Saytam, Trucker’s Strike, Plumbing and Building

SAYTAM – This is the large computer services company based in Hyderabad. We have been at ground zero in the collapse of the company. 53,000 employees are affected. We have driven by the headquarters almost every day. Along with the global business slowdown, Saytam has been a constant discussion topic. It will be interesting to see how it all shakes out. Price Waterhouse has certified Saytam along with 92 other large Indian companies and then Saytam admits that the $1.8 billion it has on the books for capital reserves is non-existent. We watched the TV last night as the acting CEO basically evaded every question thrown at him along with the where abouts of the CFO. The head of the Indian School of Business (who is affiliated with the Wharton Business School) has resigned in disgrace as he was on the board of directors and had approved the activities.

Matyas (Saytam spelled backwards) is the construction and real estate arm of Saytam and run by the CEO’s brother. It had received the contract to build the Hyderabad light rail system and is about a year into construction. It looks like Matyas will probably go down in the dust along with Saytam and might pull one of State Banks of India with it. The two brothers have been arrested and are in a jail somewhere. The CFO has been found and is also in Jail. The HQ of Price Waterhouse Cooper in India was raided by the federal police yesterday as they try to determine the extent of what PCW knew about the fraud. There was an editorial in this morning’s paper asking what really went on. The two brothers had reduced their stock ownership from 27% down to 3% over the past several years while keeping the stock price high by the financial manipulations. So where did all the money go? Matyas, the construction side of the company, is coming under severe scrutiny also. They had won the contract to build the Metro Rail system and had started about a year ago. Very unique bid in that they would finance, build and operate the system for 35 years and then turn the system over to the city. Matyas was the lead player in the consortium to build the system (plus several others including the company that built the Tokyo system). But what makes the deal so interesting was that Matyas was actually set up to pay the city of Hyderabad from 1 to 10 Million dollars every year between now and the 35th year. So when the next payment / financial check happen in March, it will be interesting to see if they still are a viable company. The item in this morning’s paper was there are actually 41 companies under the Saytam / Matyas umbrella. Like I stated, we are at ground zero of this economic meltdown

TRUCKER’S STRIKE – There is a Trucker’s Strike that started on Monday 5th.  The government of India controls the price of petrol and diesel.   It is currently fixed at 51.1 Rupees per liter which makes it between $3.75 and $4.00 per gallon with diesel fuel about 20% less.   The price has not changed even thought the world price of oil has dropped below $50 per barrel.   So the truckers are on strike against the government and want the price of fuel brought down immediately.   So shortages are starting to happen.  The lines at the fuel bunkers (read gas stations) are getting quite long and several of them are roped off as they have no fuel.  Reading in the morning paper that aviation fuel is in short supply and some flights are now being cancelled because of it.   It all should get resolved in a few days but according to this morning’s paper, the two sides are not even talking yet. This has finally been resolved by about Thursday, Jan 14^th. The fuel issues got solved in 4 days after the Government fired the top 40 managers at the state oil company. The balance got resolved this past week when the government announced it would set up a commission to look into the issues. So we were out late Thursday night and discovered all of the truckers were back on the road.If they only can take one lane in the city, that means that there is miles long line crawling along at the pace of the slowest one. And as the other vehicle you have merge your way back and forth across the line.

PLUMBING – Bathrooms are an interesting challenge in India.   Bathrooms in Hyderabad are fairly normal, western looking affairs.  When you get into the rural areas that changes.   Showers are more of a challenge.  The bucket bath is the most common.  Even in Hyderabad, everyone has the buckets in the shower area (Greg posted a good picture on the blog).  Many shower heads do not work. so you fill the bucket with water and use a small bucket / ladle to pour the water over your self.  The question is whether you will have warm or hot water.  Most homes have solar water heaters (it might even be a government mandate), but the typical time for an Indian shower is at the end of the work day prior to the evening meal.  That means the water has had all day to warm up.  So the normal western process of taking a morning shower is a crap shoot as to whether you will have a hot one or not.   A couple of the places I have stayed have on-demand water heaters.  This is fine if you have reliable electric connection.  But for the week we were outside Hyderabad we would loose power everyday for at least an hour or so.   So for at least a couple of mornings it has been a cold shower.  I know that a couple of the ladies on the team have really struggles with this issue.

CONNECTIONS – Rotary connections in India have been incredible. The other day we visited Ramoji Film Studies – the largest film studio in the world according to the Guinness Book. It wasn’t so much the complex but the fact we got to spend 1/2 hour with the owner / chairman talking about film making around the world. New Year’s eve was spent at the Yellunu Club which is the club for the management of the Yellunu coal mines. The fact that many of the Rotarian in the town are ex employees allowed in. But the highlight was spending almost and hour talking to the head man. He has 70,000 and products 15% of all the coal in India. It was very interesting talking about coal, mining, energy issues now and into the future with such a high level person. Saytam situation has been commented on but it is interesting that one of the Rotarian has been on the news every night being interviewed about the situation and then he will be at the social function with us that evening

BUILDING CONSTRUCTION – Different approach to building then I have seen before. There is virtually no wood so concrete and brick are used. The normal approach is concrete pillars supporting a concrete slab. All the partitions are supported by bamboo while the slab dries. It seems strange to see the forest of bamboo poles holding up the slab. But they are all taken out and reused on the next floor. Of course there is bamboo scaffolding around the outside of the building. I was told that all buildings are constructed to last 100 years. Once the pillars and floors are done then the walls are all built with brick and then plastered over with concrete. I am not sure when they decide to install plumbing, probably before the brick walls, but electrical work is done after the walls are finished. They then go back in and channel out the runs for the electrical wires, and then replaster over the wires. They use marble / granite throughout the buildings for floors.   Sometimes it is put in before the walls are finished, which makes for strange sites under hte construction dust.  Wood working (cabinets, etc) are all made on-site.  There seem to be no prefab material used.  So everything is hand-made.  The other thing I find strange as all of the columns on the roof and the floor slabs have rebar that is ready for the next addition. It is like everyone plans to continue the buildings at a later date. But the exposed pieces of rebar are unsightly and it seems to me to be very vulnerable to rust in the monsoon season. We finally saw on top of the district police HQs, where they had put temporary concrete caps on the rebar to protect the exposed ends, but individual buildings don’t seem to be done that way.

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