Nepal seeks German Embassy’s help over e-passport debt — Kathmandu Post
The Nepali government has approached the German Embassy in Kathmandu for help in resolving a dispute with German company Muehlbauer ID Services GmbH, which operates the country’s electronic passport system. The state owes the company about 300 million Nepalese rupees, but is withholding payment due to ongoing court proceedings in a corruption case. This was reported by Kathmandu Post.
During a virtual meeting with company representatives, Nepal’s Foreign Secretary Amrit Bahadur Rai said that the government is ready to fulfill its payment obligations but is currently unable to transfer the funds. According to him, the Commission for the Investigation of Abuse of Authority and the Office of the Attorney General advised against making the payment or allowing Muehlbauer to open letters of credit until the case is resolved. Rai also said that the German Embassy had responded positively to the request, without specifying a possible mechanism for settling the dispute.
Risk to passport services
Muehlbauer warned that it may suspend operations if the authorities do not settle the debt. The company provides applicant pre-enrollment, biometric data collection, data management, and passport issuance systems. A suspension of its work could disrupt passport processing across the country.
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Muehlbauer employees involved in work with the Department of Passports also warned of a possible strike over unpaid salaries. Internet provider Subisu, for its part, threatened to discontinue services over unpaid bills.
Court case and contract terms
On June 23, the Commission for the Investigation of Abuse of Authority filed a corruption case against 18 people, including the former director general of the Department of Passports, government officials, and local representatives of Muehlbauer and Veridos GmbH. The defendants were later released from custody by decision of the Special Court. Nepal’s Supreme Court also ruled in favor of the German companies, but the Special Court has not yet issued a final ruling in the corruption case.
Under the contract, the Department of Passports must pay the supplier within 30 days of receiving the system commissioning letter. The first payment stage amounts to approximately 300 million rupees: 85% of the sum must be paid in foreign currency, while the remaining 15% must be paid in Nepalese rupees. Officials are also discussing the possibility of separately transferring 45 million rupees, the local-currency portion of the first payment.
