A Vain Dollar Safari?

IF the effectiveness of a delegation can be judged by the seniority of its participants, then this was surely one of the most serious teams ever sent out of India to woo US investors. Aboard the heavyweight bandwagon led by cabinet secretary T.S.R. Subramanian were: Shankar Acharya, chief economic advisor, finance ministry; N.P. Bagchee, secretary, coal; Yogendra Narain, secretary, surface transport; Pradip Baijal, additional secretary, power; Avinash Chandra, director general of hydrocarbons, ministry of petroleum and natural gas; and Dhirendra Singh, joint secretary, cabinet secretariat.

And even more. Accompanying the officials was a high-powered private sector team representing the Assocham, the CII and FICCI, as well as several Indian firms. It included CEOS Anil Ambani of Reliance Industries, Krishna Kumar Modi of Modi Enterprises and representatives of Ashok Leyland, Asea Brown Boveri, and Larsen & Toubro.

The chief purpose of the visit: to seek $15 billion worth of investments in 10 infrastructure sectors-telecommunications, roads, ports, mining and civil aviation--with special emphasis on energy. And towards this end, the delegation was looking to interest US investors in these sectors and to inform them of the changed laws and regulations that make getting a project approved in India that much faster and easier.

Over 100 financial institutions met the delegation in New York, at a conference organised by Robert Fleming Co. In Washington, the team participated in the India Infrastructure Forum on Energy and Transportation organised by the US-India Business Council and the CII. In Los Angeles and San Francisco, the focus was a meeting with Indians from the computer software industry.

It "had become imperative" to involve the private sector and Seek foreign investment, as the funding requirements of infrastructure projects had become so large, explained Subramanian at the Infrastructure Forum. Several projects in the roads, ports and highway sectors were now being implemented by private entrepreneurs, he added. (

See box ) Shankar Acharya gave an overview of the Indian economy and the government's macro-economic policies. Presentations on surface transport, coal, power, petroleum and natural gas followed.

THE business delegation then took the stage. CEOS recounted their experiences after the 1991 economic reforms. They spoke of the "radical change in the mindset of the administration" and a "meeting of minds between industry and government". A visiting CEO pointed out that the '97-98 Indian Budget had taken into account several suggestions made by industry.

Yet, the well-orchestrated chorus of approval didn't drown out the voices of dissent. Some of which came in the form of a couple of US investors who spoke strictly off the record. "India is traditionally a place you wouldn't go near," said a senior vicepresident of a well-known US engineering and construction firm. The main problem, he added, was "the inability of the bureaucracy to take decisions and the responsibility for their decisions". The CEO of another US firm in India was blunt about what he called the "lack of a clearcut national energy policy". According to him, the government needed to come up with viable alternatives to counter guarantees. And, the clearance process was "too complex and non-transparent". Worse, "despite the government's assurances, most power projects in India have not yet reached financial closure and are mired in the bureaucratic clearance process after years of negotiations". The problem, according to Keith Thomson, president, Fluor Daniel, India Inc., and chairman of the American Business Council, did not "stem from democracy but from unnecessary delays where everything has to be examined several times". As Robert C. Hart of Coastal Power Company said at a panel discussion on Integrated Energy Projects-New Benchmarks: "China makes decisions quickly and is decisive. In India, we have yet to see a project breaking ground."

A stronger note of discord was the fact-sheet written by the US embassy in Delhi, on what it called a "Scenesetter for Indian Infrastructure Delegation's Visit to US". The Ii-page background note-which was included in the press kits by the US-India Business Council, was critical of the investment environment and itemised the 'major impediments' in each sector. The introductory paragraph said: "(Not) all of the required business-friendly policies are in place, particuiarly with respect to expeditious bureaucratic approval processes." (

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To be fair, not all US companies with investments in India painted a dreary picture. According to David H. Swift, chief development officer of Black Sr Veatch, an engineering and construction firm that specialises in power, infrastructure and buildings--and also the contractor for Cogentrix, one of the fast-track power projects that has been endlessly delayed--India is "a promising market for the power sector" and would far outstrip other markets in the next decade. Mohan Tahiliani, partner and vice-president, Black & Veatch, agrees: "Though the Power Purchase Agreement is still not signed, it looks positive. Cogentrix is looking for financial closing in eight months."

Interestingly, Enron has now become quite a cheerleader for the Indian government. Sanjay Bhatnagar, principal of Enron International-previously president and managing director of the Dabhol Power Company--has spoken, most optimistically, at half-a-dozen Indian investment conferences in the US, in about four months.

But do these 'jamborees' achieve anything? "They come, they meet, they talk, but what is the end result? I'm sure they're all trying to get away from the Delhi heat," an Indian staffer at the World Bank, who has worked with previous visiting delegations, told

Outlook. When the dust settles, the bottomline remains: when will all the talk finally translate into some positive and immediate action?