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Mainak Hazra, director of SENES Consultants India, brainstorms with young colleagues at his office on the outskirts of Delhi.
Mainak Hazra, director of SENES Consultants India, brainstorms with young colleagues at his office on the outskirts of Delhi.

Your Business Abroad

Opposing view of private sector in India Add to ...

Sitting in his office overlooking an expressway that connects Delhi with Agra, city of the Taj Mahal, Mainak Hazra looks more youthful than his experience suggests. A decade ago, the expressway was just a semi-rural road and Ontario-based consulting firm SENES Consultants Ltd., which specializes in energy, environmental and nuclear engineering, did not have an office in India.

Both Mr. Hazra, who serves as India director, and SNES have come a long way.

From a two-person operation in 2001 with an office in Delhi, SENES now has roots in four Indian cities and employs 72 people, mostly technical experts. That’s quite a big share of the 200 people – including 50 from a subsidiary – that SENES has worldwide. The Indian operations account for less than 10 per cent of worldwide revenue of $20 million (U.S.) but there is plenty of optimism for growth.

Mr. Hazra, who was a rare MBA with a specialty in environmental issues when he finished business school in 1996, notes that graduates of the stream have become increasingly common in India over the past decade. Mr. Hazra’s team works for SENES’s international operations and its resources are three times cheaper to hire than in Canada.

Business has been slow to materialize on the nuclear power front, but there is traction in waste management, where SENES is playing a catalytic role, helping city governments aided by agencies such as the World Bank and the Japan Bank for International Cooperation (JBIC) prepare blueprints to manage industrial and municipal wastes, and then play a supervisory role in implementing them.

“Waste management gave us an establishment in India,” says Mr. Hazra of the days when his company had a hard time breaking into the business of environmental impact assessment (EIA).

EIA was a promising business model because India has an abundance of power plants, petrochemical factories and other industrial facilities that need the kind of expertise SENES has. The glitch was that clients considered regulatory requirements a token gesture. As a result, budgets for EIA were low. With its bias toward hiring high-quality, high-cost resources, SENES could only benefit when clients became more exacting.

That happened mainly in the oil and gas sector, Mr. Hazra says.

Mr. Hazra says the public sector is easier to deal with than private clients in India because officials honour commitments made for work done, while private clients can sometimes default on payments. He also challenges the conventional belief that government officials have to be bribed, though he admits they need to be given attention and respect. “They have to be pampered but your payments are secure,” he says. “We haven't paid a single penny for government deals. But you need patience.”

In contrast, India’s private firms – often run by tight-fisted families – can play hardball. During the recent economic downturn, clients stopped their projects or threw up their hands after assigning deals, Mr. Hazra says.

Doing reference checks on payment records of clients probably makes sense for small and medium-sized enterprises doing business in India. Or, perhaps, contracts should be drafted with secure clauses to avoid painful litigation or arguments that might drag on.

On the plus side, a good private-sector client can generate references that lead to more business, Mr. Hazra says.

After the early blips, EIA business is suddenly looking up because bankers and agencies such as International Finance Corp., the private sector funding arm of the World Bank, are coming together to seek hard-nosed reports on environmental and social impacts by businesses as part of risk-management for lending. That has given a leg-up to quality players such as SENES.

Mr. Hazra recalls one competitor who used to “copy and paste” reports to serve many clients with less work. “Our (Indian) regulations are strong. It is the enforcement that needs doing,” he says of India’s environmental rules.

Things are also improving because the environment ministry now insists that EIA consultants be accredited with the government, and it has set a June 30 deadline for registration. This should help keep dubious low-cost competitors in check.

Special to the Globe and Mail

Narayanan Madhavan is associate editor of the business news pages of Hindustan Times, a leading Indian daily newspaper. He has previously worked for Reuters, the international news agency, as well as The Economic Times and Business Standard, India’s leading business dailies. Though focused mainly on business and economic journalism with a strong focus on information technology and the Internet, he has also covered or written about issues including politics, diplomacy, cinema, culture, cricket and social issues. He has an honours degree in economics and a master’s degree in political science from the University of Delhi.

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