BackHimalayan ski resort mired in controversy
The Himachal government, which championed the $500 mn proposal once, has moved to scrap it after a new party took over
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Manali: To John Sims, the Himalayas, with some of the finest mountain slopes in the world, seemed like the perfect place to build India’s first Western-style ski resort.
But he got his first clue about the uphill challenge he faced when the local gods—or at least the holy men who claimed to speak for them—came out against his project.
In the seven years since, Sims, a US hotel developer with years of experience working in India, has encountered seemingly endless setbacks.
Some opponents claimed falsely that the 115-acre project would take over the entire valley. Others complained that the developers had underpaid landowners for their property. The state of Himachal Pradesh, which had once championed the $500 million proposal, moved to scrap it after a different political party took over. Now, a court has allowed it to go forward but has given the developers just six months to secure environmental permits from a government that has repeatedly stalled the project.
“My fundamental complaint is only this: Why did you invite us?" Sims said. “Why did you take our deposit? Why did you encourage us to spend money and then make a 180-degree turn?"
It is not easy for any company to do business in India, with its mercurial and ponderous decision-making, creaky court system and woeful infrastructure. Witness the immense blackouts of late July, in which the electric grids serving half of the country’s population collapsed under the strain of the hot summer and too few power plants. The World Bank ranks India 166th out of 183 economies in the ease of starting a business. But the story of the Himalayan Ski Village shows the particular difficulties faced by foreign companies.
Indians have a deep-seated distrust of overseas businesses, rooted in more than two centuries of exploitation by the British. For many years after gaining independence in 1947, India restricted trade and foreign investment, nationalized industries like banking and gave licenses to favoured domestic conglomerates. In the 1970s, socialist leaders pushed companies like Coca-Cola and IBM Corp. out of the country.
After the government began loosening restrictions two decades ago, foreign firms piled into India, with many achieving great success. The Japanese company Suzuki Motor Corp., for instance, controls nearly half of the domestic car market.
But India remains an unpredictable, even hostile, place for many foreign companies.
“For foreign investors, a stable and predictable policy environment, along with dependable legal and political institutions, are key considerations in addition to market size and growth potential," said Eswar S. Prasad, an economist at Cornell University and the Brookings Institution who has advised the Indian government. “Policy reversals and domestic power plays that turn foreign-financed projects into political footballs are likely to further dampen confidence among foreign investors."
India's economy is slowing sharply and becoming even more reliant on foreign capital.
Sims, 60, said any help would be welcome.
He first came to India in 1975. He grew up in the suburbs of Detroit and cut his teeth developing resorts in Key West, Florida. Later, he worked as a consultant to the Oberoi Group, an Indian hotel chain, among others.
About a decade ago, with the backing of investors like Alfred Ford, a great-grandson of Henry Ford, Sims set his sights on building a ski resort like Vail or Davos. The handful of existing places to hit the slopes in India were hard to reach and had few amenities, so there was little competition.
Manali has long been a tourist destination for Indians, but most of the foreigners it draws are backpackers. There are no five-star hotels.
The Ski Village would create 4,000 jobs, Sims said, and bring hotels like the luxurious Six Senses Resorts and Spas to the valley. Many local residents, especially those involved in skiing, river rafting and other sports, supported the project. But other residents were apprehensive.
Sims said he was no longer hopeful and felt that the odds were stacked against outsiders.
“People who do love India or who could easily love India would be very happy to contribute their talents and money," he said. But “it's the robber baron era—only those strong Indian businessmen who know how to play the game can succeed." ©2012/THE NEW YORK TIMES
Neha Thirani in Mumbai contributed to this story.
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