Gurgaon’s long-term prospects grim: Harvard Business Review

GURGAON: The sheen is off our Millennium City, if an article in the reputable 'Harvard Business Review' is anything to go by. A piece in the magazine's July-August 2013 issue compares Gurgaon with a Vietnamese (satellite) city with a similar background and finds the former lacking in many respects. 

In his paper on "Building Sustainable Cities", John D Macomber, a faculty member of Harvard Business School, highlights how development of Gurgaon has largely been promoted by speculative real estate developers, with little attention to master planning and little investment on roads, water and electricity. "As a result, its landscape today is a mishmash of spectacular office buildings, large vacant areas populated by stray cows and goats, decrepit low-rise buildings, and slums," writes Macomber. 

The author also mentions how major users draw water from the ground through individual wells and traffic jams and smog are commonplace — "Power is so sketchy that virtually every commercial building regularly relies on costly and polluting diesel generators; and the water table is receding by up to one metre a year. The developers got their capital back quickly, but the long-term prospects are grim: Traffic, power, water and pollution problems seem intractable. It's very difficult to install roads and water infrastructure. This is business as usual at the city scale, with no particular financial engineering plan and no use of technology to extend resources," Macomber observes. 

If that wasn't enough, Macomber draws a parallel between the failing infrastructure of Gurgaon and the sustainable model developed by the Vietnamese city of Phu My Hung, an urban industrial hub near Ho Chi Minh City, the capital of Vietnam. Both the cities have roughly the same area (about 20,000 acres) and population (1.5 million). However, in contrast with 'speculative real estate development', Macomber writes, in Phu My Hung industrialists took a long-term "build and hold" approach and had an infrastructure-first master plan that included a privately financed and operated electrical generation plant, which powers much of Ho Chi Minh City and all the activity within Phu My Hung. 

"The district depends on central water extraction, purification, distribution, and wastewater treatment and a central highway that was designed to allow mass transit to grow with the district. The developers had a nation-building agenda and a long-term orientation towards creating value... Today, the city is clean and green and orderly; its real estate values are among the highest in emerging Asia; and its parks and waterways are weekend destinations for people from surrounding towns," writes Macomber. 

Finally, Macomber worries about the future. "It is difficult to imagine the next urban billion living in 500 or more new cities built on the Gurgaon model," he writes, and votes for Phu My Hung, where thoughtful, long-term-oriented, private-sector actors help the world create efficient water, power, and transit solutions... the necessary demand, capital, and technologies exist. What is now required is farsighted investors and businesses to organize the players..." 


source:- http://timesofindia.indiatimes.com/city/gurgaon/Gurgaons-long-term-prospects-grim-Harvard-Business-Review/articleshow/21968286.cms

Easier exit window for foreign investors in infrastructure projects

NEW DELHI: The government is planning to a give easier exit window to foreign investors in construction, housing and township projects, hoping to spur greater equity inflow into the debt burdened sector and help faster completion of delayed projects.


The measures are continuation of the government's ongoing drive to make FDIpolicy more attractive. Under the current rules, 100% FDI is allowed in the construction, housing and township but subject to a threeyear lock-in, a condition that was imposed to ensure speculative money does not flow into real estate but has also had the unintended consequence of stifling genuine investments. 

The sector attracted $1.3 billion FDI in 2012-13, down 58% from $3.1 billion in 2011-12. The department of Industrial policy and promotion (DIPP) is now mulling allowing foreign investor to exit after completion of the project or three years, whichever is earlier, as proposed by the ministry of housing and urban poverty alleviation (MHUPA). 

Most housing projects are running one to two years late because of slowdown and shortage of funds because of elevated debt levels. 

"Though DIPP is yet to finalise on the relaxation in FDI conditions, but the exit window to developers after project completion seems suitable. However, greater clarity would be needed on the definition of completion," said a government official in privy of the matter. 

"Providing an exit door to the foreign investor on project completion before 3 years will be a good sign. This would make entry and exit simpler like it is in other countries. But I am doubtful if it will lead to an immediate dollar inflow", said Anshuman 

Magazine, CMD, CBRE, an international real estate consultancy firm. However, industry feels there should not be any exit clause. "Most townships or housing projects take more than 3 years to construct anyways. What difference will the exit on completion make? A foreign investor should be allowed to exit whenever it wants, as per the agreement between him and the Indian player", said RR Singh, director general, National real estate development council. 

The other changes under consideration include reducing the minimum capitalization of the eligible construction project in which FDI can come in to $ 5 million against $ 10 million presently for wholly owned subsidiaries and from $5 million to $2.5 million for joint ventures with Indian partners. 

MHUPA has also asked for a reduction in the minimum built up area from 50,000 sq mt to 20,000 sq mt. However in case of serviced housing plots, minimum land area may remain the same at 10 hectares. 

DIPP is looking into all these but is opposed some of the more liberal proposals like the urban development ministry's suggestion foreign investors be allowed to purchase land and other immovable assets for construction purpose. "This is nearly the same as saying allowing FDI in real estate business, which is not permitted", said the official. 

Urban development ministry has also recommended that foreign investment up to 49% be free from any entry condition to attract foreign capital providers that do not have long-term interest in construction assets.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/easier-exit-window-for-foreign-investors-in-infrastructure-projects/articleshow/22058270.cms

A slowing realty market spells opportunities

It may be time to go bargain hunting for end-users and investors as developers offer attractive rates, but focus on quality and exercise due diligence before buying

Sanjay Kumar Singh 

Aslowdown in the real estate sector can spell opportunity for the prepared. Delhi-based publishers Umraopati Ray, 30, and his wife Priyanka Saxena, also 30, own an apartment at Paschim Vihar. As the slowdown in the National Capital Region (NCR) intensified, the young couple went hunting for good deals. Recently, their efforts were rewarded when they managed to buy a flat at Vasant Vihar at a price 15% lower than the peak rate witnessed in the area in the past.

Pan-India slowdown
Real estate markets across the country are currently witnessing a slowdown. In Mumbai, it has lasted for about a year now. Down south, it began about six months ago. The Delhi/NCR market was the last to be impacted by the slowdown, but here, too, the signs have been apparent over the past three months.

    While developers have not slashed their prices overtly, the slowdown is visible in the drastic fall in the number of transactions. According to a Gurgaon-based broker, this figure has dwindled to 30% of last year's level. Speculators who had booked a large number of properties in the hope of exiting profitably in a rising market are now jettisoning surplus holdings, often at a discount. In the primary market (where you buy from a developer), the slowdown is evident in the large number of subvention schemes and discounts (ranging from 5-20%) being offered by cash-strapped developers. Another signal is the widening gap between prices in the primary and the secondary market (where you purchase from another buyer).

    The downturn is most pronounced in markets where speculation over the past couple of years had driven prices high, though infrastructure is not yet in place. The Dwarka Expressway area in the NCR, where the highway providing connectivity to the region has not seen much progress over the last one year, is an example.

    Prices are also correcting more steeply in projects where barely 20-30% payment has been made and possession is a couple of years away. Says Rajan Ahuja, executive director, Realty & Verticals, a Gurgaon-based real estate consultancy: "In such projects, buyers have begun to feel the pinch. If these get delayed amid the slowdown, there could be a lot of exits and prices could see a further correction."

What's causing the slowdown?
The slowdown in the real estate market is only mirroring the sluggishness within the economy at large. According to Anshul Jain, chief executive officer, DTZ India, "The weak economy has affected the demand for residential units. Inflationary pressures and lack of increments have left buyers with no surpluses."

    India's real estate sector, much like other sectors, is subject to cyclical downturns. Says Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield: "A lot of projects have been launched, so inventory levels are running high. Prices have also gone up a lot. Meanwhile, sentiment is not so bullish." A negaive feedback loop has set in. With quick gains becoming hard to come by, new investors are staying away from the market.

    Real estate consultants lay the blame for the slowdown on speculative excesses. Says Ahuja: "In markets like Dwarka Expressway, speculative buying and selling had pushed prices to unsustainably high levels. A period of price correction was bound to follow."

Opportunity for buyers
In the popular imagination, the word 'slowdown' carries negative connotations. However, it spells opportunity for buyers who had found prices moving beyond their grasp when the markets were rising. Those who had deferred the decision to buy may now go in for the kill, as Rai and Saxena have done. Vishal Dhawan, chief financial planner at Mumbai-based financial planning firm, Plan Ahead Wealth Advisors, says you are likely to get good deals in the secondary market, since the individuals who had invested in multiple apartments and are in desperate need of cash will readily sell at a discount.

    Jain of DTZ believes that the current slowdown will continue until a new government is in place after the general election in May 2014. Hence, buyers have time on their side. Sanjay Sharma, managing director, Qubrex, a Gurgaonbased real estate consultancy, advises patience. "This will gradually turn into a buyer's market. Even if it takes three to four months to strike a deal, be patient," he says.

    Schemes galore: To push sales, developers are coming up with all kinds of offers. Subvention schemes like 80:20 have become the market benchmark. In Noida Extension, buyback schemes have become popular-buy at 100 today and re-sell to the developer at 118-124 a year later.

    While at first glance these schemes appear attractive, buyers must watch out for hidden costs. Says Ahuja: "Cut through the intricacies of the scheme and calculate the final cost to you." A popular trick is to price the apartment being sold via a subvention scheme higher than that via a construction-linked payment plan.

    Compare the price that you are being charged with the rates prevailing in that area. Currently avoid expensive projects (with rich specifications), especially in remote locations.

    Exercise due diligence: Stay focused on quality. As in all real estate purchases, give primacy to location. Does the area offer proper infrastructure and connectivity? In areas where the infrastructure is yet to be developed, prices may remain depressed longer.

    The quality of the developer, especially his financial strength and ability to deliver the project on time, should be a prime consideration. The developer should have title of the land on which he is developing the project and also all the necessary approvals.

    Have a long investment horizon: Real estate cycles tend to be longer than those in equity. According to Dhawan, if you invest now with a horizon of 7-15 years, you would be insulated from the slowdown.

    Understand supply dynamics: Dutt of C&W warns that a lot of projects have been launched, but fewer are being delivered. If the slowdown deepens, many may not be delivered at all. Avoid areas facing a supply glut.

Should you hold on?
If you have already invested in a couple of projects, don't let distress sales by a few investors scare you into bailing out. Dutt says that if your investment enjoys sound fundamentals, you should stay put. In a slowdown, investors seek refuge in quality, so such investments could appreciate even in this environment.

    Moreover, the market will stabilise in due course. "If prices in the secondary market correct by 25-30%, end-users will find value in it and return," says Ahuja.

Should you exit?
Those who have over-invested in realty (those who bought a number of apartments in the hope of making a quick buck) should trim their portfolios by selling their excess holdings and retaining only those for which they can afford the payments. You may also sell if you are offered a good valuation, or if better investment opportunities beckon.

Watch out for
Curb your risks: According to financial planners, real estate is a risky investment and should be clubbed with equities and commodities in the high-risk basket. Make sure that cumulatively you are not too heavily exposed to these three asset classes.

    However, there are no rules of thumb regarding exposure to real estate. If you are investing in it for both self-use and investment, you may have a higher exposure than if it is purely for investment. If it's for the latter, do not over-commit. A slowdown in realty often coincides with one in the economy. So even as your realty investment becomes less valuable, you are also at a high risk of losing your job. Dhawan suggests that if both the partners work, the EMI on home loan should not exceed 40% of the net salary of one partner, so that you don't experience difficulty even if one partner loses his job.

    Liquidity risk: People claim that if they can't pay EMIs, they will sell and exit, but they forget how illiquid the realty market becomes during a slowdown. "If you are going to depend on this strategy, at least build an illiquidity discount into your calculations," says Dhawan.

    While a slowdown means the end of quick profits, it could also throw up opportunities. So keep scouting till you come by a good deal. 







source:- http://epaper.timesofindia.com/Repository/ml.asp?Ref=VE9JQkcvMjAxMy8wNy8wMSNBcjAxNjAw&Mode=HTML&Locale=english-skin-custom

Realtors ready to explore untapped market

KOLKATA: Though the demand for studio apartments in the city cannot be compared with that in Mumbai or Delhi, there has been a steady upswing over the last few years. The changing trend has caught the attention of realtors and they are going all out to tap the potential.

Siddha Group, developer of studio apartment complex 'Xanadu', has finished the last phase of construction. "We have created 340 such flats in Xanadu. We have already sold 220 flats priced between Rs 25-40 lakh," said Sanjay Jain, managing director of Siddha Group. The group might look at adding studio apartments in forthcoming projects as well.

With an increase in the number of young working professionals in the city with high aspiration levels and a growing demand for second home at affordable price points, many realtors have started converting 1 BHK flats into studio apartments. Some of such properties are also available fully or semi furnished.

"It is a home away from home. While the demand is limited so far, we have seen a good response for our property on Diamond Harbour Road," said Sushil Mohta, managing director of the Merlin Group. His studio apartment project Nirvana has 104 units, priced between Rs 20 and Rs 30 lakh each.

Pioneer Property Management Ltd, one of the leading real estate and property consultant in the city, will start marketing 156 studio apartment units near Vedic Village soon. "Such apartments are more useful for single persons or a newly married couple. These are not very big and affordable as well. It is a good format, especially in areas where there is a lot of movement of young professionals," Jitendra Khaitan, CMD of the company, said. Pioneer's furnished studio apartments, over an area of 610 sq ft, will be priced at Rs 18 lakh.

According to NK Realtors director Pawan Agarwal, the studio apartment market in Kolkata has a potential to grow in next five to six years. "In the short term, there may not be a spurt in demand as Kolkata does not have much of migratory population among young professionals. But in the long run, studio apartments are likely to catch up," he said.

But what happens to users when they try to sell it off? Are there enough buyers for such properties? "Once I decided to sell off one of the studio apartments I own and posted advertisements. I received a very good response," said Harsh Bajaj, owner of a studio apartment.

"Kolkata is gradually waking up to studio apartments. Everyone who has bought a studio apartment had a particular need. Five-six years down the line the city will have more young professionals looking for a decent and luxurious unit to move into," Sambit Kundu, a buyer of a studio apartment said.

source:- http://timesofindia.indiatimes.com/city/kolkata/Realtors-ready-to-explore-untapped-market/articleshow/22084272.cms

Builder told to pay Rs 3L for delaying handing over flat

CHENNAI: A real estate firm that delayed giving possession of an apartment to its buyer has been directed by the State Consumer Dispute Redressal Commission to pay 3 lakh as compensation. 


In December 2012, Vijaya Padmanaban , an employee of Chaitanya Builders and Leasing Pvt Ltd, made an advance payment and booked an apartment in the project being built by her employer . She received the confirmation in the same month, after which she carried out interior furnishing work in the flat. Two years later, she resigned her job with Chaitanya Builders. The company sent her a note saying the flat was allotted to her "at less than (the actual) cost on an understanding of a long-term productive participation in the growth of the company." 

The company also returned her cheques saying that her "attitude to the company's assignments resulted in a loss of 2 crore in a project." Vijaya filed a complaint with the commission seeking a compensation of 20 lakh for deficiency in service, harassment, mental agony, and 15,000 for loss of funds . 

Chaitanya , in its reply , said the complaint was time-barred and fell outside the purview of the commission . It said Vijaya's negligence resulted in huge losses to the company and claimed she was trying to unlawfully take possession of the flat . Further, Chaitanya filed a civil suit and obtained an injunction order too. 
The commission's bench said: "It is well settled that all subjects relating to housing construction are within the purview of the Consumer Protection Act. As there is continuing cause of action in not handing over possession of the flat in complete shape , it cannot be barred by time ." 

The bench said further evidence regarding the civil suit was not produced and the employment issue was irrelevant to the case. 

The commission said: "The failure on the part of the company to hand over possession ofthe flat to Vijaya in time amounts to deficiency in service." It directed Chaitanya to "hand over possession of the flat to Vijaya and pay an amount of 3 lakh for deficiency in service, harassment, loss and sufferings undergone by her, besides 5,000 as costs." Vijaya has also agreed to pay the revised price quoted by the builder. She has been directed to submit the balance amount over and above the initial payments.

source:- http://timesofindia.indiatimes.com/city/chennai/Builder-told-to-pay-rS-3L-for-delaying-handing-over-flat/articleshow/22084865.cms

Class action suit against iGate, Murthy dismissed

Bangalore: The class action lawsuit filed against iGate and its former CEO, Phaneesh Murthy, by a shareholder of the company on June 14 in a California district court has been dismissed by the shareholder plaintiff. 
    iGate said no payment or consideration of any kind was made by any of the defendants in connection with the dismissal. The lawsuit was filed for iGate’s alleged failure to disclose that its former CEO Phaneesh Murthy was in a relationship with a subordinate employee. It was filed on behalf of those who acquired shares of iGate between March 14, 2012, and May 21, 2013, and sought to recover damages against the company and some of its officers and directors as a result of what it called “alleged violations of the federal securities laws”. 
    “We are pleased to put this matter behind us,” said Gerhard Watzinger, interim CEO of iGate. TNN

source:- http://epaper.timesofindia.com

New Gurgaon, Greater Noida emerge as real estate hot spots

Experts say investors are investing in residential units in Greater Noida, hoping for significant returns through the next few years.

For investors, New Gurgaon and many parts of Greater Noida are fast emerging as new real estate hot spots. In the past year, New Gurgaon has recorded property price appreciation of 66 per cent. While property prices have risen about 21 per cent in Greater Noida, the area isn't limited to being an end user market; investors were investing in residential units in Greater Noida, hoping for significant returns through the next few years, said experts.

However, real estate analysts make a distinction between the two regions, in terms of investment - while New Gurgaon is referred to as a high investor market, Greater Noida is termed a market for low-ticket investors.

As of March-end, the average residential property price in New Gurgaon stood at Rs 7,068 a sq ft, against Rs 2,528 a sq ft at the end of March 2009, a rise of 180 per cent, according to data by real estate research firm PropEquity. In Noida Extension, part of Greater Noida, prices have risen 49 per cent through the last five years. In the last year, prices have appreciated 16 per cent, compared with Rs 2,818 a sq ft at the end of March 2012.

In Yamuna Expressway, part of Greater Noida, prices rose from Rs 3,500 a sq ft at the end of March 2009 to Rs 3,664 a sq ft at the end of March this year. In the last year, prices rose 21 per cent.

Sumit Jain, chief executive of commonfloor.com, said, "While the rest of the National Capital Region has seen muted growth, the markets of Greater Noida and New Gurgaon have seen significant appreciation. Investors have a limited risk appetite, due to a slow-moving economy, changing regulations and tight liquidity conditions. Both these markets provide low entry points, with a significant upside to investors."

Samir Jasuja, founder and chief executive, PropEquity, said Greater Noida saw a healthy price appreciation due to availability of affordable options, while New Gurgaon had emerged as the next best location because of good infrastructure, attractive pricing and good-quality projects. Besides, the profiles of developers had also aided growth in New Gurgaon. "New Gurgaon is already attracting a lot of investor interest. And, looking at the trends, this active investor interest would only accentuate. The region is fast emerging as Gurgaon's luxury destination and we expect developers would continue to launch good premium projects," he added.

Apart from these two areas, Dwarka Expressway is also attracting investor interest. Other areas that have grown consistently are Golf Course Extension Road, Sohna Road and Noida Expressway, experts say. Dwarka Expressway and Noida Expressway recorded price appreciation of 206 per cent and 158 per cent in the last five years, respectively. As of March-end, prices stood at Rs 7,121 a sq ft in Dwarka Expressway, while in Noida Expressway, they stood at Rs 9,435 a sq ft. In the last year, property prices in both the areas rose 45 per cent.

Last year, absorption of units in New Gurgaon stood at 3,058 in the mid-level (Rs 40 lakh-1 crore) segment, against 1,649 in 2011. So far this year, absorption stands at 854 units. Absorption in the luxury (above Rs 1 crore) segment so far this year stands at 57 units, against 227 in 2012 and 232 in 2011.

In the luxury segment, new launches picked up pace in New Gurgaon. A total of 509 units have been launched so far this year, against 3,610 in 2012 and 810 in 2011. In the mid-level segment, 169 units have been launched so far this year, against 3,886 in 2012 and 4,992 in 2011.

In Noida Extension and Dwarka Expressway, absorption, as well as new launches, was primarily recorded in the affordable segment (up to Rs 40 lakh).

source:- http://www.business-standard.com/article/companies/new-gurgaon-greater-noida-emerge-as-real-estate-hot-spots-113061500825_1.html

MOVES-KKR, Annaly Capital Management, U.S. Bank Wealth Management

Aug 20 (Reuters) - The following financial services industry appointments were announced on Tuesday. To inform us of other job changes, email to moves@thomsonreuters.com.

BNY MELLON

The investment manager appointed Gesa Benda as global collateral services product segment manager for clearing houses, based in Frankfurt.

KKR & CO LP

The investment company appointed Joseph Plumeri as a senior adviser. Plumeri was the chairman and chief executive of the Willis Group. KKR said Plumeri is also joining the board of First Data, a KKR portfolio company.

ANNALY CAPITAL MANAGEMENT INC

The company, which owns, manages, and finances mortgage-backed securities and a portfolio of investment securities, named Glenn Votek its chief financial officer. Votek will also be a member of the company's operating committee. He was previously the company's chief administrative officer.

U.S. BANK WEALTH MANAGEMENT

The wealth manager appointed Christopher Kurimay as wealth management adviser for its Private Client Reserve division. Kurimay was previously with UBS Private Wealth Management.

STORMHARBOUR

The global markets and financial advisory firm appointed Sandeep Gill, Barry Dick, Martin Otway and Nicholas Loh in Singapore to strengthen its presence in Asia Pacific. StormHarbour said it has acquired the team from the OPVS Group. Gill and Dick both join as principal and managing director. Otway and Loh join the firm as directors.

EAST CAPITAL

The asset manager said Karine Hirn, partner and co-founder of the company and chair of its Asia advisory committee, together with senior advisers Dmitriy Vlasov and Adrian Pop has recently relocated to Hong Kong to maintain and deepen the firm's coverage of China and other emerging markets in Asia.

MACQUARIE CAPITAL

The company, which provides advisory and capital raising services, said Wannawut Apinanratanakul has been appointed head of Macquarie Capital Thailand, based in Bangkok. Apinanratanakul was previously with Minor Food Group.

SL-X GROUP

The capital markets electronic trading company appointed Richard Dellabarca as chief financial officer. Dellabarca Was formerly the chief financial officer of Chi-X Global Holdings. The company also named Dr Marc Gerstein its strategy director and Nancy Gardner its general counsel. Gerstein was previously with Instinet Corp. Gardner previously worked at Thomson Reuters' Markets division.

PRAMERICA REAL ESTATE INVESTORS

The real estate investment and management business of Prudential Financial Inc appointed Frank Garcia a managing director and portfolio manager for its core open-ended equity commingled real estate strategy. Garcia is based in PREI's San Francisco office. He was previously with RREEF, Deutsche Bank AG's core real estate strategy.

source:- http://www.reuters.com/article/2013/08/20/financial-moves-idUSL4N0GL1XD20130820

India's Real-Estate Hotspots

Real estate values across the country have steadily appreciated in the last four years. A report released by Jones Lang LaSalle, a real estate firm, looks at eight micro-markets where prices have gone up the most. According to the report, these locations “offer a large bouquet of investable options in real estate with their lower price levels providing the incentives for future capital appreciation and healthy returns”. A rider: The expected percentage gains over a one-year period show the velocity of appreciation has slowed. The increase in value will vary—for instance, a 14.5 percent gain in Whitefield, Bangalore, to as low as 5.8 in the southern suburbs of Chennai

Read more: http://forbesindia.com/article/checkin/indias-realestate-hotspots/35509/1#ixzz2d3LInmD8

Why GE's Myanmar Venture Has not been Easy

Image: Getty Images GE is looking for places like Myanmar, situated in a strategic saddle between India, China and Southeast Asia I n the midday haze outside the Thingaha Hotel in Naypyidaw, the new capital of Myanmar, the national flag droops alongside the Stars and Stripes and General Electric’s corporate logo. Inside the Grand Ballroom the staff scurries with last preparations for a meticulously planned gala dinner. Heading up this coming-out party is Stuart Dean, a blue-eyed, rawboned American and GE’s chief for Southeast Asia. Just in from Malaysia, where he is based, Dean turns to his PR director to check on the guest list. “We’ve got eight deputy ministers and five ministers coming tonight. It’s 140 people,” says the director. “Is the Lady coming?” Dean asks. “Yes.” “Confirmed?” “Yes, and she’s sitting next to you.” “Wow,” he says. ‘The Lady’ is Aung San Suu Kyi, the opposition leader who won the Nobel Peace Prize for decades of non-violent resistance to thuggish dictatorship and recently declared her interest in running for president. She isn’t a fan of free market enterprise, so her attendance tonight is a big deal. Myanmar—known for centuries in the West as Burma—is one of the planet’s final frontiers for capitalism, and it’s in desperate need of lighting and power, railways and ports. It’s easy to see why GE, one of the planet’s icons of capitalism and a leading provider of infrastructure, wants in. Both entities desperately need growth. Myanmar, because most of its 60 million or so people (the last census was in 1983) earn less than $500 a year. GE, because its stock has been flat for the dozen years of CEO Jeff Immelt’s reign. At $150 billion (sales), GE is looking for places like Myanmar, situated in a strategic saddle between India, China and Southeast Asia. But the symbiosis largely ends there. GE’s efforts in Myanmar offer a window into difficulties even the most adept companies face in countries new to the idea of free markets. It’s an awkwardly slow dance, filled with corrupt officials, crony capitalists and a stifling bureaucracy. GE’s dinner diplomacy helps illustrate that. The Aung San Suu Kyi event follows a one-day workshop for the Ministry of Electric Power, which ended, as seems the norm here, inconclusively. The ministry would like more time to study GE’s proposals to replace worn-out industrial gas turbines it built years ago. Perhaps, the bureaucrats counter, the company can offer technical training and support? Dean raises his eyebrows but keeps his smile. The evening’s meal had similar fits and starts. Canned piano music greets Burmese officials wearing black collarless jackets with large cuffs over colourful trouser-length wraps. Dean hovers in GE’s welcoming line and then escorts the poker-faced Lady, in a moss-green silk dress with a fuchsia scarf, to the anteroom, as local entrepreneurs gape, starstruck. Once the entrées are served, Dean climbs onstage. His mangled effort to speak Burmese earns polite laughter. “The most exciting story in Asia in the last 10 years is the emergence of this country on the world stage,” he says. “We want to be a long-term partner of Myanmar.” He then invites Suu Kyi and the five ministers to join him for photos, before the Lady darts into an SUV. Has her head or heart been moved? “Maybe she’s realised that companies are going in anyway and there’s some way to take advantage of that,” Dean later muses. Over postprandial drinks with his team, Dean explains that Suu Kyi asked him if GE could help renovate Yangon General Hospital, a century-old building. Dean replied that GE is supplying equipment to many public hospitals, but Suu Kyi, as befits a politician, pressed him on her pet project. “You got played,” jokes a colleague. Burma, taken independent in 1948 and taken over by a junta in 1962, had long been a pariah. Abortive rebellions were brutally suppressed, dissidents were imprisoned and foreigners discouraged from visiting. US-led sanctions heightened its isolation.

Read more: http://forbesindia.com/article/cross-border/why-ges-myanmar-venture-has-not-been-easy/35715/1#ixzz2d3KeCJWF

Residential Property in Gurgaon