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Jan 2017 Sectoral

Published on: 2017-01-16 15:18:21     2076 times read    0  Comments
Thriving Business of Security

In a world full of insecurity, security services companies are providing their clients a peace of mind.

--BY KRISHANA PRASAIN

With the increasing business and economic activities, the demand of private security guards has been rising in Nepal. The growing security threats in the recent years led the companies in various sectors, residential housing colonies and apartments, foreign diplomatic missions and development agencies to deploy private security personnel who are always on standby to ensure security of people and property. 

To name a few, G4S Security Services Nepal, Garud Securities, Kalinchok Security Services, Rhino Security Service, DD Security Services, Lahure Security Guard Suppliers, KTM Group, Trimurty Security Service and Kantipur G Force are among the major companies providing top-notch professional security services in Nepal.   

A lucrative business
Though the size of the Nepali security services market is yet to be determined, the companies here are doing brisk business. G4S, for instance, saw annual turnover of over Rs 800 million last year. Similarly, Garud Securities has monthly turnover somewhere between Rs 70 million to Rs 70.5 million. “If we move on same speed, then the turnover will be Rs 90 million per month,” projects Abhishek B Karki, Administration Head of Garud Securities. “We are the largest security services provider in Nepal in terms of turnover,” he claims. According to him, the last year’s turnover was Rs 600 million. Likewise, Kalinchok Security Services turnover was Rs 100 million in 2015. “We are targeting for Rs 150 million,” shares Madhusudan Raymajhi, General Manager of the company. 

Among the companies in Nepal, G4S is a British multinational firm active here since 1996. It has nationwide presence and provides tailor-made services in multiple areas of manned security, facility management, cash security services for BFIs along with modern electronic safety security systems such as surveillance cameras, advanced alarm systems, integrated access control and fire detection.  “We are an MNC. So, our demand in the market is due to the quality consciousness among the clients and our guaranteed services,” says Mahesh Shrestha, Managing Director of G4S. He adds, “In case of any damage to the client due to some lapse from our side, G4S bears the burden of the loss incurred.” 

Similarly, Garud Securities has been providing various types of services across the country. Established in 2005, the company has four subsidiaries namely, Garud International, Garud Energy, Garud Training System and Garud Support Services, all of which are active in producing, developing and deploying manned as well as electronic security services. The firm was well praised for providing high-end security service during the concert of Canadian rock star Bryan Adams in 2011 in Kathmandu. It had deployed 500 personnel for the event. Apart from its regular activities, the company also has partnership with four international travel companies to provide security to tourists visiting in Nepal.  Currently, Garud is planning to obtain an international certificate for Cash-in-Transit service. The company also is planning for disaster response where it will have a standby vehicle for the transport of equipments. 

Likewise, Kalinchok Security Services which was formed in 1999 is also in the forefront of security business in Nepal. The company has been providing an array of physical and electronic security services to its clients.  

Though there are no official data regarding the number of security services providers, Nepal Trade Union Congress affiliated Nepal National Security Guard Workers Union (NNSWU) estimates that there are around 1,000 such companies and around 110,000 personnel working across the country. Nevertheless, there are some companies that are registered but are not functioning at present, according to Abhisekh B Karki of Garud Securities. “The government only has data of registered companies and every year only over 50 percent renew their licenses,” he mentions. 

Ex-police and army servicemen are preferred by the companies as they are well trained and disciplined, follow appropriate protocols and have a good know-how regarding the use of equipment.  “ However, both types of private security personnel are working at present, ex-army or ex-police as well as civilians,” mentions G4S Managing Director Shrestha.  Nowadays the clients of security companies also look for security personnel who can speak English. The hierarchical structure of the workforce is somewhat similar to the ranks of government security forces. Mostly formed and operated by ex-servicemen, the core teams of these companies comprise security specialists, former investigators of army, police and officials of international security organisations.  

Clientele
G4S has 4,500 security guards and its presence has expanded to 55 districts over the years. It mainly serves government and diplomatic agencies, industries, BFIs, IT and telecom services providers, commercial complexes, educational institution and private residences. Garud, meanwhile, is present in 49 districts and has approximately 3,500 security personnel. It is providing services to diplomatic missions, UN agencies, various BFIs, Nepal Airlines Corporation, Soaltee Hotel, Annapurna Hotel, QFX cinema halls, Manakamana Cable Car, Chandragiri Cable Car, Jyoti Group and Golchha Organization along with hospitals and residential apartments. Likewise, Kalinchok has 1,500 guards and has a nationwide presence. Some of its major clients are Rastriya Bannijya Bank, Nabil Bank, Agricultural Development Bank, Bank of Kathmandu, Nepal Bangladesh Bank, Nepal Rastra Bank and Udaypur Cement. As per the company, the Royal Norwegian Embassy in Kathmandu will be added to its client’s list soon.     

Need of regulatory framework
Till now no specific Act or policies have been introduced for the proper regulation of private security business. In the lack of regulatory framework, security business has become easy investment option for many. As per industry sources, there are many companies only with 10-12 personnel without proper training or equipment. This has resulted in various anomalies regarding the market competition among the security services providers. “Companies with 4,000 security personnel as well as those having five or six guards are being operated and competing for the same market,” says Karki. Since security service is a very sensitive business related to the lives and property, industry people are strongly demanding the government to set strict criteria.  

Private security services are being regulated by business-friendly rules and regulations in many countries. Similarly, government accredited security training academies provide training for the people aspiring to work in the security business in different nations across the globe. In India, for instance, the Private Security Agencies (Regulation) Act, 2005 is effectively regulating the security business covering everything from registration of firms, exit of investors from the companies to the areas of compliance. Meanwhile, in United Arab Emirates (UAE) there is a separate government department of private security where every security services provider is required to report about the number of personnel as well as appointment of new clients in weekly or monthly basis.

Deficient manpower
Deficient human resource is major problem for Nepali private security companies hindering in terms of their business expansion. As many Nepalis look for jobs abroad, there is a lack of skilled workforce in the security business.  “The lower level security personnel working 12 hours a day here get Rs 15,600 per month as per the Labour Act,” informs Karki. On the contrary, Nepalis working as security guards in Gulf countries and Malaysia, for example, can make a minimum saving of around Rs 60,000 monthly. In the meantime, lucrative salary ranges for private security personnel in conflict affected countries such as Afghanistan and Iraq have also attracted Nepalis. According to industry sources, Nepali security staffs in these countries can earn a minimum of Rs 150,000 per month. 

Due to this difference, skilled manpower is more interested for overseas jobs. “There are instances where we have cancelled the contract due to insufficient manpower,” shares Karki. 

G4S, Garud, Kalinchowk are among the few companies that observe the minimum wage requirement. They provide facilities such as insurance, provident fund, health expenditures as well. Similarly, the guards providing security in embassies and offices of foreign diplomatic missions get extra remuneration. Some hotel clients also provide free meal to the on-duty guards. 

Training
Few companies have their own dedicated training centers where they provide all kinds of physical and equipment related trainings to the staffs. G4S provides 88 credit hour training to new recruits. The company also has started to provide training for the disaster response. 

Potential of foreign expansion
The long held reputation of ‘Gurkhas’ has been a key factor for the strong demand of Nepali security personnel internationally. Nevertheless, it is an irony that Nepali security services providers are not able to exploit this potential as existing rules and regulations have barred them from providing services abroad. “Opening of branch offices in other countries can be beneficial to us as well as the country economically,” Opines Karki. “This would also help to expose our management as well as services in the international level,” he adds. 


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