A new report from Frost & Sullivan has revealed the full extent of investment taking place to secure the EU accession states’ eastern external borders. Since 2004, nearly US$2.5 billion dollars (estimated until 2009, including investments in Romania and Bulgaria after joining the EU in 2007) have been invested in these borders.
According to the report, Border Security Market Assessment – EU Accession States, market revenues will grow from US$777.8 million in 2008 to US$1,245.9 million in 2017, representing a compound annual growth rate (CAGR) of 4.8%.
"In the past three years, nine of the twelve EU accession states (excluding Romania, Bulgaria and Cyprus) have made significant investments in border security to comply with the high-level security standards mandated by Schengen," says Abdallah Binmadhi, research analyst at Frost & Sullivan. "These include investments in construction, renovation and upgrading of border-crossing infrastructure, operating equipment such as laboratory equipment, detection tools, hardware, software, means of transport as well as logistics and operations."
According to Frost & Sullivan, investment will focus on the EU external border management tools required to comply with the Schengen requirements. These include operational equipment (movement optical sensors and vehicles), border infrastructure tools, and the Schengen Information System (SIS) and visa information system, including biometric technology.
In order to include Romania and Bulgaria in the Schengen zone, the European Commission (EC) has allocated Schengen Facility II funds to both countries, of which 70% will be used for implementing the Schengen Aquis and external border control in the next three years.
“The EC’s Directorate-General for Justice, Freedom and Security has established US$ 2 billion as part of the external border funds that will be used for implementation of common standards on control and surveillance of external border policy to be invested until 2013,” says Binmadhi. “About a quarter of these funds will be invested in the EU eastern borders.”
“The border security market in the EU accession states is fragmented, and there is no single institution in each of these countries that manages procurements and contracts,” says Frost & Sullivan. “Governmental institutions to invest funds for border security also vary from country to country. Moreover, corrupt and fraudulent procurement practices are considered a real problem.”
“The high level of local protectionism can be significant in certain EU-accession states. Furthermore local companies are preferred to foreign competitors during bidding,” cautions Binmadhi. “To overcome this challenge, there is a need to forge strategic partnerships with local companies, certifying that enforcement of the EC competition rules (policies on state aid, merger control and anti-trust) are being applied, and that efficiency and innovation are being encouraged and duly rewarded.”