When you need to get of India

Vol 4, PW 3 (15 Mar 00) People & Policy
     

Petrowatch does not normally promote consultancies but there are exceptions.

As most foreign companies know, there are many consultancies, whichoffer advice, contacts and 'ENTRY' strategies on the best way to operate in India. If you have a sound project, sound financing, and a sound partner all well and good.

If you don't, youll need to get out fast. But where do you go Answer: Energy Resources & Generation (India) - a low-profile consultancy of some 60 employees with it headquarters in the US and its India office in Faridabad, a suburb of New Delhi.

Unlike traditional consultancies, ERG's speciality is devising 'EXIT' strategies - for companies that have been seriously burned and want to cut losses and get out. For ERG, India is 'a war zone', consultants working here must be 'battle ready' and prepared 'for a tour of duty'.

This is not South Korea or Vietnam, but almost! The company has no illusions about India and does not offer a rose-tinted view. "Make sure you do your own due diligence", advises a company rep, "Don't give it out to somebody else." He adds: "Do the project alone, forget the joint venture partner.

If your agreement goes bad, he'll sue you for a billion dollars and you'll have to show it on your balance sheet - he won't. All he wants is your money." For ERG, project financing is a racket, a nexus operated at three levels.

On the top come the bureaucrats, politicians and industrialists, all cosy with each other, all conspiring to get a slice of the pie. On the second level are the lawyers, the chartered accountants and financial institutions that ensure the money comes here.

On the third level is the criminal underworld, which moves in when you want out. Cogentrix and Marathon Oil are two of ERG's clients.

Need we say more