A smart operation

The smart card-based vehicle registration certificate project introduced in Delhi, which has given rise to charges relating to, among other things, the choice of technology, causes concern about the use of IT in the road transport sector across the country.

THE induction of Information Technology (IT) into the country's road transport sector is apparently coming under a cloud following a series of developments in the recent past. Questions are now being asked on matters ranging from the criminal antecedents of some of the private sector technology firms involved in the initiative in different parts of the country to the appropriateness of the technology used by them in the projects in various States.

An important question is whether the induction of IT in the road transport sector is actually fulfilling its objectives - of standardising transport documents across the country in a digital format to facilitate smoother functioning of the Transport Department and assure greater security and easier operability for the average consumer; or whether it has turned into another exercise to misuse and siphon off public funds.

The revelations about the delinquent background of some of the players involved in the IT initiative have also raised doubts whether the scheme would actually live up to its professed purpose of enhancing security systems in transport documentation. With more and more State governments opting for the induction of IT in the transport sector, these questions are growing in strength and acquiring ominous proportions with each passing day.

Here is a record of some of the unseemly happenings related to this sector in the past few months. On June 30, the Central Bureau of Investigation (CBI) raided the office and residential premises of Vivek Nagpal, one of the directors of Shonkh Technologies International Limited (STIL), a major company in the IT initiative in the road transport sector. STIL has devised and is supplying smart optical card vehicle registration certificates (VRCs ) in New Delhi and in Gujarat, and has been awarded a contract for such cards in Maharashtra, though implementation of the project is yet to begin in that State. By its own claims, STIL is engaged in business worth over Rs.1,000 crores in the smart card sector in Delhi and three major States - Uttar Pradesh, Gujarat and Maharashtra.

The CBI raid was based on a criminal complaint filed against STIL in January by Oriental Bank of Commerce (OBC) accusing it of causing a loss of Rs.38.49 crores to Global Trust Bank, which later merged with OBC. The CBI probe also covered allegations about STIL's role in the securities scam. The Securities and Exchange Board of India (SEBI) had, through its own inquiries, confirmed STIL's associations with Ketan Parekh, the kingpin of the scam, and it issued critical directives and orders against the company in September 2004 and June 2005.

The SEBI orders said that STIL had benefited "through market manipulation and irregularities in the trading of the shares" and was "part of a larger scheme to manipulate the prices of the scrips". The SEBI probe against STIL was on since early 2001. The Delhi government awarded the VRC contract to STIL in 2002, while investigations by SEBI and other agencies were under way. The CBI is now inspecting whether this action of the Delhi government was in order.

In neighbouring Uttar Pradesh, too, STIL is under a scanner. The State government, including its Law Department, has initiated steps to review the award of a tender to the company to prepare and supply "high security electronic number plates" (ENPs), following revelations that Vivek Nagpal has defaulted on payments running into crores to the Uttar Pradesh Industrial and Investment Corporation. According to details posted on the Corporation's web site, Padmini Technologies, a company owned by Nagpal, has defaulted to the tune of Rs.5.97 crores. The amount has been due since February 2004.

On May 10, Rajya Sabha member and Revolutionary Socialist Party (RSP) leader Abani Roy wrote to the Prime Minister and the Home Minister, saying that Nitin Shah, the managing director of Shimnit Utsch, another major firm involved in the IT initiative in the road transport sector, was a co-accused with underworld don Babloo Srivastva in the case regarding the murder of Lalit Suneja, Shah's former employee. Roy also pointed out that Shah had been booked under the Conservation of Foreign Exchange and Prevention of Smuggling Act (COFEPOSA) twice.

On April 24, the West Bengal government cancelled the tenders it had floated for supply of "high security electronic number plates" for vehicles. The decision came in the background of findings that the papers submitted by one of the bidders - Peruvian firm EHA Schider and Werbeteschnik Hoffman - in support of its technical bid were false. A report from the Indian High Commission in Peru exposed the false claims of Hoffman. Experience in supplying number plates was a key criterion for the selection of bidders, and the report from Peru stated categorically that Hoffman did not have the kind of experience it claimed to possess.

N.N. Krishna Das, Lok Sabha member of the Communist Party of India (Marxist), has raised many of these issues before the Central government through letters to the Prime Minister, the Finance Minister and the Minister for Road Transport. "The fundamental question," he told Frontline, "is whether the government and the law enforcement agencies can allow a free run to those with suspicious backgrounds in an area as vital as digital documentation of transport records." Krishna Das added that the security dimensions of the sector were expanding day by day and the need for a thorough inspection of the private players involved and the technology they were bringing was necessary at every stage.

The emphasis of the M.P. is essentially on the security dimensions of the technology that is being inducted, but if one is to go by the experience in Delhi - where the smart optical card VRC is mandatory - the technology that has been brought is not very efficient. The publicity claim of the Delhi government's Transport Department and of STIL is that they have taken the lead in implementing the most technologically advanced IT initiative in the world transport sector. The claim is founded on the fact that smart optical cards are not used anywhere else in the world for the registration of vehicles. However, since it was launched in January, the IT initiative has been characterised by delays ranging from one month to three months in the issue of smart optical card VRCs. Interestingly, the claim of the Delhi transport Authority as well as STIL, when the smart optical card VRCs were made mandatory approximately seven months ago, was that the certificates would be delivered in a single day. The claim still figures prominently in the huge billboards put up at many DTA offices. Approximately two lakh vehicles have been registered in the smart optical mode in Delhi since January. According to a vehicle dealer in the city, it would be a Herculean task to find even a single vehicle whose registration process was completed in the promised "single day". "Digital technology is supposed to increase speed and efficiency, but the DTA seems to have converted it into something that works in the reverse direction," he added.

It is in this context that doubts have intensified about the appropriateness of the technology being used. Central to these doubts is the fact that the optical card segment is a value addition that the State government has provided to the original standards designed by the Union government. The original standards, designed under the guidance of the National Informatics Centre (NIC) in 2001, stipulated the use of a 4 KB microchip processor in smart card VRCs. The standard was set on the basis of an NIC study, which showed that the basic documents for vehicle registration could be fed into a microchip processor of 1 KB capacity. The documents, in fact, would take up only 0.98 KB space. However, considering the possibility of resale of vehicles and the need for re-registration, the NIC suggested that a 4 KB micro-chip processor would be appropriate for the smart card VRCs. The Union government accepted this and also made it clear that the technology to be used in the smart card VRCs should be "non-proprietary" so as to ensure future indigenous development by independent agencies.

But the smart card VRCs issued in Delhi has not only the 4 KB microchip component but also a 1.5 MB optical card segment. The Delhi government incorporated this additional technology on the grounds that it needs to feed supplementary documents into the card through a process of scanning. The Union government, on its part, put the stamp of Central government approval on this "value addition" through a gazette notification dated August 10, 2004, which has generated a lot of controversy in itself.

The DTA scan and feed about 15 pages of data into the optical card segment after feeding in the basic data in the microchip section. According to Navnit Gulati, senior vice-president of STIL, a 1.5 MB optical card can accommodate as many 1,200 pages of text data. He added that the additional capacity is for feeding new documents at the time of resale and re-registration. It is a moot question whether such simple processes as resale and re-registration justify a hundred-fold increase in capacity, especially in the background of the fact - corroborated by a large number of IT specialists - that a higher capacity microprocessor chip would have been more cost effective and secure. Also, Delhi has only two optical strip readers in the city and this is certainly one of the causes for the inordinate delays in the issuance of VRCs.

Interestingly, the DTA has admitted, responding to a query from B.L. Joshi , the Lieutenant-Governor of Delhi, in May that it had not conducted any special technical tests before deciding that the optical card segment was best suited for addressing its additional requirements in the VRC. An IT engineer working with a cyber security firm in Delhi commented jokingly that with this kind of capacity the smart optical card VRCs could carry pictures of the vehicle, its changes through the years, and the various owners it might have over a period of time.

But the implication that this "value addition" in terms of technology has on the price of the card is no joking matter. The maximum fee stipulated by the Union Ministry, when it finalised the standards for the smart card VRC, was Rs.200. But with the induction of the optical card segment the fee in Delhi is Rs.370 while in Gujarat the smart optical cards supplied by STIL have different fees for different types of vehicles; Rs.200 for two-wheelers, Rs.400 for four-wheelers and Rs.600 for commercial vehicles. In Maharashtra, where again STIL is to supply the smart optical cards, the price has been fixed at Rs.440. Contrast these prices with that of the simple microprocessor smart card in Jharkhand - Rs.49.

The chief beneficiary of the optical card "value addition" has been STIL. The company, according to its president Atul Anand, has bagged contracts for smart cards of both kinds in many States. In Maharashtra, the company has a Rs.350-crore order for the supply of 10 million cards to be executed over the next 15 years. In Gujarat, it has a contract for Rs.180 crores for six million cards and in Delhi it is a Rs.148-crore contract for 40 lakh optical memory cards.

According to Krishna Das, the "value addition" to the card as well as the disparate pricing has, in many ways, defeated the very purpose of inducting IT into the road transport sector. He pointed out that when the Union Ministry initiated measures four years ago to induct IT in this sector, the basic objective was standardisation of documents maintained and issued by transport authorities across the country. "Given the experience in Delhi, each State will adopt one additional technology or the other in the name of feeding in supplementary data at the cost of the much required uniformity and inter-operability."

Indeed, Rajasthan and Kerala have scrapped initial moves to have "smart microprocessor chip" cards and invited tenders for smart optical cards. The reasons given are the same as in the case of Delhi; that the cards require additional capacity. Clearly, the IT initiative in the road transport sector is continuing its wayward march.