After aborting passport tender, government to sign security printing deal with French firm

Anil Giri

In what is set to be the biggest deal signed by the KP Sharma Oli administration, the French government will be providing a soft loan of 200 million euros.

Published at : November 13, 2019Updated at : November 13, 2019 07:32Kathmandu

After abruptly cancelling a global tender for the printing and supply of 5 million e-passports, the government is now in the final stages of signing an agreement to set up a dedicated security printing press under a government-to-government arrangement with France.

This will probably be the biggest government-to-government deal signed since KP Sharma Oli was elected to office in February 2018.

The total cost of the deal is over 200 million euros, not including the facility printing banknotes, for where the French government will provide a soft loan. Details, including the financial arrangements, interest rate and time frame for repayment of the loan, have yet to be made public, but an announcement is likely this week, most probably on Thursday during a weekly press briefing by Communication Minister Gokul Baskota.

“We do not have the details about the signing of the government-to-government agreement but we are doing the paperwork right now,” said Rishi Ram Tiwari, spokesperson for the Ministry of Communication and Information Technology. “We hope all the exercises in setting up a security printing press will be out within a couple of days.”

The Department of Passports last week cancelled the multi-million dollar e-passport tender, hours before the deadline for bid submission. Officials told the Post that the tender had been cancelled on Oli’s direct intervention.

The deal is going to be signed at a time when a prerequisite security printing law has yet to be approved by the Cabinet. Several Cabinet ministers are in the dark about the deal, according to at least two senior government officials at the Prime Minister’s Office.

Former officials and experts, however, said that the government’s see-sawing on crucial decisions like these could severely tarnish the country’s image.

“If the government was going to set up the security printing press as announced in the annual policies and programmes, why did it call for tenders?” said Shanta Raj Subedi, a former finance secretary. “The whole episode is confusing. Cancellation of a global tender at the last moment has given a very bad impression to global bidders.”

A Cabinet meeting on November 6 decided to sign a new memorandum of understanding with Imprimerie Nationale, a French government undertaking, to set up a security printing press in Nepal.

The Department of Passports had invited bids as its stock of passports was dwindling and the timeline for setting up the security printing press was years away. However, according to the new deal, Imprimerie Nationale will supply all required passports and excise duty stickers until the security printing press comes into operation. Officials say it will take at least four years to set up the press.

“Without our own security printing press, Nepal will be left with no option than to buy or import passports and stickers once we run out,” said an official at the Ministry of Foreign Affairs. “It will make the project costlier in terms of paying the loan back to the French government.”

According to one official, the French firm will provide over 200 million euros in soft loan to the government of Nepal.

Printing banknotes is a costly affair because it needs bullet-proof infrastructure. The project cost could exceed 300 million Euros, said the official.

Subedi, the former secretary, said the government’s rash decision provides ground for suspicion. “The reasoning behind this government-to-government deal is not clear,” he said. “It is policy inconsistency. Cancellation of two biddings back to back gives ample ground to suspect something wrong.”

Acting upon the directives of Oli, the Department of Passports cancelled the e-bidding process on Thursday, with only around 750,000 passports remaining in stock and the present printing contract with the French supplier, Oberthur Technologies, expiring once the stock is over.

The Inland Revenue Department also cancelled the bids for printing excise duty stickers.

According to officials, whatever the deal, the country must not face a shortage of passports and stickers, and they should not be expensive.

The local representative of Imprimerie Nationale is Yeti Group, which belongs to the family of Ang Tshering Sherpa, who died in a helicopter crash in February.

The decision to sign the new agreement with the French firm has been kept under wraps but the Cabinet has already given the go-ahead to the Ministry of Communication and Information Technology to prepare an agreement paper for the multi-billion project with the French firm, two officials at the Prime Minister’s Office and the Ministry of Communication and Information Technology told the Post.

As a memorandum of understanding had already been signed between Nepal and France in March, prior to the global tender call, the government has decided to go for a government-to-government deal with France.

“But the memorandum of understanding we signed with the French firm has expired so if the government decides to sign a new understanding with France, we have to renew the previous memorandum,” said Bikal Poudel, executive director of the Department of Security Printing Centre. “Besides this, I do not have any knowledge about any government decision because it is up to the higher authorities.”

Officials at the Department of Passports said that since “higher authorities had cancelled the tender, they were now responsible for any shortage of passports”.

If the French company is unable to provide passports as per the requirements of the Department of Passports, the only option will be to extend the present contract with Oberthur Technologies. This, however, is impossible as Oberthur’s equipment is old and outdated, said officials.