Recurring Decimals…..

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Missed opportunity (updated)

with 12 comments

Slightly dated news, but with a general relvance to India.

HO CHI MINH CITY, Vietnam – Intel’s billion-dollar Vietnam bet along the Hanoi Highway – its biggest semiconductor manufacturing plant ever – is rising up from the flatlands of former rice fields.

The Santa Clara chip giant jolted the tech world two years ago when it announced it would build a massive assembly factory in this Southeast Asian country known more for making shoes and growing crops than assembling key PC components. Intel picked Vietnam, a nation of 85 million that lacks a single world-class university, over India, whose army of engineers has reordered the global software industry. (link)

(emphasis mine)

As mentioned, Intel’s first choice was India. My wife was part of the team consulting for Intel that was evaluting the environmental sustainability of an industrial land area near Chennai for the project. Given the proposed scale of the operation, it would have been a huge economic boon for the area. Sadly, the experience left her, not to mention the rest of the team and Intel expasperated, forcing a move to a much more willing Vietnam. A collusion of the usual factors – lack of any serious planning and coordination, general governmental apathy and of course, red-tapism – led to a quick demise of the proposal.


Update: Do check the comments section for more detailed information from the person in the know. A number of concerns raised by various people are addressed there.


Written by BongoP'o'ndit

May 14, 2008 at 8:49 pm

Posted in India, Rants

12 Responses

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  1. What about all the pollution a semiconductor plant brings in? Given our lax norms and even more lax enforcement, I don’t think we are ready.


    May 14, 2008 at 9:04 pm

  2. Lekhni,

    What exactly are we ready for then? Environment no doubt is important but to decline such a major investment because ”we are not ready” is hardly appropriate.

    And note, India didn’t decline the investment because it was polluting; much worse happens in India. It lost the investment because of red-tape and sheer incompetence. There is a huge difference between the two!


    May 14, 2008 at 9:16 pm

  3. @Confused: Red-tape can be related to environmental clearances. So..

    We need to know the kind of red tape it was. No permit for the enormous amounts of water/power that such a plant would need? Clearance for allowing female employees work at night? Building height not to exceed a certain limit? Can’t dig below a certain depth?

    More details please..


    May 14, 2008 at 11:09 pm

  4. @Lekhni: shouldn’t the solution be that we have proper laws and enforcement in addition to a working bureaucracy ?
    Besides, the part of the planning my wife was doing included environmental impact assessments and how to treat the wastes and such.

    @Vivek: Some red-tapism was related to certain environmental issues. The issue is not if there should be a lack of or relaxed regulations: even in US, there are always strict state and federal environmental guidelines that need to be adhered to. However, projects usually don’t get mired in administrative delays.

    Btw, this is not an indictment on all bureaucrats 😉


    May 15, 2008 at 12:17 am

  5. But then, weren’t we spared another political imbroglio involving the land-acquisition, the FDI and the environment ??


    May 15, 2008 at 12:19 am

  6. @Lekhni: At Vietnam, we have built a state of the art wastewater treatment plant that meets the strict US EPA environmental guidelines, which is far more stringent than Vietnam’s regulations. The same would have been done at Chennai. Wastewater discharge could be easily monitored by Indian authorities and, if necessary, paid for by the company. We would have been ready for any monitoring stipulation that the authorities would have wanted.

    @Confused: Yes, India was not ready. This was in late 2005. The said industrial park was zoned for plants similar to what we were proposing and it was broadcast worldwide that investment is being sought at this venue. India looked good: excellent location, cheap labor, good market accessibility, future business development potential, etc. But planning was incomplete for this site – zoning was done, but there was a very weak (almost non-existent) plan for power, water, and infrastructure development! There was not even a proper geotechnical report for us to look at!

    @ Vivek: It was lack of interest in India – not one agency or authority wanted to be the first one to say yes to this big project. We were left wondering why everyone was so afraid and about what?! We could have met, laid all our cards on the table and developed the project as a team. No one seemed confident or courageous enough to take a decision and move forward. No one looked at the big picture – big industrial town, lots of jobs, more $ into the economy, etc. For a project of this size, there will always be hurdles – but they all get resolved over time by mutual discussions. It takes commitment from both parties to sit together and work out solutions – it did not seem possible here. Personally, I was heart broken when we left Chennai for Laos.

    FYI, I was involved in the impact assessment in Vietnam, I was able to review first hand how the authorities welcomed the investment and helped clear the red tape. They did not give the company any special concessions, environmental or otherwise. They have a small team of professionals as clearing house dedicated make processes easier. They prioritized the infrastructure projects to enable this project. The commitment and political will came top down, was enforced and people held accountable. Honestly, I was impressed.

    @whatsinaname: I hope you are not serious! It was indeed a missed opportunity.

    Bongo's wife

    May 15, 2008 at 1:24 am

  7. Hi S,

    That was rhetorical. 🙂 I meant to say that adopting an attitude that India is not ”ready” will hardly help. As you pointed out, policy makers have to ensure that such opportunities don’t go waste…

    Thanks for the detailed reply.


    You wanted details. Now you have them!


    May 15, 2008 at 1:57 am

  8. @Bongo: Oye.. I only asked for details to cut the red tape between Lekhni and Confused’s comments 🙂 I thought it would be difficult to take a position without knowing more , and these two were jumping the gun, in a way.

    Don’t worry, I wasn’t taking it personally. I just got a clearance I needed after a 4 month delay – from my own organization!

    BTW.. having read the details.. I can totally understand the feeling. Have faced it often.


    May 15, 2008 at 2:09 am

  9. @ confused and Vivek: No worries mate. India may actually have little ways to go to be really “shining” as we love to see ourselves. We win some we lose some – I still like to hope that it will get better and not worse in the future.

    Bongo's wife

    May 15, 2008 at 2:21 am

  10. @Bongo’s wife: Amen to that.

    [Completely Off-topic, and T-in-C]

    Indian women should throw away the hizab of defining themselves by their husband’s identity 😀


    May 15, 2008 at 3:30 am

  11. @ Vivek: @ off topic – Who are we kidding here? I do not mind hiding behind my husband’s name once in a while. I fight the world on my own daily, and defining myself by him is a comforting luxury that I cherish. 😀

    Bongo's wife

    May 15, 2008 at 9:58 am

  12. @Bongo’s wife: Thanks, I agree that if was simple lack of infrastructure, that was an easily resolvable issue and administrative delay is inexcusable.

    But the admin. delay, you say (in your response to Vivek) was because no agency was willing to okay..and you wonder why. Well, the truth is, US corporates do not have a track record of adhering to environmental norms in India after starting operations. Whether it was Union Carbide releasing MIC in Bhopal decades back, or Coca Cola depleting groundwater/ degrading its quality in Kerala, or Enron (Dabhol) causing water pollution in Maharashtra, it’s surprising how many US corporates turn a blind eye to their Indian (and Chinese) plants not following pollution norms. It’s true enforcement in India is lax. But companies are also all about maximization of share prices. So they have a lot of incentive to “persuade” officials not to enforce norms, as they can save a lot of money..

    Intel might be different. But can you see why those officials were nervous.

    @Confused and @BongoP’o’ndit: I am all for stricter regulations and stricter enforcement of laws in India. Not just Pollution but in everything ranging from traffic police “challan”ing offenders. It’s a whole new mindset change that is required.

    But the ground reality remains, as long as enforcement of pollution norms remains lax, I’d rather have polluting industries in other countries. I am happy to have China and others as manufacturing hubs and India as a services hub. In any case, in terms of profitability and scaleability, growing the services sector is the way to go, not manufacturing.


    May 15, 2008 at 11:36 am

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