MAPUTO, The Belgian company Semlex Europe says it has closed down all its operations in Mozambique, and will no longer be responsible for producing Mozambican identification documents (IDs).

Although the Semlex media statement announcing the closure is dated Oct 23, it states that it ended its activities in the country on Sept 30.

This follows a lengthy dispute between the government and Semlex arising from the inability of Semlex to produce documents in good time and with the quality demanded by the government.

The Semlex statement says that it has handed over its offices, and all its equipment, documents and raw materials to the relevant Mozambican authorities.

Semlex signed with a 10-year BOT (Build, Operate and Transfer) contract with the government in 2009 for the supply of secure solutions for the production of identity cards, travel documents, identification and residence documents for foreigners (DIRE) and frontier visas.

Semlex claims that the government’s decision, announced in May, to cancel the contract was unjustified and illegal and that Semlex has been obliged to continue producing documents to a high standard without any remuneration from the Mozambican authorities, in addition to the existing debt of around 53 million US dollars.

The government terminated the contract after an audit found Semlex in violation of the contract. In August, Semlex said it demanded another audit which should be carried out by an independent entity, a recognized company, with proven technical and professional experience in the area. It says the government turned down this proposal.

What Semlex did not mention was that its contract has always been mired in controversy. The deal was struck by the previous government, under President Armando Guebuza, and the contract was given to Semlex in 2009 without any public tender, in violation of Mozambique’s procurement rules.

Immediately there were claims that the contract was illegal, and protests at the high prices charged for the Semlex identity documents. Thus the price for a Mozambican passport jumped from the equivalent of five or ten US dollars (depending on type) to 100 USD. the cost of an identity card more than tripled in price (from the equivalent of less than two USD to six USD).

According to press reports of the time, the greater part of the revenue from the issuing of identity documents went to Semlex and the original calculation was that, of the predicted annual revenue from the project, about 63 per cent would go to Semlex and only 37 per cent to the Mozambican state.

According to a 2015 investigation by the anti-corruption NGO, the Centre for Public Integrity (CIP), Semlex promised to invest 100 million dollars in the ten years of the contract. But by the time of the CIP report only 25 per cent of this amount had been invested.

A new tender was launched to select another company to supply biometric document production systems but Semlex did not submit a bid in its own name, but as the Lithuanian company, UAB Carsu Pasaulis. Since the Semlex Group purchased this company in 2014, the Lithuanian bid can be regarded as coming from Semlex under another name.

A jury from the Ministry of the Interior assessed the technical bids from five companies and announced its classification on Aug 9. Two of the bids were disqualified — one was submitted beyond the deadline, and the other did not meet all the requirements for a preliminary assessment.

Of the remaining three bidders, only two are now in contention. The Mozambican subsidiary of the German company Muhlbauer ID Services, received a score from the jury of 87.67. UAB Garsu Pasaulis trailed with a score of 70.05.

Only when it became clear that the Lithuanian bid was most unlikely to win did Semlex protest and claim the government was behaving illegally. The government reacted to the Semlex August protest by stating that the decision to rescind the contract was irreversible.