“Opportunity cost of eVisa fiasco is $ 1.4 billion” - Rauff Hakeem

Data published by the Sri Lanka Tourism Development Authority, clearly show there is a significant drop in tourist arrivals since the new eVisa process came to operation. Based on an analysis of this data, it is evident during the period 1 Jan 24 to 15 April 2024 that tourist arrivals grew by an average 85%, which is for the period 16 April 2024 to 30 June 2024 the average growth tumbled to 25%!

• The outsourcing agreement poses a risk to national security and the protection of sensitive data
•  The imposition of exorbitant visa fees under the new complicated system has led to a noticeable decline in tourist arrivals
• We are not surprised; the tourism industry is up in arms!
•  We’re wondering why the tourism minister is quiet on this, thereby endorsing our view that the whole cabinet is complicit
•  The service offered by IVS/GBS/VFS is provision of a website to collect data entered by the applicant and there’s no physical presence or staff to assist!
•  We believe the role of this dubious middlemen duo, is to potentially siphon part of the fees for corrupt activities

Sri Lanka Muslim Congress (SLMC) Leader Rauff Hakeem, who is also the member of Committee on Public Finance (COPF) of Parliament discussed the impact of eVisa fiasco in interview with the Daily Mirror.

Excerpts:

Q:Why are you making a big fuss about the new eVisa process and calling it the Visa Fiasco?

The visa outsourcing fiasco has garnered significant attention and controversy for several reasons. Based on this, Members of Parliament Sumanthiran and Champika Ranawaka and myself- as members of the COPF- filed 3 separate petitions in the Supreme Court. These petitions will be personally supported by us. We averred that Public Trust has been seriously breached by the Executive by their illegal, unlawful and arbitrary actions, and have thus pleaded for the annulment of the impugned eVisa agreement and return to ‘Status quo ante’. The areas of concern are: 1. The opportunity cost to the Government, 2. Violation of Procurement Processes, 3. Contrary to IMF Governance Standards, 4. Serious National Security and Data Protection Concerns, 5. Economic Impact on Tourism, 6. Involvement of Middlemen – Money Laundering Risk and 7. Impact on Public Trust and Governance, thereby a violation of fundamental rights guaranteed by Article 12 (1).

Q:What did you mean by the opportunity cost to the government? The subject minister is on record stating that this transaction was done with ‘zero cost to the government’?

The estimated value of this opportunity is US $ 1.4 billion, based on the assumptions submitted by the proposers, which the government has given away “on a plate” for free, which raises serious questions!

The calculation of this imputed value is based on the tourist arrivals assumptions submitted by the proposers to the officials during negotiations and the fee structure contained in the agreement.

Based on this, the statements by the subject minister and many other members of the cabinet “This is at zero cost to the government” is a fallacy; to justify their arbitrary decision and we believe the entire cabinet including the head of state is complicit in this transaction, thus our sighting of the entire cabinet as respondents in the petitions.

Q:Why do you say that the government procure guidelines were violated? Once again the subject minister is on record stating that both in Parliament and outside, that the government followed proper procurement guidelines?

Maybe the subject minister is aware of what following procurement guidelines means. There was clear evidence placed before the COPF, the agreement was entered into without following mandatory public procurement guidelines, which require competitive bidding and consideration of alternative proposals. This lack of adherence to established procedures raises serious questions about transparency and fairness in government contracting. Such actions undermine public trust in the procurement process and suggest potential misconduct and or corruption.
If the Minister is convinced proper procedures was followed, he can place this before the court and let the court decide.

Q:Why do you say the transaction was contrary to the IMF Governance Framework?

The actions and decisions leading to the agreement are definitely contrary to the IMF’s governance diagnostics framework, which emphasises transparency, accountability, and the rule of law, with special emphasis placed on government procurement. By bypassing these principles through illegal, unlawful and arbitrary actions, the government had undermined public trust and raises serious concerns about its commitment to international governance standards, and the government’s commitment to adhere to strictures laid down by IMF in relation to governance, especially public procurement is a serious concern.

Q:Why do you say there are serious national security concerns and data protection concerns?

The outsourcing agreement poses a risk to national security and the protection of sensitive data. By handing over control of the eVisa system to non-state foreign entities, the government has potentially exposed national security related data, personal data and confidential information of all tourists visiting Sri Lanka. The website that collects all information is owned by an entity named VFS Global Services Pvt Ltd, based on the domains.lk registry. This is not a company that is contracted with the GOSL and there is no record in the company registry to confirm this company is a registered company. This could lead to breaches of the Personal Data Protection Act No. 9 of 2022, putting both individual privacy and national security at great risk.

Q:What is the economic impact on tourism?

The imposition of exorbitant visa fees under the new complicated system (as confirmed by the tourism industry) has led to a noticeable decline in tourist arrivals. Tourism is a critical sector for Sri Lanka’s economy and any deterrents to tourist inflow can have a significant negative impact on foreign exchange earnings and overall economic stability.

The new service fee structure is significantly higher than those in competing markets, which can deter potential tourists from choosing Sri Lanka as a destination.

We are not surprised; the tourism industry is up in arms! Data published by the Sri Lanka Tourism Development Authority, clearly show there is a significant drop in tourist arrivals since the date the new eVisa process came to operation. Based on an analysis of this data, it is evident during the period 1 Jan 24 to 15 April 2024 that tourist arrivals grew by an average 85%, which is for the period 16 April 2024 to 30 June 2024 the average growth tumbled to 25%! 

This is a significant drop! Which is endorsed by the tourism industry! The actors in this fiasco, the subject minister and the officials, do not see this and are adamantly defending their decisions saying Tourist arrivals had grown after the new eVisa process was introduced, without supporting their contention with data. We are wondering why the tourism minister is quiet and not commenting, thereby endorsing our view that the whole cabinet is complicit.

Furthermore, in order to understand why we say that the service fees are exorbitant, here is an example:

When you apply for a Visa to the UK, through VFS Global the fee charged by VFS is GBP 7 (approximately US$ 9). This fee includes, VFS assisting and ensuring the application is in order, ensuring documents are in order, obtaining biometric details, sending the application by courier to the respective UK consular office, receiving the processed application from the UK consular office and informing the applicant, arranging for the applicant to pick up the processed application, and the cost of maintaining a comfortable, well-staffed office with infrastructure to offer the service. Based on the standard 6 month UK visa fee being GBP 115 (approximately US$ 148), the VFS service fees amounts to an addition of c.6%.

Now let us analyse the service fees charged by IVS/GBS/VFS consortium from tourists arriving to Sri Lanka from the UK: The standard 30 day visa fees is US$ 40/-, the service fees in terms of the Agreement is US$ 18.50 (plus other charges), which is purportedly US$ 7.27 totalling to US$ 25.77, which is 62.5% of the Visa fees! The service offered by this consortium IVS/GBS/VFS is provision of a website to collect the data entered by the applicant, with no physical presence or staff to assist! Based on the recent press release by VFS, in order to justify the service fees, VFS refers to this service fee totalling to 62.5% of the Visa cost as a marginal or slight increase! Their contention is a fallacy to mislead the general public.

Q:Why do you say middlemen are involved in this transaction?

The government had negotiated and contracted with two middlemen companies in IVS Global and GBS Technology Services, who have seriously questionable and dubious backgrounds as the Primary Service Provider, with VFS partnering these two dubious companies as a technical partner for a fee. All fees including the visa cost (being GOSL revenue) are collected by this dubious duo into their bank account overseas directly from the applicant using an overseas based payment gateway side-stepping the flow of funds into Sri Lanka, exposing the government to counterparty risk (IVS Global/GBS Technology). None including the Government of Sri Lanka is  aware of the beneficial owners of these two dubious entities. And a company search reveals GBS technology is a Singapore based company owned by a staff member of a purported trust, which is in turn owned by a group of solicitors based in Singapore, UK, and Europe, with no record on who the beneficial owners are,  exposing the government  to potential Money Laundering and  Terrorist Financing Risk, based on OECD’s FATF recommendations in relation to Anti-Money Laundering and Countering Financial Terrorism .

We believe the role of this dubious middlemen duo, is to potentially siphon part of the fees for corrupt activities, potentially involving Sri Lankan politicians and Sri Lankan officials.
The image of the office front of one of the Duo, IVS Global, will provide credence to our beliefs as it is evident, and the said company is a “Petti-Kade” in India and doesn’t have the stature to contract with a Sovereign State.

We are perplexed as to how VFS Global, an internationally renowned company which is owned by Blackstone (a US based top tier alternate asset manager) and Kouni Travel (an internationally renowned tour operator) contracted with these two dubious entities who have no beneficial ownership on record! We are wondering how their respective compliance teams didn’t stumble on the several compliances related red-flags in relation to the dubious duo!