for new passports and renewals, while we must ensure fair and transparent bidding, we should also make sure the passport distribution process is not interrupted.”

It is also true that IDEMIA might have an advantage as it has been printing and supplying Nepali passports for over a decade, said an information technology expert who is working with the government. “But the question is whether we have met the standards set by the ICAO and ensured that the passports are secure and foolproof.”

Former deputy prime minister and foreign minister Narayan Kaji Shrestha blamed the delay on former foreign minister NP Saud, saying that Saud did not move forward or sign documents that would have allowed the foreign ministry and the passport department to go for a fresh tender.

The file was pending for nine months, claimed Shrestha.

When Saud was the foreign minister, some countries had pushed for a government-to-government deal for passport procurement, but that plan did not succeed. After this proposal stalled, preparations for a global tender process for passport procurement began.

“There could be monetary motives involved, that is why passport procurement always lands in controversy,” said Shrestha, who led the foreign ministry twice in the past. 

The story has been updated for clarity.