KATHMANDU, Jan 8: Nepal Bank Limited has invited Expression of Interest (EoI) to supply and install a web-based core banking system with conditions that effectively bar Nepali IT companies from participating in the bidding process itself. Domestic IT companies have expressed serious objections to the controversial provisions which they alleged were incorporated in collusion with foreign IT companies.
Nepal Bank Limited, which has so far been using a desktop-based banking server, has recently invited EOI to supply and install the web-based core banking system. The state-owned bank has invited EOI that favors foreign IT companies over domestic ones to expedite the procurement process even as the new government has announced to launch the ‘Make in Nepal’ campaign to promote domestic companies.
Those companies deemed eligible as per the conditions set in the EOI will only be eligible to participate in the final bidding process. The bank plans to install the web-based core banking solution at the cost of around Rs 100 million. As per the provisions in the Public Procurement Act, domestic companies along with foreign companies also should get an opportunity to participate in the bidding that is worth more than Rs 100 million.
Secretary General of Computer Association of Nepal (CAN) Federation Chiranjibi Adhikari said there is a foul intention in the EOI invited by Nepal Bank. He said that the EOI effectively disqualifies domestic companies.
General Secretary Adhikari said that it is objectionable to make an attempt to bring in foreign companies even as the products of Nepali IT Companies have similar quality. “Foreigners will have access to data while using foreign software. This does not serve the country’s interest. The government must think about it,” he said.
Adhikari also argued that the attempt to bring foreign companies even as domestic IT companies are equally qualified to do the job means not only draining Nepal's foreign currency reserves but also adding security challenges to the country. Foreign software should be brought to Nepal only after an evaluation by independent experts shows that domestic companies are not able to produce similar quality products. “There has been a deliberate attempt to bring foreign companies even as domestic companies are equally qualified to provide quality products. The government must look into it,” he said.
Although Nepali IT companies can also participate in the first round of bidding process, the provision in the EOI makes it mandatory to have almost all human resources as foreign nationals. This provision has made Nepali IT companies to stay out of the competitive bidding process itself. All Nepali IT companies have domestic human resources. But the EOI has included a provision that makes it mandatory to have foreign nationals in the consulting companies that secures the bid.
The EOI clearly states that team leader, who works as an expert of the core banking system, project manager, deputy team leader, core programmer and system analyst, among other human resources, must be foreign nationals.
Umesh Rajbanshi, who is the Chief Executive Officer of Infodevelopers, a Nepali IT company, said since all domestic IT companies have Nepali nationals working with them, the provision to make it mandatory to have foreign nationals in almost all key positions is a deliberate attempt to keep all domestic IT companies out of the competitive bidding process itself.
Rajbanshi, whose company is providing services to foreign clients as well, alleged that this is a deliberate attempt to favor foreign companies out of vested interests of some within the bank.
“Nepal Bank’s tender has ulterior motives,” he said, adding, “The software made in Nepal is being used in foreign countries but why isn’t it being used in Nepal?”
He argued that Nepal’s IT company Mercantile has prepared a web-server-based software which is being used by banks in Myanmar. Likewise, Infodevelopers has also been supplying banking software to Bhutan.
Nepali IT and engineering companies complained that they have been providing services in foreign countries but have been discouraged in their own country.
“The companies that have succeeded in foreign banks have been deemed as failures in Nepal,” said an operator of an IT company.
“This is being done in collusion with high-ranking officials of Nepal Bank,” he added. According to him, many companies in Nepal are importing software from foreign countries.
The procurement deals are being initiated even at a time when the country’s foreign exchange reserves have been declining, resulting in an increase in external pressure. The EoI mentions that the supplier must have obtained core technical and management training in foreign country.
However, officials of Nepal Bank are not ready to admit the allegations.
Nepal Bank’s Spokesperson Prakash Kumar Adhikari says that the bank was compelled to issue the EoI of international standard because they had to make procurement of more than Rs 100 million. “We issued the Expression of Intent in line with the Public Procurement Act,” said Adhikari, adding, “Not only foreign companies but even Nepali companies can participate in the competitive bidding process.”
Although Spokesperson Adhikari did not admit the allegations, another high-ranking official of Nepal Bank informed Republica that this EoI was issued in collusion with an Indian company. “There are rumors in the office about collusion with an Indian company. This is a high-level management decision,” said the official requesting anonymity.
Nepal Bank is currently using a desktop-based banking software prepared by Mercantile. Spokesperson Adhikari said that the current system is outdated and the bank wants to revamp it by using a new system.
“We need a core banking system of international standard,” he said.
“We want to update the system due to security reasons.”
