Malaysian Firm Battles Nigerian Govt Over Multibillion-naira Passport Booklets Contracts

A directive by the President Muhammadu Buhari, in 2019 that the Nigerian passport booklets should be produced locally has not been carried out two years down the line.

It was gathered that the delay was due to the inability of the Ministry of Interior to terminate the contract awarded to Smart Technology Nigeria Limited for the production of the passport booklets.

Smart Technology Nigeria Limited works in partnership with its parent company, Iris Corporation, based in Kuala Lumpur, Malaysia.

The e-passport booklets are produced in Malaysia, but the Nigeria Immigration Service activates the passport through the biometric data transfer.

It was gathered that the Ministry of Interior and the NIS officials have been holding meetings with ISTL for over one year on the termination or variation of the contract valued at over $138, 443, 740, signed in May 2003.

The situation has led to the scarcity of passport booklets as ISTL has reportedly suspended production of the booklets following moves by the Nigerian Government to cancel its contracts and commence local production of the travel document.

An impeccable source said the Nigerian Government was facing serious legal challenges terminating the contracts which had no terminal date.

The official stated, “What I can tell you authoritatively is that the issue has been enmeshed in some legal tangle which they are trying to untangle. They discovered that previous administrations had committed the country to unfavourable contracts which may even be for life. Everybody has been on tenterhooks over it.

“What the government is doing now is to resolve the legal conundrum and I think they are almost done with it. They would be making arrangements for local producers of the passport (booklets) after sorting out the problem.’’

Documents obtained indicate that the Nigerian Government entered into six agreements with the contractor between March 2003 and April 2015 for the production of e-passports.

The first contract was in three phases with the first phase costing $62,881,800 (over N10bn), while the second phase costs $53,337,470 (over N9bn) and the third phase, $62,881,800 (over N10bn).

The contract, which included the implementation of the Nigeria Harmonised ECOWAS Electronic Smart Passport and Autogate, was for the production of 5.5 million wafers and laminates for incorporation into the back cover of passport booklets, supply of Electronic Passport Management System, comprising the Passport Enrolment and Issuance System, Automated Fingerprint Identification System, Passport Personalisation System, Immigration Border Control System and Immigration Reporting System.

Checks indicate that the Nigerian Government did not commit any funds to the project, leaving the contractor as the sole financier of the contract.

ISTL reportedly took a loan of N3bn in 2003 to fund the implementation of the project.

The agreement states that ISTL shall bear, pay and thereafter be reimbursed by the Ministry of Interior with all withholding taxes, VAT, duties, fees, levies and other charges connected with the execution of the agreement which did not contain any renewal clause.

However, on March 1, 2007, the Ministry of Interior and Iris Smart Tech signed another agreement for the production of three million machine-readable passport booklets and the embedding of the substrates.

The booklets were to be supplied at a unit price of N690.08, totalling N2,070,240,000.

According to the agreement, the settlement of the company’s invoices was to be made from 30 per cent of the revenue generated from the passport sales.

The ministry was to make an advance payment of 25 per cent of the project cost while ISTL was expected to provide technical and management training to NIS officials.