Principal Oferta institucional a nivel nacional

In June 2005, I accompanied Vinay, a young developer who worked with his father, to the municipal corporation building in one of India’s metros. Inside, its halls were teeming with men in the bureaucratic uniform: drab button-down shirts and brown pants. Vinay stood out in his deep blue shirt and snappy black trousers. The mint green hallways of the planning wing were crowded and hot, with no fans. Boys ran in and out with glasses of chai in wire baskets. Vinay was sweating, and he seemed a bit nervous. “I hate doing this, man, I just hate doing this,” he complained. We had come to do a little bribing.

Vinay wanted to remove a staircase from the plan for one of his buildings. For the signature of the deputy chief planning engineer bestowing final approval on the drawing, Vinay had counted out Rs5,000 and carefully placed it in his right front pocket before

coming into the building. He had other bills in his left front and right back pockets. He told me, “What’ll happen is I’ll go in and ask how is he doing, ask after his health, some niceties. Then we’ll shake hands, he’ll open his drawer, and I’ll just put the money in. Done.” We were waiting in the hallway for the “liaison architect,” an intermediary who arranges these meetings, usually between the developer’s “design architect” and the appropriate clerk or official. Vinay wanted to come himself to make sure he’s not asked for too much money. For this signature, he will pay the clerk Rs2,500 and his boss Rs5,000, as arranged by the liaison architect and the clerk in advance.

I asked Vinay how many times in the life of a project he has to come here. He replied,

If you don’t make any revisions, then once at the beginning for approval of the plans. Then for the NOCs [No Objection Certificates] – fire, lift, drainage, etc., then again for the

completion certificate. So that’s three, if you don’t revise. And when you’ve poured the first [concrete] slab, then you send your car and you bring the chiefs down to the site and they just see that everything’s going as per the plan.

The liaison architect arrived and told us our appointment was not for half an hour, so we went upstairs to two other offices to deal with other matters. Vinay ducked into one office and came out ten minutes later, disgruntled. The official had signed all but one of the forms he needed and then had been transferred. For the one remaining signature, the official’s replacement was asking for as much as Vinay had already paid. Nevertheless, Vinay paid him.

The last chapter introduced the foreign developers, private equity funds, and

investment banks that have invested in Indian real estate since foreign direct investment was further liberalized in 2005. For them, Vinay’s routine visit to the planning office would be a nightmare. Regulations in these firms’ home countries prevent them from bribing foreign officials, a requisite step in the construction and approval process.1 _{More importantly,}

navigating local planning bureaucracies requires local knowledge and connections. Even Vinay, involved in his father’s business for five or six years, relies on the liaison architect as an intermediary; still, he found he had to pay twice for the same job. Most developers operate through several layers of contacts: design architect, liaison architect, clerk, official.

1 _{The U.S. Foreign Corrupt Practices Act of 1977 and the OECD Convention on Combating Bribery of} Foreign Public Officials in International Business Transactions, which has been ratified by thirty-seven countries, prohibit payments to foreign officials for the purpose of obtaining business (OECD; U. S. Department of Justice). My informants referred to the U.S. Foreign Corrupt Practices Act by name.

Even then, as Akhil Gupta points out, bribing is “not . . . simply an economic transaction but a cultural practice that require[s] a great deal of performative competence” (A. Gupta 1995: 381). The Indian-born, U.S.-trained representatives that many foreign investors send to India to find investment opportunities (never mind their European and American counterparts) often lack the cultural capital and district-level contacts needed to buy land, change land use, and obtain permits – in short, to construct buildings in India.

Navigating local bureaucracies to bribe planning officials is just one of a number of hurdles that foreign investors encounter as they try to invest in India real estate. First, foreign companies face legal hurdles in buying agricultural land in most states. Second, land holdings are extremely fragmented, making assembling large tracts of land for construction projects difficult and time consuming. Third, from the point of view of a foreign investor, the land titling system in India is Byzantine, a Pandora’s box of village-level records, many in dispute between various parties. There is no title insurance to cushion the blow if someone should appear months or years into a project to dispute the land title, and the Indian courts are a notoriously Dickensian place to settle such disputes.2 _{Since investors plan to sell their}

assets in the future, land title complications jeopardize their ability to “exit” a project profitably. The analyst for an international real estate fund asserted, “We will not invest until all the land has been aggregated, has been put into the investing company, is clean, is usable, is transferable, is zoned for the right purpose, has to be. If it's not happening, we are not investing.”

2 _{According to an article in the Wall Street Journal, fully one third of the 26 million cases pending before the} Indian judiciary in 2002 were property disputes; cases often take up to 15 years to resolve (Slater 2002). D. C. Wadhwa (2002) describes numerous problems with India’s land titling system. Beyond missing, outdated, and faulty records, he argues that the basic problem is that Indian land titles are presumptive, not conclusive; the government does not guarantee ownership, which is always open to challenge in court.

Given this impasse, foreign funds have turned to Indian real estate developers, who now find themselves in a lucrative position as intermediaries. Many Indian developers have already assembled large parcels of land (a practice locally called “landbanking”), and they are adept at negotiating the legal and political hurdles of land development. As a result, they now assemble and clean land for international investors and developers: they bring parcels with clear title, land use change approvals, and other permits into a joint venture where the foreign partner provides funding, serves as the developer, or brings other expertise to the project. By taking on the initial risks in the development process, navigating local politics, and assembling land parcels (often using intimidation, extortion, and violence), Indian developers transform Indian land into an internationally legible asset, a profitable route for foreign investment.3

In their position as intermediaries to foreign investment, however, real estate

developers in India today find themselves caught in a double bind. In order to participate in the international market in Indian real estate, they need to appear clean and transparent, yet their position as intermediaries requires that they do the “dirty” work of land agglomeration. This chapter examines Indian developers’ contradictory new position and the personal transformations it entails. It considers the role that discourses of transparency play in changing some Indian real estate practices while hiding others. Although triumphant

3 _{Oil “fixers” play a similar mediating role in the oil industry, enabling oil companies to take part in dealings} that anti-bribery laws prohibit. Ken Silverstein (2009) reports,

Edward Chow, a former Chevron executive who spent more than three decades in the oil business, described to me the logic by which fixers thrive. With the U.S. anti-corruption laws, he explained, “There is no gray zone. The lines are drawn very strictly. On the other hand, executives of oil companies are sent overseas to make deals, and they are measured by performance: you either make the deal or you don’t. So you’re supposed to be clean but you’re also supposed to create business. That leads to a tension, and a temptation to use middlemen. Let him do whatever he needs to do; I’m not a part of it and don’t want to know.”

narratives about the transformative powers of globalization would have us believe that foreign investment brings increased transparency to the murky business of Indian real estate, in fact, it merely creates new patterns of revelation and obscuration.