End of contract between Idemia and South African airport authority

Idemia’s major contract to supply biometric and facial recognition systems to South African airports has been cancelled, following months of wrangling between the supplier, its former local partner and Airports Company South Africa (ACSA).

ACSA did not give a reason for the cancellation, but simply said that it had “terminated the contract for Automated Border Control (ABC), e-Gates and the Single Token project awarded to a French technology company, Idemia” and that “the termination of the contract is in accordance with the terms of the service level agreement which provides for a 60-day notice period.” Idemia will be allowed to conclude the work currently in progress.

In August 2023, ACSA awarded the three-phase contract, worth R380 million (US$20.8 million), to Idemia South Africa and Infoverge Solutions, with major plans to leverage biometrics and digital identity across the airport network through Idemia’s ID2Travel biometric passenger flow facilitation system.

But cracks in the deal began to appear in July 2024, when Infoverge filed a legal challenge seeking to have the contract annulled.

Infoverge’s website describes it as a “Tier 1, 100% Black-owned and managed” company. The company’s litigation alleged that Idemia exploited Infoverge’s status as an exempt, black-owned micro-enterprise to comply with the Black Economic Empowerment (BEE) requirements in the ACSA tender, and then dropped the local company after the first phase of the project.

According to a report in the Sunday World, there are also rumours that an ACSA representative pushed Idemia to drop Infoverge in favour of a preferred connection, and that Idemia executives tried to hide the R115 million ($6.3 million) price tag attached to phase 1 from Infoverge and balked when the BEE company increased its initial quote by R44 million to account for its share of the total.

In the meantime, Idemia had found another local partner to fulfil its BEE obligations under the agreement. In early August, as seemingly unrelated delays began to affect King Shaka International Airport (KSIA), Idemia said Biometric update that, even though the biometric system was not yet operational, its installation had begun and that no delay was expected in its deployment, including due to the Infoverge dispute.

Accusations of interference lead to suspension of ACSA IOC

Infoverge’s argument may have ultimately convinced ACSA to walk away from the contract, but the plot goes deeper than that. While the tender for the biometric e-gates and passenger facilitation project was launched in 2022, documents surfaced showing that Idemia and ACSA had signed a memorandum of understanding (MOU) around the work in 2021. This gave rise to allegations that Idemia had unduly influenced the award of the contract, acting as both “arbiter and actor” – leading to further allegations that Idemia’s trademarks appeared in the tender document and that ACSA representatives had attended Idemia’s workshops where the project was discussed.

A February report from IT Web cites ACSA as saying that the 2021 MoU “did not constitute a binding contract and did not involve any financial transaction between the parties,” serving only as a non-disclosure agreement for information related to the biometric movement control system. At the time, it denied any accusations that Idemia had interfered in its procurement process.

A few weeks ago, ACSA reversed course, announcing that a preliminary investigation had revealed “prima facie evidence of wrongdoing in relation to the biometric and digital identity technology project.” The agency then placed its chief information officer (CIO) Mthoko Mncwabe on “preventive suspension.”

With the formal cancellation of the contract, it seems that the last stone that held together the relationship between ACSA and Idemia has collapsed.

But the story is not over yet. The ACSA statement said that “the biometric and digital identity technology project remains essential to ACSA’s short- and medium-term strategy” and that “the company intends to continue the project in the near future.”

She also notes that “ACSA remains committed to the best interests of good corporate governance, transparency and fairness as we continue an independent investigation.”

Biometric update contacted ACSA for further comment.

Article topics

airports | Airports Company South Africa (ACSA). | biometrics | border security | IDEMIA | South Africa