Tuesday, July 04, 2006

Private security firms squeezed out by the state

State security personnel, formerly under the Ministry of Interior umbrella, have struck a crucial blow to the private security firms, something which is bound to eliminate any kind of competition in the security personnel services market.

It was hoped that once the “VOJR” section on the Ministry of Interior was separated from the state forces in 2005 (to form FGUP Okhrana), the competition would have a chance to increase its share on the market which includes guarding warehouses, apartments and carrying out private detective work.

But the new law recently approved by the president states that former state security personnel are allowed to use weaponry and guard dogs to defend themselves, something which is prohibited for the private companies. Additionally they are allowed to enter premises without seeking permission if they believe that a criminal is hiding within.

Not surprisingly such move has virtually wiped out any signs of competition in the market which was valued in 2005 at around USD4.3 billion. Analysts say that this represents yet another attempt at monopolisation of the market by the state-controlled company. At present, FGUP guards around 16,000 objects in Russia.

No such law exists in any other developed country. In Great Britain, private security personnel are even allowed to participate in the Iraq war operations.

Vedomosti

Links:

FGUP Okhrana Webpage

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