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Passport sales to settle Techno Brain’s K24bn refund

Attorney General (AG) Thabo Chakaka Nyirenda says government has agreed to refund passport booklets supplier Techno Brain Global K24 billion in respect of services rendered, and cost of breaching the contract.

Meanwhile, he said government will meet Techno Brain’s outstanding balance from revenue to be generated from passport sales.

Passport production was recently halted

The Tonse Alliance administration terminated the contract in October last year, citing anomalies. The contract was signed with the Democratic Progressive Party (DPP) in 2019.

According to minutes we have seen of the three e-Passport negotiation high level meetings between Techo Brain Global and Malawi Government, held on June 10, July 21 and October 12 2022 at Ministry of Finance conference room, the company demanded Malawi to pay about $28.5 million (about K29.1 billion) as settlement and contract termination fees.

Out of the amount, $22 533 333.33 (about K23 billion) is the settlement amount, while $6 million (about K6.1 billion) is contract termination fees.

The July 21 meeting agreed that $2.5million (about K2.5 billion) be deducted from the settlement sum, as it was already paid on March 8 2022 under the first interim agreement.

Nyirenda: Government will get the money

But minutes for the October 12 2022 meeting, attended by officials from ministries of Finance and Homeland Security Department of Immigration and Citizenship Services and as well as six Techno Brain Global representatives, indicates that Nyirenda informed the meeting that the outstanding amount was $24 million (about K24.4 billion).

Reads the minutes in part: “The AG explained that the hand over process under the settlement agreement is a very important issue and there has been no clear agreement on what to do with the source code, and that a handover is considered meaningless without having control of the source code.”

But Nyirenda could not disclose whether the parties signed the settlement agreement October 21 2022 as agreed as agreed.

Said Nyirenda: “The contents of the negotiations were supposed to remain confidential. Suffice to say that the final settlement amount is not $24 million.

“As said before, government stands to gain over K36 billion and save over $26 million. Payment will have to come from sales of passports which have accumulated over time.”

Meanwhile, Techno Brain Global insists that it did not flout any process to win the e-Passport contract, saying it submitted a bid in response to an international bidding process following stringent and compliance procedures.

In a written response a fortnight ago, Anjarwalla & Khanna LLP Director Luisa Cetina, whose law firm is representing Techno Brain Global on the matter, said prior to entering into the settlement, the Government, including a parliamentary committee, investigated the manner in which the 2019 contract was awarded and that there was no flouting of any regulation.

“We note that the e-Passport agreement between the Government and Techno Brain was terminated before the agreement ran its course and; therefore, there are obligations on both sides that have been affected as a result,” said Cetina, who has been part of Techno Brain Global negotiation team.

At the time of terminating the $60 million (about K61.8 billion) passport deal last October, Nyirenda said the decision was based on a contractual clause of convenience and public interest which allowed him to discontinue the contract at no cost.

In January this year, Techno Brain issued a statement asking for a continuation/resumption of the terminated contract, arguing that the proposal was a win-win situation for Malawi as the firm had laid an important foundation for the passport system in Malawi, including training of staff.

The deal also involved the introduction of an electronic passport under the build, operate and transfer model by providing 800 000 electronic passports under procurement reference number IM/01/272/07. Details emerged that for every passport booklet issued by the Department of Immigration and Citizenship Services, Malawians were getting a raw deal as government made a profit of between K30 000 and K117 000, largely due to overpricing.

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