Sukhna Lake is man made and stunningly beautiful: nestling in the foothills of the Himalayas, it was created by le Corbusier (no less), who prohibited motorboats from using the waterways and cars driving across the dam. If you’re brave enough, you can find crocodiles lurking in the waters and for the less adventurous, rare Siberian ducks, storks and cranes: the intricate diversity of its complex wildlife led to the area being declared a Protected National Wetland by the Indian Government in 1988. All of which makes it more than a little surprising that Tata Camelot Housing Colony got a green light to build a multi storey $252 Million housing and upscale retail development less than 130 meters from the edge of the wildlife sanctuary. Corbusier must have been spinning in his grave.

But not anymore…

India’s Supreme Court ruled last month not only that the Tata development “violated environmental norms” (you can say that again) but also that State authorities in Punjab had “failed to protect the eco-sensitive zone”, and the reason for this crass insensitivity and breach of duty was probably related to the fact that no less than 95 senior Punjabi officials had been given apartments in the development by Tata. 

Not for the first time, we can be grateful for a robust and independent judiciary: and for those still buying into the crusty and out of touch stereotype, just remember how an unlawful prorogation of Parliament in the UK was reversed and the illegal triggering of Article 50 finally reined in and stopped. And over in India, the Siberian ducks are safe for the time being, which has to be a good thing.

But what broader lessons can we draw from the aborted Tata development at Sukhna Lake?

Well, for a start, it demonstrates the importance of legal certainty and a reliable judiciary plays not only in environmental protection but also by providing the clarity and predictability the business community needs for effective decision making (whatever Tata might think). For too many years the Indian legal system has been notoriously slow and unpredictable, acting as a fetter on investment and commercial activity, but not anymore. Decisions like Sukhna Lake show the subcontinent’s courts at their very best: moving quickly and decisively to provide the clarity and certainty that was so singularly lacking before and that’s good news in particular for the construction sector where long term uncertainty can so easily kill a project stone dead.  

The new Statutory Adjudication system introduced by Prime Minister Modi’s Government in 2017 has had much the same rejuvenating effect on the construction sector: reducing the time taken to resolve disputes and adding clarity to the outcome so that works can continue during the resolution procedure. Added to that, wholesale cutting and removal of previously stultifying swathes of red tape, not least in the shape of planning restrictions, has made front end project planning easier too. The administrative procedures leading up to the Sukhna Lake debacle demonstrated the old system operating at its worst.

 And of course, let’s not forget those 95 Punjabi Officials who saw nothing wrong in grabbing an apartment in the very development they were asked to approve: the sort of unreliable, mendacious and avaricious official that used to bedevil Indian business, but are now being driven out by a programme of anti corruption initiatives launched by the Government (remember demonetisation) and, of course, by a newly rigorous and determined judiciary.

This is one of many innovations over recent years that has led to India changing almost beyond recognition, with a vastly improved culture of compliance …and not a single Siberian Duck was harmed in the process.

 

Find out more about Modulex 

 

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, working to meet the opportunities of India’s real estate markets in a practical and focussed manner. It was established by Red Ribbon to harness the full potential of these fast-evolving markets and deliver exciting opportunities for investors: because, when it comes to investing on the subcontinent, nobody knows its markets better than Red Ribbon.

Executive Overview

I’m old enough to remember the bad old days when a culture of non-compliance and uncertainty did, indeed, bedevil business on the subcontinent, but my word how things have changed over the last decade. 

The legal system has become much more reliable and quicker, delivering the certainty all business needs for effective and sure decision-making and as the article says that is nowhere more important than in the construction sector. Long term project planning requires short-term conviction. 

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Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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