KATHMANDU, MAY 28
As Nepal prepares to select a new vendor to supply 6.4 million electronic passports later today, the Department of Passport (DoP) has come under intense scrutiny over what experts, insiders, and watchdogs allege is a procurement process mired in irregularities, favoritism, and possible policy-level corruption.
The selection process, which includes two critical procurement packages-one for the e-passport system infrastructure and another for the passport booklets-has alarmed transparency advocates and raised concerns about undue influence and manipulated outcomes, particularly in favor of French tech firm IDEMIA.
Financial bids for both packages are scheduled to be opened tomorrow. For Package I, which covers the electronic Machine-Readable Travel Documents (eMRTDs) system-encompassing pre-enrollment, data management, and delivery-two firms, IDEMIA and German company Muehlbauer, have been controversially invited in the opening of their financial proposals.
This decision comes despite the Department's own technical evaluation subcommittee flagging "significant non-compliance" issues with Muehlbauer and a major non-compliance issue with IDEMIA. The subcommittee had recommended further consultation with Nepal's Public Procurement Monitoring Office (PPMO) before proceeding. Instead, the DoP unilaterally moved forward with financial openings, a move that procurement specialists say raises serious red flags about the process's integrity.
For Package II, which includes booklet printing, personalization, and packaging, four vendors-IDEMIA, Veridos, Muehlbauer, and Polish company PWPW-have been listed for financial opening. However, two of these, Muehlbauer and PWPW, also reportedly failed to meet key technical requirements, leaving IDEMIA and Veridos as the only fully qualified contenders.
Yet, critics argue that the inclusion of non-compliant firms is a strategic maneuver designed to present an illusion of competition while ultimately steering both contracts toward IDEMIA.
A former Ministry of Foreign Affairs official, speaking on condition of anonymity, described the procurement as a "long-running saga" where a single vendor has maintained a "chokehold" on critical government agencies like Department of Passport. "Every time transparency is questioned, the Ministry and the DoP label it a conspiracy to derail progress," the official said. "But their actions speak otherwise."
Deliberate Delays, Costly Variations
The Department's failure to initiate tenders in a timely manner has also been called into question. In 2023, despite knowing that passport stocks were depleting, the DoP issued a variation order to IDEMIA for an additional 2 million passports. That move, now criticized as a stopgap to avoid competitive tendering, effectively stalled fresh procurement efforts for over a year.
The variation contract, executed via a direct Cabinet decision, was priced at $ 10.13 per booklet, leading to a total contract value of approximately $ 31 million-an increase of more than 146% over the original 2020 contract. This deal, flagged by the Auditor General in its 2024 report, is now being viewed as one of Nepal's largest public procurement anomalies in the IT sector.
IDEMIA originally won the 2020 contract to supply 2 million passports and deliver IT infrastructure, including the enrollment and biometric systems. At the time, the contract was valued at $ 21.1 million, with around $ 2.4 million allocated for IT components. Critics argue that this infrastructure was already delivered and paid for-yet is now being re-procured in the ongoing tender.
Double Dipping and Inflated Costs?
According to IT experts, the actual cost of items under Package I should not exceed Rs 500 million - approximately $ 3.8 million. However, the DoP has reportedly pegged the value at Rs 2 billion, suggesting an overestimation of Rs1.5 billion. This includes a re-purchase of 245 licenses for enrollment software and ABIS (Automated Biometric Identification System) worth over Rs 500 million, despite these being part of the original 2020 procurement.
"This is a textbook case of policy-level graft," said a Kathmandu-based cybersecurity analyst. "The cross-discount clause that allows vendors to offer a price reduction for winning both packages disproportionately benefits IDEMIA, which already supplied the systems. It's a clever mechanism to corner the entire project."
The Human Cost of Corruption
While procurement controversies often dominate headlines in large-scale infrastructure or defense deals, the passport issue strikes at the core of daily public service. Nepalese citizens rely on passports not only for travel but also for employment opportunities abroad and essential identity verification. Any delay or disruption in supply directly affects the public.
The DoP's procurement strategy-criticized for lack of foresight, last-minute variations, and opaque evaluation criteria-has raised concerns that the department is manufacturing urgency to justify pre-decided outcomes. Observers argue that this creates a false dichotomy: either re-appoint IDEMIA or risk national chaos.
A Test for Accountability
As the financial envelopes open on May 28, the question facing Nepal's government is no longer just about selecting a vendor-but whether it can ensure public trust in its procurement systems.
"If the DoP gets away with this," said the former foreign ministry official, "it sets a dangerous precedent. We are not just losing money-we are losing accountability."
As Nepal grapples with rising corruption concerns, recently landing on the Financial Action Task Force (FATF) grey list for failing to strengthen financial regulations, critics are pointing to what they call a double standard in how Western nations address graft-especially when their own firms are involved.
Global watchdogs like Transparency International have repeatedly ranked Nepal poorly on corruption indexes, prompting swift warnings and punitive measures from the West. Yet, observers argue that when Western firms engage in questionable practices within developing nations like Nepal, the response is muted or absent.
"There's a clear hypocrisy," said a Kathmandu-based governance expert. "The West is quick to punish countries like Nepal, but remains silent when its corporations are part of the problem."
The debate has resurfaced amid growing scrutiny over French firm IDEMIA's dealings with Nepal's Department of Passport-highlighting the complex interplay between global accountability and local governance.
The Prime Minister's office, office of the Foreign Minister, Parliament, procurement watchdogs, and civil society now face a critical test. Will they step in to demand transparency-or let a flawed process quietly pass?
Despite repeated attempts, DG, Department of Passport and Spokesperson for the Ministry of Foreign Affairs could not be contacted for comments.
