Calling Security

The Paris attacks were a shock to everyone. The ease with which they were planned and executed has been a wake-up call the world over. Not long after, the mass shooting in San Bernadino in the US underlined how vulnerable we are to terrorists. The danger is no less in India, which has seen the 26/11 attack on Mumbai after which the Paris attack may have been modeled.

Clearly, there’s a role for private security agencies in helping to prevent attacks. In India, the security and safety dynamics for private security agencies are evolving around three areas: manned guarding, electronic security and cash management. But things are set to change as key infrastructure projects like airports, railway stations, etc., become possible targets and call for private security measures.

Union Home Minister, Rajnath Singh, said recently, “Presently, around 50 lakh private security guards are providing round-the-clock security to offices and other buildings. The government is considering working in tandem with the private security agencies.”

The minister realises that private security guards are not trained to handle emergencies without active coordination with the police or para-military forces.

Private security agencies could be getting a sizeable share of government business after the Union Minister Suresh Prabhu recently said, “The government is considering deploying private security agencies on the Indian railways network…They can handle non-policing tasks, like management of security at railway stations, baggage scanning and patrolling of railway tracks.”

A. Didar Singh, Secretary General, FICCI, says the emphasis on ‘Make in India’ will encourage foreign capital into manufacturing and trigger a demand for private security personnel.

In India, the private security business is fragmented and revolves around man guarding. Some of the major firms in India in the field of privates security services are G4S, Peregrine, Securitas, Tops, ISS-SDB, SIS, Sentinel, and Brinks. In value terms, it is estimated the security business will touch Rs 40,000 crore in 2016. The business is growing at over 20 per cent annually accelerated by developing infrastructure projects including townships, commercial establishments, highways, modernisation of airports, railway stations, and improvement in road connectivity. Indian corporate houses, educational institutes of repute, banks, and upmarket residential and commercial complexes are now relying more and more on the expertise of private security firms.

“Private security as a sector is now characterised by high growth and that’s what is getting increased investor interest,” said Rituraj Sinha, promoter of Delhi-based SIS Group, which is riding on a turnover of over Rs 3,500 crore. SIS provides security solutions to the RBI, Delhi Metro, Coca Cola India and Oberoi Hotels and Resorts, among others. Tops is deployed with IBM, Jaypee Group, Essar, and Aditya Birla Group, among others.

Run, Hide, Fight
Globally, the business of private security is pegged at over Rs 6 lakh crore with specialist agencies offering a range of solutions for individuals, in-home security, community safeguarding and business establishments.

For instance, France, UK, Sweden, Denmark and Norway have stepped up training of private agencies to thwart “active shooter” or individuals or groups armed with high-powered weapons, who open fire at public gatherings with the sole intent of inflicting mass casualties. Since the Charlie Hebdo attack last year, such training has become imperative.

Corporate and state-owned establishments in the US and Europe have enlisted the services of private security agencies to develop floor plans in office complexes and public buildings to demonstrate to those working there the safe, shelter-in-place locations in case there are attacks.
Most countries have developed a three-part response plan — “run, hide, and fight” — when there is an active shooter scenario. Safe rooms on floors or common areas have been created across buildings and corporate hubs where employees are advised to run and seek shelter in the event of a terrorist attack. There is no such emphasis by corporates so far.

Cameras Watching
With the growing sense of insecurity felt by citizens in general, resident welfare organisations, office complexes and public places, there has been a spike in the sales of electronic surveillance equipment. Says Yogesh Dutta, COO, CP Plus India, a seller of CCTV camera solutions, “The size of the electronic security and surveillance business is estimated at anywhere between Rs 2,000-2,500 crore in 2014. Around 7 to 10 lakh cameras per month are sold in India currently and CP Plus has a market share of 35 per cent in this market.” Dutta says what is fueling the growth is the availability of high-end HD cameras at affordable rates.

“The low-end, analogue cameras have given way to high-end HD cameras. Very soon a slew of intelligent products will be unveiled including smart plug-and-play cameras which will use home Wi-Fi access allowing videos to be accessed on Android devices from anywhere. They can even be stored on the cloud or on memory cards,” he says. “Then there are intelligent video doors and other high-end solutions also possible.”

For Hyderabad and Chennai, it is mandatory for commercial establishments to install CCTV cameras. CP Plus cameras are currently active across NOIDA Sector 18, Civil Lines, DLF Cybercity (in Delhi NCR) and across police stations in Tamil Nadu and Odisha. Banks like SBI, ICICI, and HDFC are also using CP Plus cameras for surveillance.

A Grant Thornton-FICCI study says the private security industry is expected to generate 50 lakh additional jobs by 2020. Currently, manned guarding is the largest segment in the security space in the country with approximately 75-80 per cent market share; the cash services market, which is the next biggest segment, is expected to cover 25 per cent of the market share in the next five years.

Cybersecurity
Sivarama Krishnan, who leads Cybersecurity practise for PwC India, says Cybersecurity is indispensable in India as organisations are looking at innovative cybersecurity solutions. “We have seen a 25 per cent compound annual growth rate (CAGR) in security budgets over the past five years, which supports this trend,” he says. According to Krishnan, with more users on social platforms, risks and security implications need to be analysed carefully. “Since terrorists use these platforms regularly for propagating their agendas, a comprehensive strategy thwart needs to be created. Governments and companies using analytics and the cloud also require systems to be secured in a manner that the integrity of the data being provided is comprehensive and accurate at all times,” said Krishnan. Stephen Brobst, the chief technology officer, Teradata Corporation, a US-based data analytics firm having presence in India for over a decade, agrees: “India has a lot of opportunity for the use of data analytics. In some places, we work closely with law enforcement agencies to analyse data of people entering or leaving the country,” he says.

“Our work with banks and tax departments can help agencies understand in great detail about any person of interest based on various data source generated in the background. Income tax authorities here and some other government agencies have shown interest in our work.”

Sensing the growing business opportunity in the sector, private equity giants like ICICI Venture, Blackstone, DE Shaw, CX Partners, and others are betting big on private security companies. In India, the SIS Group has a joint venture with Spanish security major Prosegur for cash logistics segment, Servicmaster for mechanised cleaning, and pest management services company Terminix.

In 2007, SIS received its first funding from global investment firm DE Shaw and in 2008, it used the funds to acquire Australian guarding and mobile patrol business unit of US industrial conglomerate United Technologies. It has raised its second round of funding from home-grown private equity investor CX Partners, which allowed DE Shaw to exit in 2013.

Challenges Galore
The closest instance of an active shooter situation in India was the 2008 Mumbai terror attack. In response, Indian law enforcement agencies have ensured that each of the metros and larger cities have a base for the National Security Guards or a similar force to reduce the response time. A wide network of CCTV cameras comprising has been reported to have covered identified spots. Equally, there are reports of these not functioning properly. Relying on private security agencies comes with its own set of challenges. Private agencies cannot be armed under the present laws. There is no formal coordination with police to conduct mock security and safety drills as is happening elsewhere. Most of all, private security is marred by the absence of latest techniques and technology from a lack of investment.

“We offer more for the cost we charge. But modernisation costs money, which sadly is not forthcoming from the private sector because everyone wants to get the best services at the lowest cost. But things will change as we progress,” says Sinha of SIS Group.

According to Harendra Bana, head security, PepsiCo India, when appropriately leveraged with sound training, private security could truly be the force multipliers. However, Manoj Dewan, head of security and transport, Bharat Hotels, termed contract guards as “industry orphans” who possess minimal professional skills. Perhaps a sea of opportunity now exists for the private agencies provided they can transform themselves to a well-trained and integrated force multiplier for the average citizen.

ashish.sinha@businessworld.in;
paramita@businessworld.in

(This story was published in BW | Businessworld Issue Dated 11-01-2016)