Nepal UK
A German contractor has given Nepal's Department of Passports until Monday to pay about Rs300 million. Nepalese abroad who rely on passport renewals could feel the effect.
Muehlbauer ID Services, one of two German firms running Nepal's new e-passport system, has told the Department of Passports it may suspend services unless it receives about Rs300 million by Monday 12 October, the Kathmandu Post reported on 10 October. The sum is the first payment milestone under the contract. Because passports underpin visas, residence applications and travel for Nepalese overseas, delays in Kathmandu can reach people in the UK.
The dispute
Veridos and Muehlbauer won the contract last year, replacing IDEMIA, which had supplied Nepal's passports for roughly 15 to 17 years (the Post and The Himalayan Times differ on the exact figure). They began printing and distributing passports on 13 July, per the Post. The contract specifies payment within 30 days of a commissioning letter, split 85 per cent in foreign currency and 15 per cent in Nepali currency, with late-payment interest capped at 10 per cent of the contract value.
The department has not paid. Its spokesperson, Dipak Banjade, told the Post that the pending court case and a lack of response from the anti-graft body (CIAA) and the Attorney General's Office had complicated payment. Officials are considering releasing only the local-currency portion, about Rs45 million. Earlier deadlines of 30 September and 7 October passed.
The legal background
On 23 June the CIAA filed a corruption case against 18 people, including a former director general of the department and local representatives of the two German firms. The Post reports that the Special Court released the accused and the Supreme Court ruled in the companies' favour, but the Special Court has not issued a final verdict. The Himalayan Times reported on 22 September that the Supreme Court dismissed three petitions by IN Groupe (formerly IDEMIA) challenging the award. Nobody has been found guilty. NepalUK has not seen a response from the German firms to the corruption allegations.
Operational effects so far
Nepal News reported on 1 October that biometric services stopped for a time when the distribution server failed, which officials attributed to connectivity. It also reported that 234,196 applications had been received and 92,684 passports distributed, and that officials warn of a shortage within two months if supply stops. These figures come from one outlet and could not be cross-checked here. Muehlbauer's staff have threatened a strike over unpaid salaries, and the internet provider Subisu has threatened to cut service over unpaid bills, per the Post.
What Muehlbauer says
The company says it has met its obligations, may withhold performance or terminate the contract, and has reserved its rights under the 1986 Germany–Nepal bilateral investment treaty (Kathmandu Post). These are the company's claims and are not established findings.
What it means for Nepalese overseas
Nothing has halted yet, as far as verified reporting shows. Embassies and consulates issue passports using the same national system, so a prolonged suspension could slow renewals abroad. Those with upcoming travel or visa deadlines should renew early and check the Department of Passports and their nearest mission for notices.
What to watch
Whether payment, partial or full, is made on Monday; whether Muehlbauer suspends services; and whether Germany–Nepal diplomatic channels become involved.
