Criminal Syndicate: Techno Brain threatens to disrupt Malawi passport system

A criminal syndicate busted led by Techno Brain, the company whose US$60.8 million (about K50 billion) contract to supply 800,000 Malawi electronic passports was terminated by the government last month, threatens of a likely disruption to the country’s passport system as a result of it being prohibited from accessing infrastructure necessary to carry out scheduled maintenance procedures.

A statement from the company, that touts itself as “a global leader in next-generation digital services and consulting”, maintains its innocence from Malawi Government justification in cancelling the contract and is challenging through legal means.

The Government cancelled Techno Brain’s contract to provide e-passports and to undertake a comprehensive upgrade to the country’s entire passport issuance system on grounds that the company strongly disputes.

Attorney General Thabo Chakaka Nyirenda cancelled Techno Brain contract

Techno Brain says under the contract agreed in 2019, it was responsible for creating the country’s new passport infrastructure, with plans to develop capacity to maintain and operate the system over time — including training and capacity building for over 125 Department of Immigration and Citizenship Services (DICS) officers.

“However, these plans were cut short when the Government suddenly announced the cancellation of the contract in December 2021,” says the statement.

“Techno Brain wishes to inform the public ahead of time that, as it is currently prohibited by the Government from accessing its infrastructure, it is regrettably unable to conduct scheduled maintenance procedures that are upcoming on 20 January 2022.

“Failure to perform these procedures is expected to result in disruption and potentially a full system shut down.”

Prakash Naidu – Techno Brian Technical Specialist in Lilongwe

In addition to jeopardising the passport issuance system by denying access to Techno Brain to critical infrastructure, one of company’s Technical Specialist engineers, Prakash Naidu, has been placed under illegal house arrest without charge since Saturday, January 8, after six officers from the DICS arrived at the company guesthouse in Lilongwe.

“The DICS insists that Mr Naidu — an expatriate technical engineer who had remained in-country to ensure that the passport issuance system remained functional — will remain detained until Techno Brain agrees to hand over all infrastructure under the unilaterally-terminated contract.

“A writ of habeas corpus challenging the detention as illegal has been filed with the High Court and the company is calling for his immediate release.

Furthermore, concerns at the unlawful detention of Prakash Naidu have been raised with international human rights organizations.”

The company further says Attorney General Thabo Chakhaka-Nyirenda’s justifications for this “unlawful detention further exhibit a remarkable departure from basic rule of law norms”.

“Techno Brain maintains that the contract is the product of a competitive bidding process that followed all the relevant procurement regulations, and that its resumption would result in a win-win situation for all parties.

“The full implementation of the system was expected to deliver substantial efficiency gains, both for the Government of Malawi and for citizens that will no longer have to travel to Lilongwe or Blantyre to apply for a passport, as well as critical security benefits in terms of reducing incidents of forgery and identity theft.”

Techno Brain maintains that it is an African-born country which has “a strong track record of operating in Malawi to date and employs a number of local staff to operate the system”.

“It is proud of the strong role it has played delivering innovative and ground-breaking solutions in response to local needs and challenges across the region.

In cancelling the contract, Chakaka-Nyirenda it was in accordance with Section 46 (C) of the Public Procurement and Disposal of Assets Act 2017, the country’s authorities have a duty to ensure that they safeguard public funds from plunder.

Chakaka-Nyirenda hinted that there could have been malpractices as regards the award of the contract.

The contract was agreed upon on March 22, 2018 by the DPP-led administration under Peter Mutharika which was a Build-Operate-and-Transfer (BOT) contract with Techno Brain Global FZE (Techno Brain) for the upgrade of the Passport Issuance System (PIS) and introduction of electronic passports.

The contract was designed to run for a period of 42 months — six of which were for PIS installation and 36 for passport issuance — at the total cost of US$60.8 million representing the printing cost of 800,000 passports at the price of US$76 per passport.

According to the contract, it was agreed that Techno Brain would fund all the initial processes including trainings, meetings, travels as well as production costs as regards deliverables for the printing of passports.

The Department of Immigration was supposed to provide project office, physical space, water, electricity, security, the Project Manager and make available staff for designated training sessions.

A Build-Operate-and-Transfer (BOT) agreement is an agreement between the government and an investor in which the investor undertakes construction and financing of a large-scale infrastructure project and operates and maintains it for an agreed period of time and hands it over to government at the end of the period.

BOTs are one of the forms of international investment and they are a means of developing a country’s infrastructure without the Government having to invest public money whilst ensuring that the relevant assets ultimately remain in the public sector.

In September last year, Human Rights Defenders Coalition (HRDC) sent red flags over the contract when it wrote the Minister of Homeland Security, Richard Chimwendo Banda, asking him to facilitate the cancellation or variation of the contract the government entered into with Techno Brain.

HRDC argued to Chimwendo Banda that the contract was designed in such a way that it favours Techno Brain at the expense of the interests of Malawians.

In the letter, co-signed by HRDC chairperson Gift Trapence with other activists, said after reviewing the contract, the human rights watchdog feels the contract was tailored to favour the contractor.

“In such commercial contracts, the limitation of liability is normally 10% of the contract price but Clause 24 of the contract put limitation of liability at USD500,000. In Clause 49, the payments are not linked to the passports issued.

“There is no performance bond guarantee and there is no advance payment guarantee. This means that payments are due whether the contractor is performing or not,” read the letter in part.

HRDC informed the government that on October 8, 2020, the World Bank debarred Techno Brain in connection with collusive and fraudulent practices in Liberia, making them ineligible to participate in projects and operations financed by institutions of the World Bank Group.

“While the contract for electronic passports is not financed by the World Bank, we hold the view that this debarment points to a serious risk of doing business with Techno Brain Global FZE and probably explains why this contract is skewed towards them,” concluded the letter.

Attorney General Nyirenda said earlier this week that he is on a mission to legally right all correctable wrongs and to recover every penny stolen from the public purse.

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1 year ago

Whatever the case, we demand that the plight of the Malawian be the PRIORITY!! Anything else including the law ought to be subservient to that cause.

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