The Anti-Corruption Commission (ACC) has told Parliament’s Finance Committee that the deal with Malaysian mobile security provider Nexbis will cost the Maldives MVR 2.5 billion (US$162 million) in potential lost revenue over the lifetime of the contract.
The border control system is now up and running at Ibrahim Nasir International Airport (INIA), after a Supreme Court ruling in early September favouring Nexbis ended almost two years of efforts by the ACC to block the project.
Under the ‘build operate and transfer’ (BOT) agreement with Nexbis, the government is obliged to pay Nexbis US$2 for every foreign passenger processed and US$15 for every work permit for the 20 year lifespan of the contract. Nexbis remains responsible for the upgrading, servicing and administration of the system.
Former Immigration Controller Abdulla Shahid has expressed concern over both the cost and necessity of the project, calculating that with continued growth in tourist numbers Nexbis would be earning US$200 million in revenue over the 20 year lifespan of the agreement.
At five percent, royalties to the government would come to US$10 million, Shahid said, when there was little reason for the government not be earning the revenue itself by operating a system given by a donor country.
“The option was there to establish the system for free,” stated ACC President Hassan Luthfee, revealing that the US government had offered a free system in 2009.
“Even the Indian government had offered to do it for free. On the other hand this could have been done for MVR2.3-2.5 million. So we can’t believe that this should be done at such a high cost,” Luthfee told the committee.
Other contentions raised by the ACC included a “questionable” project evaluation, which the commission alleged violated protocols of the National Planning Council.
“The National Planning Council’s protocols say that anything passed by the council cannot be changed by any other relevant institution unless it is sanctioned by the Council itself or the ministerial cabinet. But without following the said two protocols, Immigration made major changes to the proposal,” ACC’s investigation officer Mohamed Sodig was reported as saying in local media.
Evaluations and bid criteria had been unclear, the ACC alleged, further claiming that the validity of the Nexbis bid had been 90 days which had expired at the time the price bids were opened.
“We tried to determine whether the validity of the proposal or bid of Nexbis had been extended. However, we failed to find a single document that had done so, and marks had been given for Nexbis’ price bid,” Sodig was reported as stating.
The commission also claimed that minutes for one government meeting to discuss the project had taken place during prayer time on Friday October 15, 2010, which the commission claimed was “highly suspicious in a 100 percent Muslim country”.
The ACC also contended that the charging of a fee for passengers and foreign workers constituted a tax and was in violation of Article 97 of the constitution, requiring parliamentary approval for new or altered taxation. In an apparent precedent, a similar ruling from the Civil Court in late 2011 overruled airport developer GMR’s ability to levy an Airport Development Charge (ADC), despite this being stipulated in the developer’s concession agreement with the government.
The Supreme Court has meanwhile cleared the way for the border control project, invalidating an earlier injunction from the High Court.
The move prompted complaints from the ACC, which expressed concern and frustration over the decision stating that it has put the commission in a state of limbo and deprived it of purpose.
“If this institution is simply an investigative body, then there is no purpose for our presence,” he said. “Even the police investigate cases, don’t they? So it is more cost effective for this state to have only the police to investigate cases instead of the ACC,” Luthfee said at the time.
Outside the dispute over its legality, with the project now running the collection of biometric data by immigration allows the government to identify people without paper documents – useful in a country where a third the population are imported workers, and where the confiscation of passports by employers is common practice.
The reaction from tourists to the new system has however been mixed.
“The immigration process now takes a lot of time to complete because they must now take fingerprints and pictures of people entering the country,” observed a German visitor.