NIS contract too exorbitant, PPP approach inappropriate – ex NIA CEO (Full statement)

BY: Isaac Yeboah

A former CEO of the National Identification Authority (NIA), Osei Kwame Griffiths has taken current managers of the authority to task over what he says is an overpriced contract approved for Ghana’s National Identification System.

He says the stated $293m approved for the project does not make a good value for money sense in providing a national ID system solution for a country with a population of between 27 - 30 million.

A solution should not exceed $150 million, he argues in a statement he issued to proffer his expertise on the position of the current managers of the NIA who last week issued answers to FAQ on the ongoing debate over the project, briefly suspended due to what the NIA says were technical hitches.

In strongly urging the NIA “to review this contract from its technical and operational perspective in the interest of the good people of Ghana”, Osei Kwame Griffiths said he has serious doubt that the contract in its current form will pass a value for money audit as it “hugely overpriced”.

He also believes that the Public Private Partnership (PPP) approach for funding and running the system “is highly inappropriate” as it has national security implications.


“PPP is not a preferred means of procuring the registration of Ghanaians, since the registration of a country's nationals is a national security issue. This is further echoed by a resolution passed by ECOWAS in Niamey, Niger in February 2014 that issues of National Identification, be considered a matter of National Security. It is also important to note that IMS is a partly owned Danish company. Wouldn't Denmark find it unacceptable for a partly owned Ghanaian company to partner their National ID Institution to provide ID Cards for their nationals?”

Below is the former NIA CEO's statement

 

PRESS RELEASE BY OSEI KWAME GRIFFITHS, FORMER EXECUTIVE SECRETARY OF NATIONAL IDENTIFICATION AUTHORITY

I have come across a Press Release by the Corporate Affairs Department of the National Identification Authority titled" "NIA Response to Frequently Asked Questions on the Cost of the NIS Project" dated 30th May 2018. As a former Head of Technology, a former CEO of the Authority, an expert in the field of Biometric Technology and a Ghanaian, I feel it is my patriotic duty to point out blatant inaccuracies in the Press Release.

Speaking as an expert, I wish to pronounce that once established, a National ID System can be a "cash cow" for the nation through the sale of recognition services. Also, no solution for a country with a population of between 27 - 30 million should exceed 150 Million USD. Upon completion of the project (which NIA has indicated they could do in 13 months), revenue from the project within the first two years should be able to pay for the initial cost while simultaneously offering the needed funds to run the Authority.

Now to the Press Release:

NIA has indicated that; "The NIS project to deliver ID cards to all Ghanaians is over a period of one year. Within this period, the state is committed to $124m while the project partner is committed to $169m The total project cost for the delivery of the Ghana cards is therefore $293m...........part of the revenues that NIA will be raking in by virtue of the daily use of the card, will be used to manage NIA's operational cost and pay off the investments that the partners would make over a period of 15years. This is projected to be 1.2bn USD over the lifecycle of the project."

My comments:

1. If the above claim by the NIA is anything to go by, then there was absolutely no need for a PPP with a private entity. This is because the $124m indicated as NIA's contribution alone is enough to execute the project. Indeed, prior to leaving office, some of the offers we had from solution providers (the credible ones among the lot) were as follows:

• Multimedia Glory of Malaysia was willing to do it for less than $50m Madras Security Printing of India was willing to do it for less than $100m
• CIDC of China was willing to do it for $115m
• EDAPS of Ukraine was willing to do it for €123m for registration through to card issuance (including field operations).

Others who expressed interest came from countries like France (Safra Morpho), India (4G ID Solutions) and Serbia (Vlatacom).

2. The average cost of issuing ID Cards - from registration to card issuance (technical solution plus field operations) - is $5 per registrant. In April 2016, India crossed the one billion mark and has spent less than $2 per registrant, translating into less than $2 Billion in total so far. How can Ghana with a population of at most 30 million spend $1.2 Billion for this exercise over a 15 year period? In any case, once the system is set up and cards are issued to even a reasonable size of the population, revenue starts trickling in. The question that begs for answer is why the fifteen-year arrangement? By industry standards, the life span of ID Cards is usually ten years. Is the fifteen years contract intended to ensure a vender lock-in even beyond ten years?

NIA has indicated that "The NIS Project Cost (one year within which cards will be delivered to all Ghanaians) will be borne by government and the partner."

My Comment:

At the risk of sounding repetitive let me reiterate that, if NIA could raise that amount then why was there a need for a PPP arrangement? The claim that the private partner is going to invest $678m while Government of Ghana doles out $531m as its share of the burden (making $1.2 Billion) is to say the least ridiculous.

According to NIA..."A Public Private Partnership arrangement that comes with the requirements of Built, Maintain, Operate and Transfer. The contract terms and pricing are consistent with the Foreigner Identity Management System (FIMS) Pilot Project agreement executed between NIA and IMS in 2012, and the Feasibility Study Report for th present expanded project, which received two approvals by the Public Private Partnership Agreement Committee (PPPC) of Ministry of Finance in 2014 prior to the 2018 Final Approval"

My Comment:

PPP is not a preferred means of procuring the registration of Ghanaians, since the registration of a country's nationals is a national security issue. This is further echoed by a resolution passed by ECOWAS in Niamey, Niger in February 2014 that issues of National Identification, be considered a matter of National Security. It is also important to note that IMS is a partly owned Danish company. Wouldn't Denmark find it unacceptable for a partly owned Ghanaian company to partner their National ID Institution to provide ID Cards for their nationals?

On the 2012 FIMS contract between NIA and IMS, let me place on record that the FIMS was not a pilot project for the registration of nationals. Any claim that it was a pilot project is a palpable falsehood. Enough documentation was given to the current Ag. Executive Secretary to demonstrate that FIMS was not a pilot project. If FIMS was a pilot project for the registration of nationals then why will NIA, Ministry of Finance and The Office of the President be working with CIDC of China to register nationals years after the signing of the FIMS contract.

The claim that the prices under the IMS contract for the registration of Ghanaians were consistent with the FIMS Agreement is unacceptable since audit reports and other documentation in NIA point to the fact that the value for money audit for the FIMS project was conducted by a company owned by a director of FIMS now IMS. This constitutes a serious case of conflict of interest. I have no doubt in my mind as an expert in the field that FIMS contract was hugely overpriced.

Another point of interest is the case of under delivery of the FIMS scope. Instead of the 350 Mobile Registration Workstations (MRWs) required under contract, IMS had supplied only 50.

Also, instead of a card printing facility valued at $5 million, IMS had delivered just 10 SP 75 printers at a cost of $7,200 each (a total investment less than $100,000). Furthermore, instead of issuing multi-purpose identity smartcards capable of deploying e-ID, e-Driving License and e-Registration, compliant with international industry standards with secure match on high technology to verify identity of holders, IMS by the time of leaving office still issued 2D barcode cards.

All these issues and many more were captured in various documents handed over to the current Ag. Executive Secretary including Audit Report by PriceWatherhouse, NIA Internal Audit Report, report from Audit Service, report by Inter-ministerial Committee, made up of the Ministers of Finance, Communication and Justice & Attorney General, etc.

Indeed, the inter-ministerial Committee Report was written with the assistance of directors from the Ministries of Finance and Communication and three state Attorneys from Ministry of Justice & Attorney General's Department and it clearly stated that the PPP did not have final approval to proceed. It is therefore blatant falsehood for NIA to indicate in a press release that there was a PPP approval in 2014 for the registration of Ghanaians by IMS.

NIA further states that "These costs have undergone Value-For-Money (VFM) audits by the Public Procurement Authority (PPA) and have also been thoroughly assessed by the Public Investments Division of the Ministry of Finance."

As an expert in the field of Biometric technology, let me state categorically that the PPA, lacks the required exposure, expertise and competence to conduct value for money audit for an AFIS System. During NIA's dealings with the Chinese firm, CIDC, Crown Agents was contracted in 2013 to conduct Value for Money and it turned out that even the $115 million the Chinese had proposed as the total cost for the entire solution, was overpriced by about $30 million. It is my view that all documentation relating to the current $1.2 billion NIS contract be submitted to Crown Agents for a competent Value for Money review.

If the Government of Ghana is unable to pay for $30,000 or so for this exercise, I, Osei Kwame Griffiths, a citizen of Ghana will be more than happy to launch a crowdsourcing campaign to raise money from the public to enable Crown Agents competent Value for Money review .

NIA has indicated it will issue 2D Barcode for the Ghanaians below 15 years and a high specification smartcard for those above 15 years.

I wish to comment as follows:

For the 2D Barcode cards, there are enough blank cards, printing technology and consumables to print them for the age bracket below 15 years. The six MX6000s printers, owned by NIA either require upgrades to current version or could be traded in for the newer one. The six printers are capable of a combined throughput of 9000 cards per hour. This is enough to print cards for the whole of the African continent.

In the case of the high specs smartcard for the population above 15 years of age, the specifications are not so different from those received from companies mentioned above except for the memory, which among the offers were mostly between 80- 128K . One will therefore wonder what is so different that will lead to a cost that is so prohibitive.

In conclusion, I strongly urge the NIA to review this contract from its technical and operational perspective in the interest of the good people of Ghana. In its current form, I have serious doubts the contract will pass a value for money audit; the contract is hugely overpriced and a PPP approach is highly inappropriate.

Osei Kwame Griffiths
Former CEO of NIA
Proud Citizen of Ghana