Friday, May 23

TCS bags deal to process passport applications

MUMBAI: In what could be one of the most prestigious and lucrative wins in the domestic outsourcing market, infotech major Tata Consultancy Services (TCS) has won the contract for processing Indian passport applications. This is the first time passport processing has been outsourced, and the race is believed to have been keenly contested by some large public sector undertakings as well as IT and BPO firms with some large government contracts to their credit. TCS will now handle all the processing work related to the issuance of passports, including police verification and other procedures, the only exception being the printing of the passport, which will continue to be with the Ministry of External Affairs (MEA), sources close to the development told ET. “TCS emerged as the lowest bidder after the technical shortlist,” a source said. The contract size could be larger than Rs 1,000 crore, considering the volume of applications processed every year. The MEA processes close to 80 lakh passport applications a year and the number is growing every year at close to 20%. The bid put in by TCS is learnt to be a little less than Rs 200 per passport, giving it around Rs 900 crore in revenues over the six-year duration of the contract, even if the volumes do not grow. TCS refused to confirm or deny the development. When contacted, a TCS spokesperson said the company had no comments. However, sources said the bids were finalised this week and Spanco Telesystems, along with Siemens and ILFS, was one of the four bidders after the list was narrowed down from six bidders. 3I Infotech, Wipro, Bharat Electronics and Electronics Corporation of India were also reportedly in the race. Wipro is believed to have made it to the final shortlist, but a source said it had quoted a higher processing fee. Based on the pricing, the contract was eventually awarded to TCS. Unlike the earlier contract from the Railways, the MEA contract will not have any revenue-share component. The transaction fee of Rs 200 or so will be paid by applicants directly to TCS, which will run the passport centres out of 72 locations in the country. The government and state-run departments are among the largest customers for IT vendors and service providers targeting the domestic market. Multinational vendors such as IBM and Hewlett Packard have identified the government sector as their key focus area, along with telecom and financial services. From an IT vendor’s perspective, the size and complexity of the projects not only make it lucrative but also offer huge opportunities for learning and the ability to take on similar projects in overseas markets.

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