Malawi Govt. cancels Techno Brain’s Passport Contract

Malawi Government has finally terminated the controversial passport printing contract worth $60.8 million (approximately K50 billion) awarded to Techno Brain Global FZE in 2019, the country’s chief legal advisor, Attorney General Thabo Chakaka Nyirenda has confirmed.

The Government’s top Attorney, Nyirenda, said the cancellation is in accordance with Sector 46 (c) of the Public Procurement and Disposal of Assets Act 2017.

“We must always do the right thing, no matter what it takes. As a country we have a duty to ensure that we safeguard public funds from plunder.

Attorney General Thabo Chakaka Nyirenda

“As a government, everything we do, must be done with the people at the centre of it because we serve the people,” said Nyirenda.

Section 46 (c) of the PPDA Act 2017 states that; a procuring and disposing entity may terminate a procurement contract for convenience, if it is determined to be in the public interest, and subject to payment for work satisfactorily completed, or services satisfactorily performed prior to the effective date of termination and for reimbursable expenses actually incurred, or for any goods specially manufactured under the procurement contract, and reasonable termination costs, but excluding lost profit.

Nyirenda said government has given a 30 days notice to Techno Brain on the development.

On March 22 2018, the then ruling Professor Peter Mutharika led administration of Democratic Progressive Party (DPP) entered into an agreement with Techno Brain Global FZE to supply 800,000 electronic passports.

The Malawi Government entered into a Build-Operate-and-Transfer (BOT) contract with Techno Brain Global FZE (Techno Brain) in 2019 for the upgrade of the Passport Issuance System (PIS) and introduction of electronic passports.

The contract was designed to run for a period of forty-two months (six months for PIS installation and thirty-six months’ passport issuance) at the total cost of US$60,800,000.00 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.

Human Rights Defenders Coalition (HRDC) in September this year had written 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 Global FZE for the upgrade of the passport issuance system and introduction of electronic passport under Build Operate Transfer (BOT) model.

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

HRDC chairperson Gift Trapence, in the letter, which he co-signed with other activists, including Michael Kaiyatsa, says 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 percent 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 8th October 2020, the World Bank debarred Techno Brain Global FZE 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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