American's dream of a ski resort in India appears thwarted
To John Sims, the Himalayas, with some of the finest mountain slopes in the world, seemed like the perfect place to build India's first Western-style ski resort. But in seven years of trying, the developer with years of experience working in India, has encountered seemingly endless setbacks.
The New York Times
MANALI, India — To John Sims, the Himalayas, with some of the finest mountain slopes in the world, seemed like the perfect place to build India's first Western-style ski resort.
But he got his first clue about the uphill challenge he faced when the local gods — or at least the holy men who claimed to speak for them — came out against his project in Manali.
In the seven years since, Sims, a U.S. hotel developer with years of experience working in India, has encountered seemingly endless setbacks.
Some opponents claimed, falsely, that the 115-acre Himalayan Ski Village would take over the entire valley. Others complained that the developers had underpaid landowners for their property. The state of Himachal Pradesh, which had once championed the $500 million proposal, moved to scrap it after a different political party took over. Now, a court has allowed it to go forward but has given the developers just six months to secure environmental permits from a government that has repeatedly stalled the project.
It is not easy for any company to do business in India, with its mercurial and ponderous decision-making, creaky court system and woeful infrastructure. Witness the immense blackouts of late July, in which the electric grids serving half of the country's population collapsed under the strain of the hot summer and too few power plants. The World Bank ranks India 166th of 183 economies in the ease of starting a business.
Indians have a deep-seated distrust of overseas businesses, rooted in more than 200 years of exploitation by the British. For many years after gaining independence in 1947, India restricted trade and foreign investment, nationalized industries such as banking and gave licenses to favored domestic conglomerates. In the 1970s, socialist leaders pushed companies such as Coca-Cola and IBM out of the country.
After the government began loosening restrictions two decades ago, foreign firms piled into India, with many achieving great success. The Japanese company Suzuki, for instance, controls nearly half of the domestic car market.
But India remains an unpredictable, even hostile, place for many foreign companies.
Parliament passed a retroactive capital-gains tax this year on offshore transactions involving Indian assets, overriding a Supreme Court ruling favoring foreign firms. Last year, policymakers deferred a decision to allow foreign mass retailers such as Wal-Mart into the country after opposition politicians and shopkeepers protested, even though Indian companies are allowed to build similar stores.
Foreign direct investment was strong last year. But in the first six months this year, it fell to $16.5 billion, down 18 percent compared with the same period in 2011, according to the Reserve Bank of India.
India's economy is slowing sharply and becoming even more reliant on foreign capital. Prime Minister Manmohan Singh has become concerned enough about the disaffection that he has pledged more friendly policies.
Sims, 60, said any help would be welcome.
He came to India in 1975 as a follower of the Hare Krishna movement and wears a string of Indian prayer beads around his neck. He grew up in the suburbs of Detroit and cut his teeth developing resorts in Key West, Fla. Later, he worked as a consultant to the Oberoi Group, an Indian hotel chain, among others.
About a decade ago, with the backing of investors such as Alfred Ford, a great-grandson of Henry Ford, Sims set his sights on building a ski resort such as Vail in Colorado or Davos in Switzerland. The few existing places to hit the slopes in India were hard to reach and had few amenities, so there was little competition.
Ideal site, but ...
Manali has long been a tourist destination for Indians, but most of the foreigners it draws are backpackers. There are no five-star hotels, and the roads are lined with small shops that sell tea and rent winter coats.
The resort investors found a seemingly ideal site: a hilltop studded with fir trees, accessible only by a steep, winding path. Though nobody lives on the spot year-round, villagers grow kidney beans and potatoes and graze their cows there. From three sides, there is a breathtaking view of the Kullu Valley, and the fourth side backs up to a mountain on which Sims planned to build a ski lift that would climb to 14,000 feet.
"It's just about as spectacular as you can get," he said after an hourlong hike to the hilltop.
Though the location is a 10-hour drive from the nearest major airport, Sims was optimistic about creating a winter wonderland. After a gondola ride up to the car-free village, visitors would find luxury hotels, a crafts bazaar, an ice rink and the ski lift.
Himachal Pradesh, then governed by the Indian National Congress Party, supported the project at first, agreeing to lease Sims forestland for skiing and to exempt him from a law that restricts land ownership.
The Ski Village would create 4,000 jobs, Sims said, and bring hotels such as the luxurious Six Senses Resorts and Spas to the valley. Many residents, especially those involved in skiing, river rafting and other sports, supported the project.
But other residents were apprehensive. Some complained that lewd, loud Westerners would defile the area, known as "the valley of the gods" because of the many Hindu deities said to reside here.
The main opposition party, the Bharatiya Janata Party (BJP), argued that the Indian National Congress had not paid enough attention to local concerns. One BJP politician organized a meeting of the holy men, who said the deities opposed the project.
"We are not against development," said Govind Singh Thakur, a BJP leader who represents the area in the state legislature. "As long as the people's issues are sorted out, they are welcome to come here."
One landowner, Geeta Devi Katoch, said many people were angry when they learned the developers had quietly bought some early parcels of land for one-third the price that prevailed once people learned of the project. She said her family, which grazes cows on the hilltop, would not sell.
"This land is all we have," she said. "What will we do if we sell?"
Sims and his partners acknowledged that some land deals were struck at lower prices — something they say could have been handled better — but said that those prices were reached through negotiations. They added that they offered local residents training and jobs, and sent 60 young people to Finland for skiing lessons.
Once the BJP came to power, the state appointed a committee to review the proposal. Before the committee made a recommendation, court documents show, the state moved to cancel its agreements with the Ski Village, arguing that the company had not moved fast enough to start the project.
In June, the Himachal Pradesh High Court ruled the project could go forward and gave Sims six months to obtain environmental approvals. But the environmental agencies are not obligated to review his application quickly, and the state has vowed to appeal the court decision. The political situation might also change this year, when state voters go to the polls.
Sims said he was no longer hopeful and believes the odds were stacked against outsiders.
"People who do love India or who could easily love India would be very happy to contribute their talents and money," he said. But "it's the robber-baron era: only those strong Indian businessmen who know how to play the game can succeed."
Neha Thirani contributed reporting from Mumbai.