The controversy over Enron Corp.'s $2.5 billion power project in India has finally ended. Five years after plunging into India, the Houston-based company has started building its liquefied-natural-gas power plant. Enron had to reverse a cancellation of its contract, secure approvals from three successive governments, and win 24 lawsuits.
Rebecca P. Mark, 42, is chairman and CEO of Enron International, India's largest and most visible international investor. Mark visited India in February to announce that she was spearheading an additional $10 billion of investment in the power sector. She spoke with BUSINESS WEEK special correspondent Manjeet Kripalani in New Delhi.
Q: How did you get the deal cleared?
A: I think what worked was that we never stopped talking. Our contract allowed us to arbitrate through legal international means, so we did. Everyone realized a solution was necessary. Once the project got started, there was a layer of people [in government] who supported it.
Q: What do you think you did right or wrong in India?
A: I think most people thought [our project] was too grandiose. They said no, you can't do that for India. Another thing people thought we did wrong was not taking a local partner. But all the local partners with multinationals in power projects in India have gone nowhere. People also thought we didn't do it "the Indian way," whatever that means. We were extremely concerned with time, because time is money for us. People thought we were pushy and aggressive. But think of the massive bureaucracy we had to move. How do you move a bureaucracy that has done things one way its entire collective life? You have to be pushy and aggressive.
Q: Do you think you priced the deal too high initially?
A: In India, you're supposed to have 20% import duty on equipment. But when it comes right down to it, very common in a project is that it doesn't end up being 20% but whatever the customs inspector wants it to be on the day you get there. So you have to price that risk in.
Q: How has the role of foreign investors in India changed since Enron's troubles first began?
A: We hope our troubles have smoothed the way for others. That Enron was able to win 24 lawsuits in India should give comfort to other investors coming in.
Q: How is the investment climate in India now? How does it compare to China?
A: When Enron first came into India five years ago, everyone was looking China-ward, whereas Enron was earmarking major investments for India. This year there was a total change. Most people who had gone into China were redirecting their focus to India.