ePassports come in on budget - though with 'chip gap'

The Identity and Passport Service (IPS) has completed the launch of ePassports on time and on budget but question marks still surround several aspects of the project, including how defective chips on the electronic documents will be dealt with.

A report from the National Audit Office (NAO) on ePassports said the IPS has "successfully completed the project" with a total set-up cost of £61m, just under the budget of £63m.

But the report highlights uncertainties about the warranty for the chips used on the ePassports. The chips have a two-year warranty from Philips Semiconductors - now known as NXP - though the passports are issued for 10 years.

The IPS will remedy any problems during this warranty period, according to the NAO report. In addition, any passports returned to the agency will be examined and if the chip is found to have a manufacturing fault, the passport will be replaced free of charge at any time.

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But for other types of faults relating to the chip there are no assurances about who will pay for the replacement of defective passports.

A spokesman for the NAO said: "This is certainly a risk for the passport service. The question is: who will foot the bill?"

An IPS spokesman said the agency is "confident it won't be a problem" because of the "rigorous testing" of the biometric technology.

The agency said in a statement: "IPS will continue to work with both existing and new suppliers of the biometric assembly to improve the warranty on this assembly as market confidence grows."

While ePassports are now being issued at all passport offices they will not be put into action until appropriate readers are available at UK borders - which is scheduled to happen by March this year. The NAO said there was "insufficient liaison" between the IPS and the Immigration and Nationality Directorate, the agency responsible for upgrading readers at borders.

The NAO also criticised the IPS' reliance on consultants - on which it spent £4.9m - for the ePassport project. It said the IPS should "reduce its reliance on consultants and interim staff and devote greater attention to knowledge transfer".

It also recommended civil servants be used in non-technical roles such as project management and analysis in future - a move it said could save £2.5m over the next five years.

Further discussion on ePassports will take place on 27 February when IPS representatives appear before a Public Accounts Committee hearing.