Should you be here?

“You definitely get a sense of things happening over there.” So says Jimmi Bradbury, international director at Cyril Sweett, who has just returned from a week-long trip to India and whose firm is on the brink of setting up an operation in the country.

Bradbury was speaking just before the bomb attacks on the country’s capital New Dehli last weekend, which might dent economic confidence surrounding its future growth in the short term, but in the long term analysts are talking about India in the same breath as China in terms of its rise as a global economic powerhouse. One recent report by US brokerage firm CLSA lumps the two giants together into a single economy, ‘Chindia’, claiming that by 2020 the combined entity will consume half the planet’s natural resources and serve as both factory and back office to the world.

Such predictions underpin why QS and PM firms such as Cyril Sweett are looking to establish a base in the region. The firm is in advanced talks with a couple of indigenous firms to form a joint venture operation in the country. QS News also understands that WT Partnership is assessing whether to dip its toe into India.

With other players such as Currie & Brown and Davis Langdon, as well as UK contractor Laing O’Rourke, already operating over there, India appears to be emerging as a key staging post for firms looking to establish a global presence.

For Bradbury, Cyril Sweett’s push is based on one emerging trend, that of foreign investment. “It’s part of our international strategy of following clients. A lot of our clients want us over there,” he explains.

The infrastructure is completely clogged up. Your first impression when you arrive there is "shit, what have I let myself in for?"

QS boss in India

Legislation has been passed by the Indian government in recent years that makes it easier for global firms to invest – this has already seen major US IT firms setting up shop in Bangalore, the centre of IT real estate in the country where nearly 9m square feet of space was leased last year. “It’s like Silicon valley,” says Bradbury. “Pretty much every US IT company is down there.” Bradbury also points to the retail market as one that could take off over the coming years. “It’s one of the big sectors,” he says. “There are plans to develop about 250 shopping centres in the next two to three years.”

Bradbury also points to a new economic culture emerging in the country – consumer spending and property investment. A young population, around a half of which is under

25, is picking up Western traits such as buying residential property and goods such as mobile phones. “It’s unlike the tradition of ‘save save save’ it used to be,” explains Bradbury. All of which points to an economy that could soon surpass the UK in terms of GDP, Bradbury concludes. And which is, importantly for UK consultants, “embracing Western help”. “For us it’s a great opportunity,” he says. A recent report on India in US magazine Fortune backed this view, quoting a director at local contractor Larsen & Toubro KV Rangaswami saying that India needed “good foreign consultants for the client’s design and supervisory work”.

With such glowing prospects other major firms must all be poised to set up in India. Not so. One sceptic is Gleeds, which scoped the market out a couple of years ago but remains unconvinced there is an overwhelming need for UK skills. “It’s fairly similar over there to the British systems in terms of cost management and QSing,” reckons senior partner Richard Steer. “You have to ask whether people would be willing to pay large international fees for projects that can be built relatively satisfactorily within India. It’s fairly well serviced locally.” Steer also doubts there is demand for higher end “value added” consultancy as yet in the country.

You have to ask whether people would be willing to pay large international fees for projects that can be built satisfactorily within India

Richard Steer, senior partner, Gleeds

Another reason for the caution is persuading staff to relocate to the country, according to a boss at Turner & Townsend. “It’s hard to convince them when we are growing so much in places such as Australia and America,” he says.

And sitting somewhere between the Indian evangelists and the sceptics is EC Harris. The firm is considering working in the country but will not necessarily establish a physical presence there, according to chairman Richard Clare. The company is in talks with major investment houses and funds that are looking to enter the market and will need “hand holding”. But that does not necessitate an office. “We can cover India to Dubai,” Clare says. “There are so many professionals in India and Dubai that (setting up an office) has become less relevant today. We do not have specific plans to set up an office speculatively.”

Perhaps some of the caution among UK firms is what has held India back from replicating the incredible rise of China – India’s economy is half the size of its Asian rival. Much of this is down to woeful infrastructure, from shambolic roads to an almost non-existent power grid and disastrous postal system. The construction of a new airport in Bangalore finally started this summer after a 12-year delay caused largely by political infighting. “The infrastructure is diabolical,” sums up the boss of one QS firm that operates in the country. “The whole infrastructure is completely clogged up. Your first impression when you arrive there is ‘shit, what have I let myself in for?’” He also points to cultural differences in the actual work itself. “It’s a bit rough and ready. Architects see costs as their fiefdom.”

And then there is the c word, namely corruption. “It’s always been rife. It’s a way of life,” says the aforementioned QS boss, citing tax officers who expect payments when companies are paid tax rebates and a planning system where officers are handed land in exchange for approvals. Cyril Sweet’s Bradbury believes that increased foreign investment will lessen such a culture. “We have found it quite transparent,” he says, before accepting that the country has some distance to go before becoming a mature economy. Another issue is working conditions and pay for workers, which is currently around the £2-3 a day mark. “It’s a big challenge for them with the growth they are going through,” he says. “It’s obviously a very different market to the UK and still developing. There is still a long way to go.”