1.
Introduction
1.1.
International Civil Aviation
Organisation of United Nations has formulated the specifications for e-passport
and it paved way for entire world to come-up with e-passport and avail its
benefits. India, too, is likely to
decide about switching over to this system in near future. Within the next year, travelers from more than
40 nations may be carrying a new form of passport in response to the decision
taken by ICAO of UN and US Government.
This passport is popularly called ‘e-Passport’. It deploys two new technologies – Radio
Frequency Identification and Biometrics.
Radio Frequency Identification (RFID) denotes a family of technologies
that communicate data wirelessly from a small chip, often called a “tag”, to a
device called reader.
1.2.
ICAO has prescribed
specification for e-passport which relies on the International Organization for
Standardization (ISO) 14443 standard. It specifies use of a radio frequency of
13.56 MHz. The “tags” in these standards
are passive as they are not powered; instead they derive power from the signal
being emitted by the reader. Biometrics
is a technology of verification of human identity through measurement of biological
characteristics. Recognition of these
characters is biometric authentication.
This process is followed day in and day out by every human being (and
even animals). Automation of biometric
authentication is the technology commonly known as biometrics. Thus, it means authentication of biological
characteristics from human-to-computer.
1.3.
Popular computer oriented
biometrics include finger prints, face recognition and irises. These are the three biometrics favoured for
e-passport deployments. Face recognition
involves photographic imaging of the face; finger print recognition is imaging
and on automated process very loosely analogous to the finger prints matching
used in criminal investigations. Finger print scanners can take on optical or
silicon-sensor forms. Iris recognition also involves imaging. The iris is the coloured annular position of
the eye around the pupil. Iris scanning
in biometric systems takes place via non-invasive scanning with a high precision
camera. The device that captures user
data is called sensor.
1.4.
E-passports are also the
harbinger of wave of next generation ID Cards.
Major initiative by the Government is to assimilate the two technologies
in getting a passport made which may act as a very effective identity card of new
generation. Together RFID and biometric
technologies have potential to reduce fraud, smoother handling of the
documents, quicker identity checks and enhance security. E-passport also offers substantial benefits
to the rightful holder by providing a secure means to confirm that the passport
belongs to him or her and it is authentic, without compromising the privacy of
the holder. It contains electronic
data; hence validation and authentication of data with central data base can be
done very quickly. Thus, there will be
reduction in time taken in inspection systems which may be automated to great
length. These are security concerns
leading to slimming, clandestine scanning, clandestine trading, cloning,
biometric data leakage or eavesdropping which are being addressed and
technological advancements need to be utilized to take care of this problem.
1.5.
United Nations and most of the
Europe have started using e-passport.
International Civil Aviation Organisation of United Nations has
formulated the specifications for e-passport and it has paved way for entire
world to come-up with e-passport and avail its benefits. India, too, will switch over to this system for
all types of passports/travel documents.
2.
E_passports in India :
2.1.
In India there is requirement
of about 10 million passports in a year and there is further requirement of 30
million passports for replacement of old designs’ passports in coming
years. There is long pendency in supply
of passports and requirement of going in for production of e-passport is more
challenging. Currently India Security Press
(ISP), Nashik Road (a unit of Security Printing and Minting corporation of
India Ltd.) is engaged in the production of passports and it has got the
facility to manufacture about eight million passports per year. Retrofitting
for inlays’ insertion etc. is required to be done to make the existing machines
capable of handling e-passport work. At present, passport booklet is printed at
ISP and personalization handled by passport offices of Ministry of External
Affairs (MEA). With the advent of
e-passport data security has become more important and modalities to ensure
proper handling of data and data base is the prime concern. Therefore it is
necessary to consider the technologic and security model different from the traditional
security model available at ISP.
2.2.
In addition to increased
production new approach shall also provide answer to data security, continuous
technological upgrade and price discovery of monopolistic supplier. Presently
ISP supplies passport to MEA at cost plus price which is not a very encouraging
model of production of monopolistic goods. However, keeping the security aspect
in mind, nature of the specialized products and lack of expertise to decide
about the input costs, MEA has no option but to accept the cost indicated by
ISP. Any business venture will require resources including funds. Private
sector will not like to invest in any project unless there is certainty of
returns. Quantum of investment in the field of e-passport production will not only
be governed by the acceptance of technological possibilities but also the
arrangement of buy-back of major portion of the production by the government.
2.3.
There are several technological
possibilities which will guide the requirement of investments to be made and
level of activities to be carried out at ISP.
This may be achieved by procurement of machine and technology as done in
the past. However there is a need to look at the possibility to go in for
different models of financing to facilitate better project management and use
of latest technology as elaborated above.
3.
Alternatives :
3.1.
In this regard, selection of
any the following two broad concepts would decide the further modalities of the
proposal:
3.1.1.
Printing of books and basic
data entry in the chip of e-passport may be handled at an entity under Public
Private Partnership (PPP) model.
3.1.2.
In addition to above,
decentralized personalization of individual inputs in the chips may also be
handled by a PPP entity. This will take
care of collection of data, its storage and security. However, MEA will continue to remain the
organization responsible for issuance and validation of passports.
3.2.
In the first scenario there are
following options available:
a. Outright
purchase of machinery and technology.
b. Outsourcing
of part of the activities pertaining to e-passport.
c. Going
in for PPP entity under the supervision of Security Printing and Minting
Corporation of India Ltd. (SPMCIL). PPP entity shall have the backing and
support of an organization having technology to manufacture e-passport.
3.3.
In the second scenario, a PPP
entity may handle the e-passport manufacturing and personalization. Thus it
would be further extension to PPP model mentioned above.
3.4.
In the first scenario the three
options mentioned above are briefly examined as under:
3.4.1.
Outright purchase of
machinery and technology: Under this scheme SPMCIL can purchase
retrofitting for insertion of chip and antenna of e-passport. It may also purchase machinery to manufacture
RFID i.e. assembly of chip and antenna. Machine manufacturer of RFID and inlay
insertion may provide the requisite technological input to facilitate
production of site of SPMCIL i.e. ISP.
This method of procurement has disadvantage of huge investment without
any commitment of technological upgrades in the fast moving field of
e-passport. Further, it will necessitate procurement of latest software from
the vendors tied up with the machine manufacturer. There is a possibility of machine manufacturer
dumping his outdated machine as the procurement process takes considerable time. By the time procurement is finalized, several
technological advancements might have taken which are not offered by the
prospective supplier. Therefore, it is always apprehended that SPMCIL will not
have the machinery and related software commensurate with the technological
developments already taking place globally. Further, due to the marketing
constraints, for travel documents, ISP will be servicing the captive client
i.e. MEA only which will make the job of assessing the technology, quality and
cost of travel documents supplied very difficult.
3.4.2.
Outsourcing of part of the
activities pertaining to e-passport: Under this scheme, semi finished passport books printed at ISP may
be provided to a service provider who may do the insertion of inlays. This will not require any additional
investment at ISP. However, this will
neither lead to any increase in scope of work of SPMCIL nor enhance the
technological capabilities of the same. Further, it has a potential for
security risks and huge cash outflows on a regular basis. It will also require
procurement of services on a regular basis which will involve tendering. While
taking part in the tender, vendor will not be certain to get this business thus
every time a risk premium will be charged by him. Hence the cost of outsourcing
is likely to be more than what can be achieved through a known source or at our
own facilities/premises.
3.4.3.
Going in for PPP by SPMCIL for
an organization having technology to manufacture e-passport: The
third alternative which may be explored is to set up a PPP entity supported by
an established player in this domain with technical know-how of manufacturing
e-passport. By virtue of this partnership the technology partner brings in the
technology, their experience and the expertise of e-passport making and sales.
SPMCIL through ISP will be responsible for the production of e-passport,
providing manpower of the PPP entity with the technology partner having their
representation in the board. Although the e-Passport Project will be the main
activity of the entity, it may at a
later date, take up other assignments viz. smart cards, etc. which will ensure
that the technology partner will facilitate transfer of technology and upgrades
on a continuous basis. The technology with the entity should at any point of
time not be inferior to technology developed by the technology partner in any
part of the world. This arrangement will
ensure that the PPP entity will support ISP in all its future endeavors for
smart card & e-passport projects. Further, this PPP entity will be mandated
to export/sell its product to non-captive market to the extent of 30% of its
production. This will facilitate
discovery of price prevailing in the global market so that SPMCIL is assured of
getting the products from PPP entity at a globally acceptable rate. Since the export will necessarily call for
continuous technological updation, PPP entity will remain profitable only when
latest technology is used in the production of e-passport and other products.
3.5.
Under the
second scenario, above PPP model will further be extended to the
personalization centres. Under this model, MEA is also
required to play a very significant role. Feasibility and success of this
scheme will primarily depend on the opinion, co-operation and acceptance of
MEA. As of now, passport data collection centres collect data from the
individuals seeking passports. This data is sent to the passport issuing
offices. These offices personalize the passport booklets and print the relevant
personal pages of the passport booklet. These offices act as repository of data
pertaining to personalization. This database may be very handy in the case of
e-passport. It may be keyed in the chip at these centres. Safety and
authentication of data as well as use of technology to write the data in a most
safe, secure and authentic manner may be ensured at these centres by the PPP
entity. Data will be handled by this entity PPP ENTITY but it will remain in
the custody of MEA only. Validation of data will also be handled by MEA for
obvious security and technical reasons.
4.
Analysis of Alternatives:
4.1.
Above mentioned alternatives
have strengths and weaknesses. On
evaluation of these options, it is evident that formation of PPP entity for
production of e-passport is the most suitable option. This is primarily due to the fact that SPMCIL
will continuously get the latest technology and it will have the prospect of
venturing into other areas of production, including Smart Cards. Further, it will give a boost to export of
e-passport and other products through this PPP entity.
4.2.
For the
production of e-passport and other security products, it would be appropriate
to consider the formation of a PPP entity having backing of some organization
with excellent demonstrable technological capability.
4.3.
PPP
entity: PPP entity with support
of an established player in this domain with technical know-how of
manufacturing e-passport may be assured of equity of asset support. This may be
almost like a Financial Joint Venture wherein all equipments & assets from
both partners should be transferred on commercial terms to the Special Purpose
Vehicle (SPV). All manufacturing equipments may be purchased by the SPV. Land
and other facilities may be provided by ISP on lease to the SPV. In addition to
the e-Passport Project, SPV may at a later date take up other assignments viz.
smart cards, etc. which will ensure that the technology partner will facilitate
transfer of technology and upgrades on a continuous basis. The technology with
the SPV should at any point of time not be inferior to technology developed by
the technology partner in any part of the world. This arrangement will ensure that the SPV
will support SPMCIL in all its future endeavors for smart card & e-passport
projects. Also this arrangement will ensure that ISP is updated for not only
the current technology but all future technological advances in this domain. Management
may be controlled by SPV technical partner. It will also minimize the financial
and operational risk in acquiring new technology with proper expertise. Further, this PPP entity will be mandated to
export/sell its product to non-captive market to the extent of 30% of its
production. This is necessary to ensure
that correct prices are known to SPMCIL since it will be another captive buyer
of e-passport and other products. This mandatory
export requirement will give way to a very transparent mechanism of discovering
the appropriate price of the products prevailing in the global market. Thus, SPMCIL is assured of getting the
products from PPP entity at a globally acceptable rate. Since the export will necessarily call for
continuous technological updation, PPP entity will remain profitable only when
latest technology is used in the production of e-passport and other products.
4.4.
India Security Press, a unit
of SPMCIL: The main objective of India Security Press
is to provide products requiring high security printing to various departments
of Government of India, State Governments, Banks and other foreign and
international bodies. India Security Press puts its main thrust to ensure the
security in its products, which are exceptionally available otherwise. India
4.5.
Roles and Responsibility: The roles and responsibilities of both
the firms – ISP and the Technology Partner may be summed as below:
4.5.1.
Joint Responsibility
i.
Since it is proposed to be a SPV
almost like a Joint Venture both the organization have to bring in funds
towards the equity of the SPV. The representation in the Board will be from
stake holders including Technology Partner, SPMCIL and MEA.
ii.
70% of the Sales of products
requisitioned by SPMCIL shall be made to SPMCIL. Remaining 30% has to be
exported or sold to un-captive market. For new products, 100% sales may be made
within the country of India or elsewhere but the exports have to be increased
to 30% in a phased manner.
4.5.2.
Responsibility of the Technology Partner and SPMCIL
i.
Technical know-how and technical
recommendation on manufacturing equipments to be bought by the technical
partner of SPV and Training of manpower and Technologically updating of the SPV
from time to time and domestic and International Sales Support.
ii.
SPMCIL shall take care of local
Statutory & other Registrations & Approvals, Land & other
facilities on operating lease to the SPV, Manpower and day-to-day management, Local
Sales Support for the existing products and government liaison.
5.
Recommendation: Based on the above it is recommended to go
in for SPV for e-Passport manufacturing. SPV may be almost like a Financial
Joint Venture with equity participation from stake holders. In this SPV all
equipments and assets shall be transferred from both partners on commercial
terms. All manufacturing equipments shall be purchased by the SPV under
technical advise from the Technology Partner. Land and other facilities to be
provided by ISP on lease to the SPV. Although the e-Passport Project will be
the main activity, SPV may at a later date take up other assignments viz. smart
cards, etc. The Technology Partner to provide an undertaking that they will
ensure transfer of technology and upgrades on a continuous basis. The
technology with the SPV should at any point of time not be inferior to
technology developed by the firm in any part of the world.
With clearly defined roles and
responsibility, SPV will definitely be a successful model to take care of
production and supply and ensure that deficit in passports is not there.
Further, latest technologies will also be available through this SPV under PPP
mode.
Note:
This article was written in 2007 and subsequently updated in 2014. Views are personal and need not necessarily reflect the views of government i.e my employer.
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