Damning indictment: Why for some companies India stands for I'll-Not-Ever-Do-It-Again

Discussion in 'Economy & Infrastructure' started by Rage, Oct 14, 2011.

  1. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Why for some companies India stands for I'll-Not-Ever-Do-It-Again


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    11-Oct-2011

    Many foreign companies see entry into India's booming market as one way of riding out the global financial storm, but Mark Dummett in Delhi says doing business there is not for the faint-hearted.

    Ric Birch has worked all over the world. He is an impresario who organises the opening ceremonies of major international sporting events.

    He has done six Olympics including Beijing, Sydney and Barcelona. He has helped design public extravaganzas in Mexico, Singapore and his native Australia.

    He has also worked in India, where he produced the curtain-raiser for Delhi's Commonwealth Games, one year ago.

    It was not easy. The biggest sporting event in India's history was supposed to be its chance to show off, much as China had done with the Beijing Games. But to those of us watching from the sidelines, the plan seemed to backfire appallingly.

    Indeed, the weeks leading up to the games only seemed to reveal problems.

    Parts of Delhi were flooded by the heaviest monsoon in years, work on the venues was not finished even though the whole thing had run massively over budget, a bridge collapsed, there was an outbreak of dengue fever and some athletes' bedrooms were slept in by stray dogs.

    Payment outstanding

    However, as one government minister had correctly predicted, everything came together at the last minute, just like at an Indian wedding.

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    Ric's team worked like heroes.

    Their opening ceremony was a grand success and, as a giant helium balloon was launched into the Delhi night sky, 60,000 proud spectators bellowed out the national anthem.

    So does Ric ever want to work here again? "No, absolutely not." "India," he says, "stands for I'll-Not-Do-It-Again."

    The final straw for Ric is the fact that he still has not been paid. He says he is owed $350,000 (£225,000) and the Indian government has not told him why he has not received his money.

    "They don't answer correspondence, they've changed their phone numbers, they've changed their email address," he told me. "It's a rogue action."

    Ric is not the only one in this situation.

    According to a list compiled by foreign governments, of the 32 international contractors employed to help run the games, only two have been paid in full.

    The total debt amounts to more than $80m (£50m) and some of the companies are now in danger of folding.

    Their experience seems to support a recent World Bank survey which found that India was one of the hardest places in the world in which to do business, coming a lowly 134th out of 183 countries.

    More damningly still, when it comes to enforcing contracts, the World Bank says that India is actually the second worst, coming only higher than East Timor.


    Investigation

    The Commonwealth Games companies I have spoken to said the Indian government had still not given them any indication as to why they were not being paid.

    But the reason is hardly a secret, and it has to do with the biggest scandal of the games - corruption.

    The man at the centre of things is Suresh Kalmadi, a veteran ruling-party politician, who sat on Parliament's ethics committee, and was appointed to run the Delhi games.

    He is now behind bars, facing charges of taking bribes from contractors - allegations which he denies.

    The government has made it clear that, until all the contracts that Kalmadi issued are fully investigated, the remaining money will not be released. And two independent committees claimed that some of the contracts issued to foreign firms were indeed suspicious.

    One of the British companies they named was SIS Live, which televised the games, and is owed more than $20 million (£13m).
    A spokesman for SIS Live angrily rejected the allegations it had done anything dodgy. Terence Fane Saunders described to me the committees' reports as grotesquely wrong and inaccurate - full, he said, of easily provable errors.


    He claimed that no-one from either committee had contacted SIS Live to check their facts.

    The UK High Commission in Delhi agrees with SIS Live and has written to the Indian government asking it to reconsider its treatment of the company.

    That letter was followed up by a second one, regarding the fate of all the firms, signed jointly by the embassies of Germany, Australia, Italy, Switzerland, France, Belgium, the Netherlands and Britain.

    Neither letter received an official reply and nobody seems to know if and when the money will ever be paid.

    'Too risky'

    Legal action could take years.

    One frustrated Western diplomat admitted to me that it was possible that a few of the companies might indeed have paid bribes but it was inconceivable that all of them had.

    "The whole thing," he says, "sends out a terrible message that doing business in India is just too risky."

    The global economic crisis is now forcing foreign firms to look at India like never before. BP is the latest major firm to invest, recently announcing a joint venture worth more than $7 billion (£4.5bn).

    But Ric Birch, whose company has not been accused of wrongdoing, will not be coming back.

    "I'll be very happy to ignore India," he tells me. "There are plenty of other places where they pay their bills."


    BBC News - India's Commonwealth Games bills still not paid
     
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  3. SPIEZ

    SPIEZ Senior Member Senior Member

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    YUP!!! Here dikshiet ji and What's-his-name-ji stole most of the intended investment
     
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  4. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    Well, where's our government response? This story of 'unpaid bills' keeps coming up again and again. Yet, there is a stony silence from our babus and government. If there is a genuine reason for non payment, Sheila and co. must come into the open, give a press conference - say something! Give your side of the story!
     
  5. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    its seriously an art getting your own money back in india and more so in delhi! :D
     
  6. Daredevil

    Daredevil On Vacation! Administrator

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    Most likely thing might be that some babu or politician thought that they can "gobble up" the funds and ignore these fellows to their fate or they might have run out of the allocated funds meant for CWG due to diversions of funds to buy cost inflated equipments to pocket some side-money. I hope this blows up big in the media. Nothing changes these guys attitude other than naming and shaming. And that's why I say - Delhi sucks :D
     
  7. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    You mean, if you interact with the government or with babus.
     
  8. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    pretty much everyone. gervernment/babus/business community, all of them.

    anyway, GoI has given an explanation. from the article:

    i really doubt these people are going to get their money any time soon at a time when congress is cornered on corruption charges and CWG corruption scandal is in the courts.

    what a shame though!
     
  9. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    The reputation CWG gave to the world was bad enough. This pretty much dooms India as a non-venue state. None of the event companies will come now.
     
  10. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    a better option would have been contracting to the indian firms, doing that wouldnt have been a big problem, even if no expertise were there because if they would have got in the top corporate houses, the indian media wouldnt have have raised a finger. then these big chaps could have sub-contracted, and then there never would have been any payment problems for sure, but then kalmadi & co were looking for a bigger and better cut something on which the small fish would have been more forth coming than the big corporate houses.

    fingers were raised because some really got jealous seeing kalmadi walking away with a big amount of money and so the scandal hit the media.

    about the reputation, india's reputation in the 90's was much worse. in business, every businessman has a price, and they are all ready to do it for that right price. there would be many out there still to risk it.
     
  11. SPIEZ

    SPIEZ Senior Member Senior Member

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    Very good! now the Indian politicians won't be able to make money in the name of International Games.
     
  12. Adux

    Adux Senior Member Senior Member

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    India is an extremely hard place to do business, it is backward commie socialist paradise in garb of centrist trying to be capitalist notion. Hard Work and Private property and rights is not appreciated.
     
  13. amitkriit

    amitkriit Senior Member Senior Member

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    Its because a person expects and wants special treatment because he/she is lighter skinned than the natives. Works in Africa, doesn't work here. Same reason resulted in failure of Japanese ventures inside India (where they owned the whole business), because they were not ready to adjust, they wanted to create a Mini-Japan around themselves inside India. This is where Americans are smart, US companies are already doing good business in India, because they accept the reality and they keep their feet on ground.
     
  14. SPIEZ

    SPIEZ Senior Member Senior Member

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    ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^

    There are still plans of building a mini-Japan, it's in Chennai and they are asking for a whole city. The idea was presented to the current CM of TN.
     
  15. agentperry

    agentperry Senior Member Senior Member

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    unlike movies Indian govt is known for backing off at the last moment even if there is a legal obligation for them to execute a project. among international firms it is a known fact that Indian govt cannot be trusted, they will do everything stupid to buy few votes of useless burden population. they use cheap tactics like holding project etc for extracting money from these firms as if its their bloody village and holding pension of an old man will make them earn a pie out of his pension later on.

    there is a reason why Indians are called CHEATS( contrary to Indian movies where we are shown determined and honest)
     

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