Title: India’s growth a boon for Quebec engineers (Part II of a series)

Sub-title: Sub-continent’s booming economy is straining key infrastructure facilities

Delhi – A significant challenge facing business travelers to India is how easy they can get drawn into a bubble. For brief periods, this rising Asian power can seem like any other modern Western nation. The five-star hotels, big brands and educated professionals are roughly similar to what you would run into any major financial center.

 Then suddenly the power will go off, and you’ll be reminded where you are. It can happen anywhere, from India’s capital Delhi, to its business center Mumbai, or even in its high-tech hub Bangalore. In rural centers the problems are much worse. The bottom line is that India’s infrastructure demands, including roads, power generation and transportation facilities have not kept pace with its burgeoning economic goals. The good news is that two Quebec firms are playing a key role in helping to correct the situation.

 “The power sector is one of India’s top priorities,” says Klaus Triendl, president of SNC-Lavalin International. “Their economy is growing extremely rapidly and their power needs are starting create major challenges.” Tiendl should know. He isn’t one of those high-falutin executives who just pontificates about India’s emergence. During his long career at SNC-Lavalin, Triendl actually lived in India on three occasions.

 The experience gave him the chance to witness first-hand the initial phases of the explosive growth, that is expected to propel India from being a chronic underperformer, into one of the planet’s biggest economies.  The stakes are enormous. Canadian exports to India shot up by an impressive 41 per cent during the past two years, to more than $1 billion. And the demands of India’s growing middle class population for the accoutrements of a modern lifestyle, (such as reliable electricity) could help spur that growth even faster.

 One key statistic eloquently illustrates India’s shortfall: according to Triendl, India, with 1.1 billion people, has only slightly more electricity production capacity than Canada, although India has a 35 times larger population. SNC-Lavalin’s activities there date back to the mid 1950s. Since then, it has been involved in the design, construction and commissioning of electric power generation projects throughout the sub-continent.

 The Indian government, keen to diversify away from the nation’s large reliance on coal power, has been taking small steps to help spur various types of electricity production, transmission, and distribution. A key initiative was the country’s Electricity Act of 2003, which gave producers the right to sell directly to consumers. That said, India remains tempted by a variety of electricity generation possibilities including natural gas, oil and even additional nuclear power plants.

 Quebec-based firms have been particularly well-placed to use their hydro power expertise. “India’s rivers have tremendous potential to contribute to its electricity needs,” said Triendl. “And Canadian engineering firms have the knowledge and background to help them meet their growing demands.”

 However according to another Quebec expert familiar with power demand on the sub-continent, getting your foot in the door is not easy. “We set up our subsidiary in Delhi several years ago and at first business was fairly slow,” said Claudio Vissa, vice-president of RSW International, a Quebec-based consulting engineering firm. “But it’s picked up speed quite a bit since then.”

 RSW has a slew of project successes on its books, including efforts in Canada, Guatemala and Algeria. When we talked, Vissa had just come off a trip to Pakistan, where he’d tried to stir up some business. Of all of these locations, India, where RSW is expecting to more than double its staff to more than 100 during the next 12 months, has by far the most potential.

 RSW’s Delhi office, was set up as a partnership with an India firm Bhilwara Group, with the hope that the diversification would speed its market penetration and help negotiate India’s growing pains. Unlike many Canadians who do business there, Vissa adapted quickly.

 “You simply cannot go into a new country and tell your partners how they should do business, no matter how good you are,” said Vissa. “You can give suggestions and talk about your experiences elsewhere, but in the end they have to make their own decisions locally.”

 Despite Vissa’s low key attitude, RSW has had significant successes in the sub-continent. The company is currently contributing its expertise to more than a dozen small electrical production projects. Participation can vary, from merely contributing design expertise and technical assistance all the way to providing detailed engineering and oversight work.

 According one employee from RSW’s subsidiary, who does consultation work at the Malana Hydroelectric Project in India’s Himachal Pradesh Region, the company’s prospects are excellent. “When this project was in the design phase, the initial engineers foresaw a much longer delivery time and a higher budget,” said V.D. Bhatia, director of operations. “But the Canadian engineers (from RSW) who came in to look at the plans had experience with this type of terrain and were able to recommend significant design improvements.”

 But Quebec engineering firms’ hopes for success in India aren’t resting solely on power plants. In late March, SNC-Lavalin announced the acquisition of RJ Associates (Engineers), a Mumbai firm with close to 200 professionals on staff. According to a Montrealer who was recently transferred on-site for a two year mandate, the potential is endless. “This facility can handle work in the chemicals, petroleum, mining and metallurgy industries,” said Michael Casey, the operations director on a recent tour. “And believe me, at the rate India is growing it can use all of those skills.”

 (This article is the second of a three-part series on how Canadian companies are profiting from outsourcing, investing and trade opportunities created by China's unprecedented growth).

 

peter@peterdiekmeyer.com

 

 

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