E-Passport Contract Lands in Supreme Court After German Firms Secure Rs. 7.66 Billion Deal

A large-scale e-passport procurement deal by the Department of Passports has come under legal scrutiny, landing at the Supreme Court after it awarded a Rs. 7.66 billion contract to two German companies—Veridos GmbH and Muhlbauer ID Services—for the printing and supply of 6.4 million electronic passports over five years.

The contract decision, made on Jestha 22, 2082 BS (early June 2025), quickly became controversial. Advocate Kusum Kishor Koirala filed a public interest litigation (PIL), claiming the department violated Nepal’s public procurement laws and favored the German companies over other bidders. The Supreme Court has since ordered the submission of further documentation related to the case.

Before the PIL, French tech firm IDEMIA—one of the competing bidders—had also sought intervention, accusing the department of breaching key procedures. It had formally appealed to the Public Procurement Review Committee under the Public Procurement Monitoring Office. When no action was taken, the company turned to the judiciary.

According to IDEMIA’s complaint, the procurement violated multiple clauses of the Public Procurement Act, Procurement Rules, and specific terms laid out in the call for bids. The PIL filed at the Supreme Court raises similar issues.

Breaking down the contract:

• Package 1, involving the system setup, data management, and distribution, was awarded to Muhlbauer for Rs. 1.55 billion.

• Package 2, which includes supplying and personalizing blank e-passport booklets, went to Veridos GmbH for Rs. 6.11 billion.

Responding to criticism, the Department of Passports defended the procurement, noting the unit cost of a 34-page passport under the new contract is under USD 8.62—cheaper than the USD 10.13 per unit cost in previous years. Director General Tirtharaj Aryal also warned that disrupting the process may force the department to procure additional passports from the existing vendor under variation, potentially increasing costs and creating dependency.

Aryal further alleged that attempts to halt the procurement process might be intended to delay passport supply and pressure the department into costlier deals down the line—calling it a move driven by “malicious intent.”

Financially, the joint proposal by the German firms was USD 1.69 million (approx. Rs. 230 million) lower than IDEMIA’s. Based on the submitted bids, IDEMIA’s per-unit passport cost would have been USD 8.87, compared to USD 8.61 offered by Muhlbauer and Veridos. The department maintains that the contract was awarded based on cost competitiveness and transparency.

The Ministry of Finance had earmarked around Rs. 12 billion for the five-year e-passport procurement in the current fiscal year 2081/82. However, the legal battle now puts a question mark on the implementation timeline.

A bench led by Justice Balkrishna Dhakal issued a show-cause notice on Asar 17 (early July), with another bench—comprising Justices Dr. Manoj Kumar Sharma and Dr. Tek Prasad Dhungana—ordering the submission of supporting documents during the hearing on Asar 29.

The outcome of this high-stakes legal case will determine whether the government’s largest e-passport procurement to date proceeds as planned—or faces a full reset.