Govt owes passport supplier K7.1bn

The issuance of passports has almost ground to a halt at the Immigration Department because it owes the supplier of books and other materials about $13 million (about K7.1 billion) in arrears and is no longer collecting revenues from passport issuance.

Chief Immigration Officer Masauko Medi disclosed this to the Budget and Finance Committee when members of Parliament (MPs) queried circumstances surrounding the rampant delays in issuing passports.

Said Medi: “The department has persistently been supplied with inadequate passport books and consumables by Technobrain as a result of the government’s non-payment of arrears.”

He told the committee that as a result of the debt, the government is no longer collecting as much revenue from passports issuance because all proceeds are going straight to the supplier, Technobrain. This is contrary to the Build Operate and Transfer contract which stipulates that passport fees should be shared equally between the government and the supplier.

“The government owes Technobrain about $13 million. But, because of the nature of the contract, the debt is accruing 15 percent interest per month but the supplier is not supplying passports and consumables. Money is remitted through Malawi Savings Bank [MSB], but once collected it is all going to the supplier. It is like Immigration Department is doing business for the supplier,” Medi said.

The officer, who was appointed in February, told the committee that before the account with MSB was opened there was a one year gap during which government did not pay the supplier but Technobrain continued to supply passport books.

This has resulted in low revenue collection and there is fear that the department might not meet its target of collecting K4.2 billion in the current financial year against a budget of K468 million in the 2015/16 financial year.

The department had proposed a budget of K5.8 billion to offset arrears and improve operations such as computerisation of border posts and purchase of vehicles, but Parliament approved only K468 million which was half the budget approved in the previous financial year.

The Immigration official disclosed that in the 2014/15 financial year, revenue collected amounted to K3.7 billion against an approved allocation of K873 million for Other Recurrent Transactions (ORT).

“The resources are little. If investment was high we would have collected more than K3.5 billion. We managed to collect 79 percent of our target with the little funding we were given but with half the funding, the government expects us to collect the same amount this year,” Medi lamented.