The German government has expressed serious objections over what it describes as "unsubstantiated" corruption allegations against two German companies awarded contracts to print Nepal's passports.
On Thursday, the German Foreign Ministry summoned Nepal's Chargé d'Affaires in Germany, Sagar Prasad Phuyal, to its office, where it lodged a strong protest over the matter and also handed him a written letter.
According to highly placed sources, the protest letter sent to the Nepal government states that Germany is deeply concerned that the state-owned company Veridos and the private German firm Muehlbauer ID Services have been charged in a corruption case in Nepal.
The German government argues in the letter that although corruption charges have been filed in connection with the passport contracts, the charge sheet submitted to the court contains no evidence supporting the allegations.
"Our companies have not engaged in any corrupt practices. That is why no evidence has been cited in the charge sheet," a highly placed government source quoted the letter as saying.
The letter states that charging employees of the German companies has damaged the firms' reputations. The German government also warns that any deliberate cancellation of the contracts signed with the German companies could expose Nepal to complex legal and financial risks.
The German Foreign Ministry has warned that if the contracts are terminated, the companies may be compelled to pursue compensation claims for reputational damage and commercial losses.
In the protest letter handed to Nepal's chargé d'affaires, the German Foreign Ministry also said that employees of the companies are scheduled to travel to Nepal next week to "go live" with the new passport printing system. It stressed the need to ensure the safety and security of those personnel.
On June 15, officials from the Commission for the Investigation of Abuse of Authority (CIAA) were summoned to the Prime Minister's Office, where they were kept for nearly nine hours by aides to the prime minister and pressured to file a corruption case over alleged irregularities in the passport contract.
Amid that pressure, two officials who had gone to Singha Durbar for discussions were arrested by the CIAA in connection with the same case.
The CIAA has since filed a case at the Special Court over the passport contracts.
Two German companies were awarded contracts for the passport printing project. Under Package 1, Muehlbauer ID Services was awarded the contract for passport pre-enrollment, enrollment, and data management systems.
Under Package 2, Veridos won the contract for personalization, quality control, and packaging systems.
The CIAA has filed corruption charges against employees of the Department of Passports and the Ministry of Foreign Affairs, and representatives of the two German companies.
Gerhard Maurer and Pavle Rakic of Muehlbauer ID Services, and the company's Nepal representative Manindra Raj Malla have been charged in the corruption case. The CIAA has sought Rs 1.91 billion in damages from them.
Similarly, corruption charges have been filed against Fabiola Bellersheim and Florian Pacquelin of Veridos, and the company’s Nepal representative Siddhartha Thapa. The CIAA has sought Rs 8.22 billion in damages from them.
