CIAA detains Passport Department DG smid multi billion passport printing tender probe in Nepal

KATHMANDU: Nepal’s anti-corruption watchdog has intensified its investigation into one of the country’s largest government procurement projects after detaining Department of Passports Director General Tirtha Raj Aryal in connection with the multi-billion-rupee passport printing contract.

The Commission for the Investigation of Abuse of Authority (CIAA) took Aryal into custody from Pingalasthan on Monday evening as part of an ongoing investigation into the procurement process involving two German companies awarded contracts to print millions of Nepali passports.

According to high-level sources, the investigation centers on contracts awarded for the printing and supply of approximately 6.4 million passports, a project worth more than Rs 7.66 billion.

Multi-Billion-Rupee Passport Contract Under Investigation

The passport procurement project was divided into two packages.

Under the arrangement:

• Muehlbauer ID Services GmbH secured the first package worth approximately Rs 1.55 billion.
• Veridos GmbH won the second package valued at approximately Rs 6.11 billion.

Both German companies were awarded the contracts around a year ago and are reportedly in the final stages of preparation to begin passport production by the end of the current fiscal year.

The contracts are considered strategically important because they will support Nepal’s passport issuance system, including the continued rollout and supply of modern electronic passports (e-passports) for Nepali citizens.

Investigators are now examining whether the procurement process complied with public procurement laws and technical evaluation requirements.

Prime Minister’s Office Had Sought Contract Documents

Sources familiar with the matter said questions regarding the passport procurement process had been raised at the highest levels of government in recent weeks.

According to officials, all documents related to the passport tender were requested from the Department of Passports roughly two weeks ago.

“The department was asked to provide all documents associated with the procurement process, and those documents were subsequently forwarded to the Prime Minister’s Office,” a department official said.

The request came while the newly selected companies were reportedly making final preparations to commence passport printing.

The document review is understood to have focused on the procurement process, technical specifications and evaluation criteria used during the contract award process.

High-Level Discussion Held at Prime Minister’s Office

The development took a dramatic turn on Monday when a meeting was reportedly held at the Prime Minister’s Office involving representatives of the contracted companies, Director General Aryal and members of Prime Minister Balen Shah’s secretariat.

According to sources, participants discussed progress on the passport printing project and the status of implementation.

Officials familiar with the discussions said questions were raised regarding production readiness, timelines and other technical aspects of the project.

Sources further claimed that Germany’s Ambassador to Nepal, Udo Volz, was also invited to participate in the discussions because both contract-winning companies are German firms.

According to officials, the ambassador reportedly waited for nearly an hour before joining the meeting.

CIAA Officials Reportedly Arrived After Meeting

Sources within the Prime Minister’s Office said senior CIAA officials arrived at the office shortly after discussions regarding the passport contract concluded.

According to those sources, a high-ranking anti-corruption official met directly with the prime minister following the passport-related discussions.

While no official statement has linked the meeting to the subsequent detention of Aryal, the sequence of events has generated significant political and administrative interest.

Neither the Prime Minister’s Office nor the CIAA has publicly disclosed details of the discussions.

Long-Running Battle Between Old and New Contractors

The passport procurement dispute has been marked by an intense legal and commercial battle between the previous passport supplier and newly selected contractors.

For more than a decade, Nepal’s passport printing contracts were dominated by French firms.

In 2010, the Department of Passports awarded a machine-readable passport (MRP) contract to French company Oberthur Technologies. After corporate restructuring and acquisitions, another French company, IDEMIA, continued to secure passport-related contracts in Nepal.

In 2020, IDEMIA was awarded another passport printing contract reportedly worth approximately Rs 2.50 billion.

However, during the tenure of former Prime Minister K. P. Sharma Oli, two German companies—Veridos and Muehlbauer—won the new passport supply tender in 2082 BS.

Following the contract award, IDEMIA challenged the procurement process, alleging irregularities in the bidding and evaluation process.

The dispute first reached the Public Procurement Monitoring Office before ultimately advancing to Nepal’s Supreme Court.

Nepali Representatives and Political Connections

The tender dispute has also attracted attention because of the local representatives associated with the competing international companies.

According to procurement sources:

• IDEMIA’s local representative in Nepal is Delta Four, led by businessman Siddhartha Pandey.
• Muehlbauer ID Services GmbH’s Nepali representative is Dinesh Manandhar.
• Veridos GmbH’s Nepali representative is Siddhartha Thapa.

Thapa is the son of upper house MP Sunil Bahadur Thapa.

Sources familiar with the procurement process claim there has been a prolonged struggle between groups supporting continuation of the previous arrangement through contract variation and those advocating implementation of the newly awarded tender.

Technical Specification Under Investigation

One of the key issues reportedly attracting investigators’ attention concerns the technical specifications included in the procurement documents.

According to sources, passport production ordinarily requires three specialized machines. However, investigators are examining allegations that procurement conditions were modified in a manner that allowed bidders with only two machines to qualify.

Critics argue that such a change may have provided an advantage to specific bidders.

Whether those specifications were legally justified and technically appropriate is expected to become a central focus of the investigation.

Implications for Nepal’s Passport Supply System

The investigation comes at a sensitive time for Nepal’s passport management system.

The Department of Passports has been working to ensure uninterrupted production and supply of passports amid growing demand from migrant workers, students, tourists and overseas travelers.

Any prolonged uncertainty surrounding the contract could potentially affect future passport supply schedules, although officials have not indicated any immediate disruption to passport issuance services.

The CIAA has yet to formally disclose the specific allegations being investigated or whether additional officials and contractors may face questioning as the probe progresses.

The detention of the department’s top official nevertheless marks a significant escalation in scrutiny over one of Nepal’s largest recent public procurement projects and is likely to fuel broader debates over transparency, public procurement standards, governance reforms and accountability in major government contracts.