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It isn't an uncommon sight these days when the Indian Premier League is raging to see Mukesh Ambani, owner of the Mumbai Indians team, cheering from one of the corporate boxes at the Wankhede Stadium. The next time you see the chairman of Reliance IndustriesBSE -3.19 % Ltd ( RILBSE -3.19 %) applauding his boys, don't be surprised to see him surrounded by not just hangers-on but a circle of security cover.
Earlier this week, India's richest man became the first individual from the private sector to get paid government security. Uniform-clad commandos from the Central Reserve Police Force (CRPF) sporting AK-47s will accompany Ambani whenever he steps out.
With India boasting some 55 billionaires (as per the latest annual Forbes list of the world's richest people), you would expect other industrialists to follow suit. Perhaps, but that may not come in a hurry. India's moneybag promoters are currently grappling with the problem of finding security for the corporations they control including headquarters, factories and offices from the organisation responsible for it, the Central Industrial Security Force (CISF).
Files at the Union home ministry in Delhi indicate that although there's a mad rush among private sector companies for security from the government for their premises and factories, only a few have got it. At last count as many as 158 private sector units had made requests to the home ministry for CISF security cover but the Centre has chosen only six, according to a recent disclosure by the ministry in Parliament.
IN THE CROSS HAIRS
Government security cover either for CEOs or their operations does not come cheap: Ambani will be paying close to Rs 15 lakh every month for CRPF's services while CISF earns nearly Rs 2.1 crore every month from the six private units it guards, including Ambani's Jamnagar refinery. CISF has earned close to Rs 65 crore from its private sector clients since it started giving them security in 2009 after the Mumbai 26/11 attacks.
"The experience of guarding the private sector units has been excellent. They've never delayed paying our security bills," director general of CISF Rajiv told ET Magazine.
The reason for opting for a government security cover is simple. Private security agencies cannot procure sophisticated weapons like AK-47s and Insas rifles that are the standard gear of CISF or CRPF. All 33 CRPF commandos in the security set-up for Ambani will be armed with these weapons and since they will work in shifts, at least 13 armed men will accompany Ambani at any given point of time.
CISF, for its part, is also adequately armed. For instance, when it moved into securing the campuses of InfosysBSE -0.66 % in Bangalore, Pune and Mysore, its men moved in with mortar, in addition to Insas rifles and AK-47s. Each of the private sector units guarded by CISF be it the Electronic City in Bangalore or the Delhi Airport Metro Express has a dedicated CISF quick reaction team and patrols to intervene in case of a terror strike. CISF also sets up a command and surveillance centre at each of these private sector units to monitor all activity through CCTVs.
With almost 45 years experience of guarding nearly 300 government and public sector units, including all domestic and international airports in the country, CISF's access control standards are considered among the best one can get in India. In fact, many corporates have also opted for consultancy from CISF on how to secure their premises.
The corporate rush to get government security began after the 26/11 attacks and Parliament passing the CISF (Amendment) Act in 2009 to approve a policy to provide CISF security to critical and vulnerable establishments in the private sector on a cost reimbursement basis.
Infosys in Bangalore was the first to get CISF security from 101 security men on July 31, 2009 for which it pays nearly Rs 27 lakh a month. Subsequently, the Infosys campuses in Mysore got security from 48 CISF men in 2010 at a monthly cost of Rs 14 lakh and the one in Pune got a 134-man strong cover in 2011 at a cost of Rs 33 lakh each month.
Bangalore's Electronic City, home to many private companies, including Wipro and Mahindra, got a 68-person CISF security cover in 2010. The same year saw one of the biggest deployments of CISF in the private sector at RIL's Jamnagar Refinery when 217 security men moved in to protect the establishment. RIL pays CISF almost Rs 34 lakh a month for the job.
The latest private sector unit to get CISF cover which also happens to be the largest for any private sector unit is the Delhi Metro Express Line, which is guarded by 419 CISF men at a monthly cost of Rs 84 lakh. This project has been developed in a public-private partnership by Reliance Infra.
QUEUE GETS LONGER
But there are over 150 companies whose requests for CISF security are pending with the government (see Many Didn't Get Cover...). A senior home ministry official said the reason for not obliging is straightforward: there is not enough manpower with CISF. "CISF has about 1.22 lakh men who provide security cover to 300 units, including 58 airports. The force is completely stretched. To accommodate the requests from all the 150 corporates, the strength of the force will have to be at least doubled," the official said. He added that the ministry had decided that the IT, power and oil sectors would be given priority.
"The first preference is petroleum and IT installations whose products or services are vital to the country's economic security and growth and whose loss or serious damage would affect India's international image," the official said. He added that IBM India in Bangalore and a Reliance gas project off the Kakinada coast in Andhra Pradesh were next in line for getting CISF security.
"The amendment to the CISF Act also stated that CISF can be provided only for private sector units of strategic importance," says a former head of CISF who did not want to be quoted. Also, CISF takes on various other roles for the public sector like manning entry and exit gates and maintaining records of vehicle movement, protecting power installations whereas for the private sector it only provides the firepower. Therefore demand for further deployment from PSUs always exceeds private sector demand.
PRIVATE GUNS
One solution to India Inc's insecurity would be to allow private security agencies to provide cover. Under the current laws, private agencies are not allowed to provide armed guards. If an agency does provide the service, it is via a complicated procedure: anyone can get an arms licence and buy a gun if there is a perception of threat; armed guards provided by agencies today all hold personal licences and seek a job with the agencies after getting that licence. The flipside is that these men are allowed to fire only in self-defence.
Rituraj Sinha, co-chairman of the Ficci sector committee for private security agencies, has been lobbying with the government for such agencies to deploy armed guards; for this changes in the Private Security Agencies Regulation Act 2005 are needed. The changes being considered involve allowing armed personnel to be provided in three specific areas: security of high-profile industrial establishments, cash transfers by banks and high-profile business people
Mukesh Ambani’s 'Z' category cover: Why corporates prefer government security - Page3 - The Economic Times
Earlier this week, India's richest man became the first individual from the private sector to get paid government security. Uniform-clad commandos from the Central Reserve Police Force (CRPF) sporting AK-47s will accompany Ambani whenever he steps out.
With India boasting some 55 billionaires (as per the latest annual Forbes list of the world's richest people), you would expect other industrialists to follow suit. Perhaps, but that may not come in a hurry. India's moneybag promoters are currently grappling with the problem of finding security for the corporations they control including headquarters, factories and offices from the organisation responsible for it, the Central Industrial Security Force (CISF).
Files at the Union home ministry in Delhi indicate that although there's a mad rush among private sector companies for security from the government for their premises and factories, only a few have got it. At last count as many as 158 private sector units had made requests to the home ministry for CISF security cover but the Centre has chosen only six, according to a recent disclosure by the ministry in Parliament.
IN THE CROSS HAIRS
Government security cover either for CEOs or their operations does not come cheap: Ambani will be paying close to Rs 15 lakh every month for CRPF's services while CISF earns nearly Rs 2.1 crore every month from the six private units it guards, including Ambani's Jamnagar refinery. CISF has earned close to Rs 65 crore from its private sector clients since it started giving them security in 2009 after the Mumbai 26/11 attacks.
"The experience of guarding the private sector units has been excellent. They've never delayed paying our security bills," director general of CISF Rajiv told ET Magazine.
The reason for opting for a government security cover is simple. Private security agencies cannot procure sophisticated weapons like AK-47s and Insas rifles that are the standard gear of CISF or CRPF. All 33 CRPF commandos in the security set-up for Ambani will be armed with these weapons and since they will work in shifts, at least 13 armed men will accompany Ambani at any given point of time.
CISF, for its part, is also adequately armed. For instance, when it moved into securing the campuses of InfosysBSE -0.66 % in Bangalore, Pune and Mysore, its men moved in with mortar, in addition to Insas rifles and AK-47s. Each of the private sector units guarded by CISF be it the Electronic City in Bangalore or the Delhi Airport Metro Express has a dedicated CISF quick reaction team and patrols to intervene in case of a terror strike. CISF also sets up a command and surveillance centre at each of these private sector units to monitor all activity through CCTVs.
With almost 45 years experience of guarding nearly 300 government and public sector units, including all domestic and international airports in the country, CISF's access control standards are considered among the best one can get in India. In fact, many corporates have also opted for consultancy from CISF on how to secure their premises.
The corporate rush to get government security began after the 26/11 attacks and Parliament passing the CISF (Amendment) Act in 2009 to approve a policy to provide CISF security to critical and vulnerable establishments in the private sector on a cost reimbursement basis.
Infosys in Bangalore was the first to get CISF security from 101 security men on July 31, 2009 for which it pays nearly Rs 27 lakh a month. Subsequently, the Infosys campuses in Mysore got security from 48 CISF men in 2010 at a monthly cost of Rs 14 lakh and the one in Pune got a 134-man strong cover in 2011 at a cost of Rs 33 lakh each month.
Bangalore's Electronic City, home to many private companies, including Wipro and Mahindra, got a 68-person CISF security cover in 2010. The same year saw one of the biggest deployments of CISF in the private sector at RIL's Jamnagar Refinery when 217 security men moved in to protect the establishment. RIL pays CISF almost Rs 34 lakh a month for the job.
The latest private sector unit to get CISF cover which also happens to be the largest for any private sector unit is the Delhi Metro Express Line, which is guarded by 419 CISF men at a monthly cost of Rs 84 lakh. This project has been developed in a public-private partnership by Reliance Infra.
QUEUE GETS LONGER
But there are over 150 companies whose requests for CISF security are pending with the government (see Many Didn't Get Cover...). A senior home ministry official said the reason for not obliging is straightforward: there is not enough manpower with CISF. "CISF has about 1.22 lakh men who provide security cover to 300 units, including 58 airports. The force is completely stretched. To accommodate the requests from all the 150 corporates, the strength of the force will have to be at least doubled," the official said. He added that the ministry had decided that the IT, power and oil sectors would be given priority.
"The first preference is petroleum and IT installations whose products or services are vital to the country's economic security and growth and whose loss or serious damage would affect India's international image," the official said. He added that IBM India in Bangalore and a Reliance gas project off the Kakinada coast in Andhra Pradesh were next in line for getting CISF security.
"The amendment to the CISF Act also stated that CISF can be provided only for private sector units of strategic importance," says a former head of CISF who did not want to be quoted. Also, CISF takes on various other roles for the public sector like manning entry and exit gates and maintaining records of vehicle movement, protecting power installations whereas for the private sector it only provides the firepower. Therefore demand for further deployment from PSUs always exceeds private sector demand.
PRIVATE GUNS
One solution to India Inc's insecurity would be to allow private security agencies to provide cover. Under the current laws, private agencies are not allowed to provide armed guards. If an agency does provide the service, it is via a complicated procedure: anyone can get an arms licence and buy a gun if there is a perception of threat; armed guards provided by agencies today all hold personal licences and seek a job with the agencies after getting that licence. The flipside is that these men are allowed to fire only in self-defence.
Rituraj Sinha, co-chairman of the Ficci sector committee for private security agencies, has been lobbying with the government for such agencies to deploy armed guards; for this changes in the Private Security Agencies Regulation Act 2005 are needed. The changes being considered involve allowing armed personnel to be provided in three specific areas: security of high-profile industrial establishments, cash transfers by banks and high-profile business people
Mukesh Ambani’s 'Z' category cover: Why corporates prefer government security - Page3 - The Economic Times
