Jan 22, 2018

Sri Lanka’s E-passport project faces a legal tussle

Sri Lanka’s new bio-metric E-passport project is now engaged in a legal battle owing to the attempt made by the authorities to award the contract to De La Rue Lanka Currency and Security Print Ltd. (DeLaRue Lanka Ltd.) through a non-transparent and unsolicited single-source procurement process.

The Supreme Court has taken up for hearing a Fundamental Rights (FR) petition filed by the Sri Lankan company which is serving the Department of Immigration and Emigration (DIE) over the past 15 years in the supply of Passports and maintain of the Passport Printing System.

While the government is said to be spending Rs. 1.2 billion by granting the tender to De La Rue the petitioner has claimed they could do it for less according to international standards.

Epic Lanka Ltd (petitioner), the local company with 257 Sri Lankan IT engineers among its staff members has so far supplied approximately 8 Million Passports since 2003.

It is the ‘only’ company in Sri Lanka qualified to bid for International tenders for Passports and secure ID Cards, the FR petition filed by the company revealed

The petitioner pleads the Supreme Court to grant leave to proceed their case for the violation of Article 12(1) and 14(1) (g) of the Constitution by any one of 52 respondents cited in the petition

It has also urged the judiciary to issue an interim order suspending the operation of the project while preventing the authorities from entering into any kind of Memorandum of Understanding, contract, agreement, or such similar arrangement with DeLaRue Lanka Ltd to issue E-passports until the final hearing and conclusion of this application.

The petitioner prays for an appropriate order to call for open competitive tender for the award of the E-Passport Project in terms of the applicable Government Procurement Guidelines.

The petition claimed that the cabinet has been misled to give permission for the contract to be handed over to De La Rue Lanka Ltd.

Despite DIE’s systematic attempt to introduce an E-Passport, Information Communication Technology Agency (ICTA) together with the Ministry of Telecommunication and Digital Infrastructure (MTDI) proposed to the Cabinet committee on Economic Managements (CCEM) in early 2017 that they would undertake the task of implementing an E-Passport to Sri Lanka.

The E-Passport matter comes under the purview of Ministry of Internal Affairs and Wayamba Development. But this aspect was ignored by ICTA and MTDI, the petitioner alleged.

It has been revealed that the cabinet paper presented to hand over the contract to De La Rue Lanka Ltd had mentioned a tender process is Not needed as the 40 percent of the company's shares are owned by the Finance Ministry making it a state-affiliated company.

However, according to the petitioner, in spite of 40 percent of the shares being owned by the state De La Rue cannot be identified as a state-affiliated company.

They have also claimed that to be a state-affiliated company the state should obtain either 50 percent or more shares of the business.

A Cabinet Memorandum dated 25th May, 2017 was submitted by the Prime Minister seeking Cabinet Approval to proceed with the ICTA’s proposal to implement an E-Passport with DeLaRue Lanka Ltd.

According official documents, the President submitted his observations on the ICTA Proposal directing the authorities to submit a joint cabinet memorandum on E-Passport Project by the MTDI and the Ministry of Internal Affairs.

He also ordered authorities not to proceed with single source bidding to procure E-Passports even though government possess 40 percent stake in DeLaRue Lanka, but to call multiple bids or to call bids under ‘Swiss Challenge’ process.

Considering the observations made by the President, the Cabinet of Ministers met on the 13th June 2017 deferred the E-Passport Project subject, which was included in the Cabinet Memorandum No. 17/1093/702/002-XI submitted by the Prime Minister.

Despite the Cabinet Decision and the Presidents directives the then Managing Director of ICTA Muhunthan Canagey, moved a Board Paper on the 27th June 2017 (or on a closer date) to obtained Board Approval to enter in to a MOU between the ICTA and De La Rue Lanka Ltd to conduct a requirement study and to propose an E-Passport Solution for DIE, the petitioner claimed.