Engaging the OpenSource Community - Government Style

The Federal Government of India is undertaking a mammoth task of assigning a unique identification number to more than a billion Indians. There is an organization named UIDAI set up for this really interesting project. Since it is government you have committees and tenders. The database will use biometrics to establish identities, which someone could either brand as an Orwellian nightmare or a step to establishing enforceable citizens rights (you need to be someone to own something, especially title deeds) for everybody.
A quick peek on the site shows that it is running Apache/2.2.3. UIDAI seems to like the idea of OpenSource and invites contributors to participate in the project. I think this is a great idea to promote Indian technology and Indian engineering proficiency. Securing a database with a billion biometric profiles that needs to be accessed by thousands (if not millions) of legitimate users is a dream challenge for any IT architect and security professional (what type of dream is in the eye of the beholder). It is also very laudable, that all the documents are in the open for the world to see. I like this transparency. But where is light there is shadow. Reading the code contribution statement I find (emphasis mine):

6. If the Client Software or a module developed by any Developer is accepted by the Authority for implementation in the field for enrolment, the contribution of the Registered Developer will be recognized. However, the source code, documentation and IPR will belong to the Authority. Accordingly, the Registered Developer will be required to enter into appropriate agreements transferring all rights and intellectual property to the Authority for their product and contribution.
7. This effort for creation of the enrollment software is completely voluntary and the Authority is under no obligation to provide any financial incentive or consideration to the concerned Registered Developer for the product.

Let me translate that into plain English: We take your code, we take your rights, we won't compensate you, so you are in for the fame [only] (and in #8: we are not liable for the rights we hold). While later on it is stated, that the authority might open source the code at their discretion, the #6 requirement is in direct conflict with any known OpenSource licence like the GPL, LGPL, MPL, APL or any of the other OpenSource licences.
I'm curious how that will work out.