April 2, 2018 / 9:29 PM / 4 months ago

British firm De La Rue to challenge government on passport contract

(Reuters) - British passport-making company De La Rue Plc (DLAR.L) said on Monday it would appeal a decision by the British government that would allow Franco-Dutch company Gemalto NV (GTO.AS) to make new blue national passports from 2019.

A handout photograph shows the original 'blue' British passport, which was subsequently replaced by the burgundy EU British passport, supplied by the UK government in London, Britain, March 22, 2018. UK Government/Handout via Reuters

De La Rue’s current contract, which ends in July 2019, is worth 400 million pounds ($561.96 million).

“Based on our knowledge of the market, it’s our view that ours was the highest quality and technically most secure bid,” a De La Rue spokeswoman said in a statement. While accepting that its tender represented a significant discount on the current price, the company said “we can accept that we weren’t the cheapest.”

De La Rue’s appeal to the court decision was first reported by the Financial Times on Monday.

When Gemalto was awarded the passport-making contract, the decision was roundly criticised, especially from U.K. citizens who recognised the return of blue-coloured passports as a patriotic Brexit bonus, the FT said.

The Daily Mail newspaper led an extended campaign against the governmental decision and organised a petition inclusive of over 227,000 signatures, according to the FT.

On Sunday, the British Home Office extended the original deadline for legal challenges to the decision from April 3 to April 17 as De La Rue sought further information from the ministry on its decision-making process, the FT reported.

De La Rue executives, the newspaper said, perceive that Gemalto is in a favourable position simply because it has undercut its competitors.

The news produced awkward headlines for Prime Minister Theresa May, who announced in December that Britain, which adopted burgundy passports in 1988 in line with EU recommendations, would switch back to the “iconic” dark blue it had used for decades.

Britain’s biggest trade union Unite hit out at the government’s choice and said the French government would never have made such a move.

($1 = 0.7118 pounds)

Reporting by Shalini Nagarajan in Bengaluru; editing by Grant McCool and Diane Craft

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