Details have emerged that for every passport booklet issued, Malawians get a raw deal as the government makes a profit of between K30 000 and K117 000 largely due to overpricing.
Documentation The Nation has seen shows that Techno Brain Global FZE, the supplier of passport booklets to the Malawi Government, sources the booklets from Vienna, Austria where the average unit cost of each booklet is $9.13 (K7 221.83) and from Singapore where the cost is around $1.73 (K1 368.43) per booklet.
The supplier, on the other hand, sells each booklet to the Malawi Government at $76 (K60 166), including supply of 1 600 units of ink ribbons and 1 600 crystagrams—a series of holographic images—required for the printing of e-passport booklets.
Rough calculations show that Techno Brain makes a profit of $74.27 (K58 708.02) and $66.87 (K52 894.17) per passport booklet supplied to the Malawi Government. Markups in the price include costs of freight.
The e-passport fee structure issued by the Department of Immigration and Citizenship Services shows that an ordinary passport of 36 pages obtained under normal service is at K90 000 while the 48-page one is at K130 000.
Express service for the 36-page booklet is at K160 000 and K180 000 for the 48-page booklet while replacement for a lost or damaged booklet fetches K150 000 and K170 000, respectively.
In March 2019, the Malawi Government under the Democratic Progressive Party (DPP) administration entered into a $60 million (K47.4 billion) contract with Techno Brain Global FZE of United Arab Emirates (UAE) to upgrade the country’s passport issuance system and introduce electronic passport under the Build, Operate and Transfer (BOT) model.
Through the Department of Immigration and Citizenship Services, the Malawi Government contracted Techno Brain Global FZE to provide the upgrading services and introduce 800 000 electronic passports under procurement reference number IM/01/272/07.
The contract time-frame is 42 months from the date of signing the contract with the first six months being the installation period followed by 36 months for the issuance of electronic passports.
Government granted the UAE company the contract award letter dated February 21 2019 under reference IM/01/81/VII before officially signing the contract on March 22 2019.
Former Ministry of Homeland Security Principal Secretary (PS) Sam Madula signed on behalf of Malawi Government while former Department of Immigration director general Masauko Medi, now PS in the ministry, signed as a witness.
Techno Brain Global FZE director responsible for identity management Raghunandan Gopalakrishna signed on the company’s behalf with their regional sales director Shaunak Ganguly signing as a witness.
The contract documents show that Techno Brain Global FZE would be selling each copy to government at $76 or K60 166 at the current exchange rate of K791 to the dollar.
To date, Malawi has bought 215 327 passport booklets against the 800 000 stipulated in the contract.
Revelations of the low cost of passports come against the background of Tonse Alliance partners, UTM Party led by Vice-President Saulos Chilima, promising to reduce the cost of passports to K14 000 during the campaign for the court-annulled May 21 2019 Presidential Election.
During the campaign for the court-sanctioned fresh presidential election held on June 23 2020, the promise of low-cost passport also loomed large after Chilima paired with Malawi Congress Party president and eventual winner Lazarus Chakwera.
In Parliament last Wednesday, Nkhotakota North East legislator Martha Lunji Mhone Chanjo (DPP) asked the President when Malawians should expect the cost of passports to come down to around K14 000.
In his response, Chakwera said that upon assuming power, the nine-political party Tonse Alliance administration discovered that its predecessor “entered into contracts that were in favour of people they would contract and not in favour of the people they were serving, who are Malawians”.
He said: “These contractual arrangements and many others are some of those issues that I have mandated the Vice-President to look into because this country is being defrauded by its own people in leadership.”
While referring The Nation to Ministry of Homeland Security and Department of Immigration and Citizenship Services, Ministry of Finance spokesperson Williams Banda said it was important to appreciate how the BOT model operates.
He said: “There is nothing that comes from Treasury. Under the BOT model, a company invests in the infrastructure, operates it until they offset whatever they invested in the system then they will handover to government.
“We are not paying anything to that system. The only thing we are doing is to ensure that it is properly implemented.”
But on page 34 of the 36-page contract, there are payment schedules and terms which show that the Malawi Government will pay Techno Brain Global FZE $20.26 million (about K16 billion) each year into its Standard Chartered Bank account number AE 97044000010122311020 held in Dubai for the three years.
The amount will be split into four installments of $5.06 million (K4 billion) first year, six installments of $3.37 million (K2.6 billion) in second and third years of the contract.
We tried to contact the head of Techno Global FZE Brain, Mahesh, using his Kenya-registered mobile number, but he did not respond.
In a written response, Ministry of Homeland Security spokesperson Andrew Nyondo yesterday said the ministry in collaboration with its stakeholders will review the contract to assess the way forward.
He said passport fees would have been reduced sometime back if it were not for the contract with Techno Brain.
Nyondo said the BOT model meant that passports produced under the contract are financed from the passport proceeds. He added that the passport fees cover blank passport books, e-passport consumables and other administrative costs such as Internet connectivity and e-passport system software licences.
Civil society organisations have since called for an immediate review of the contract, describing it as an abuse of the taxpayers.
Human Rights Defenders Coalition chairperson Gift Trapence said the contract was not made in the best interest of citizens; hence, should be reviewed and terminated.
He said: “This is pure theft which Malawians must not accept. We are, therefore, asking the Tonse government to free citizens from this bondage of exorbitant passport charges.
“If this contract is cancelled today, Malawians will start paying for passports as low as K14 000 as Tonse Alliance promised during the campaign period.”
While applauding the idea to upgrade the country’s passport system and the introduction of the e-passport, Robert Mkwezalamba, chairperson of the CSOs-led Black Economic Empowerment Movement, described the contract as “shocking”.
Catholic Commission for Justice and Peace national coordinator Boniface Chibwana said it was “unfortunate and inconceivable” that government entered into such a contract when it could have done a proper mapping of the suppliers to save resources.
“There is need to review this contract, where possible, for there seems to be elements of rent-seeking. Therefore, as a service provider, the government has no justification to charge exorbitantly for the passport when it was possible to source the commodity at a very cheap price,” he said.
The K14 000 passport fee promise has often come under spotlight in Parliament.
During the recent Mid-Year Budget Review Meeting of Parliament, DPP spokesperson on finance in Parliament Joseph Mwanamvekha asked government when “the promised K14 000 passport” will be introduced.
In response, Minister of Homeland Security Richard Chimwendo Banda said progress was being hampered by a contract the DPP administration had signed with the supplier of passport books.