- Nepal faces a passport issuance collapse within weeks as stock dwindles to 50,000 booklets, enough for only 14 days of demand.
- A CIAA corruption probe into e-passport procurement has paralyzed decision-making and halted payments to the German printing contractors.
- Political infighting over contract cancellation threatens further disruption and potential international arbitration with German stakeholders.
- Halting services would ground migrant workers and students, severely impacting foreign remittance inflows vital to Nepal's economy.
Kathmandu, Nepal: Nepal faces an imminent administrative breakdown that could halt passport issuance within weeks, officials warned, as a corruption probe, high-level political infighting, and bureaucratic gridlock have frozen the country's printing capabilities.
The Department of Passports holds a stock of roughly 50,000 blank booklets—enough to satisfy demand for only about 14 days. While the department faces a daily influx of 6,000 new applications, bureaucratic delays have capped daily output at 3,000 to 4,000 passports, triggering an escalating backlog and widespread public anxiety.
The supply bottleneck stems from an ongoing investigation by the Commission for the Investigation of Abuse of Authority (CIAA). The anti-graft body has filed corruption charges against 18 individuals, including senior passport officials, alleging irregularities in the procurement process for the country’s new e-passports.
A contract for the printing project was previously awarded to two German firms, which have already set up infrastructure and begun preliminary operations in Kathmandu. However, the CIAA probe has paralyzed government decision-making. Fearing future legal liabilities or the retroactive invalidation of the deal, ministry officials are refusing to authorize payments or approve subsequent operational phases.
The crisis has also split the upper echelons of Nepal's government. Members of the Prime Minister’s secretariat are lobbying for the immediate cancellation of the German contract. Conversely, Foreign Minister Shishir Khanal has urged the government to honor the agreement through its contractual deadline, warning that an abrupt cancellation would invite severe operational disruption.
Diplomatic fallout has already begun to surface. German stakeholders have informally notified Nepali authorities that a unilateral termination of the active contract will likely trigger international arbitration and substantial financial compensation claims.
Industry analysts note that scrapping the current deal could carry a heavy fiscal penalty. The German contract secured a lower per-unit printing cost than previous state agreements. Dissolving it would force Nepal to return to its previous French supplier at a significantly higher rate, shifting the financial burden onto taxpayers.
Economists warn that the human and financial toll of a total service halt would be severe. A cessation of passport issuance would immediately ground thousands of students, travelers, and migrant workers who rely on valid documentation for overseas employment. A prolonged freeze could disrupt foreign remittance inflows, which constitute a vital pillar of the Nepali economy.
While Foreign Minister Khanal maintained cautious optimism that e-passport printing could launch by mid-July, independent analysts warn that the timeline remains unrealistic given the current legal deadlock.
Without immediate, coordinated intervention from the Prime Minister’s Office to resolve the contract dispute, experts warn that a total collapse of public passport services is inevitable.
