Mumbai unbowed by attacks

Richard Orange

• Last Updated: October 24. 2009 6:46PM UAE / October 24. 2009 2:46PM GMT

Early next month, the head of London’s Metropolitan Police, the former secretary of the US Department of Homeland Security, and a panel of international security experts will gather in Mumbai’s Trident Hotel for a “security and resilience summit”.

People walk pass the Bombay Stock Exchange (BSE) building displaying India's benchmark share index on its facade, in Mumbai September 30, 2009. The BSE Sensex climbed above 17,000 points on Wednesday for the first time since May 2008, led by banks and Reliance Industries on hopes quarterly earnings would top expectations. REUTERS/Punit Paranjpe (INDIA BUSINESS)

That some of the world’s foremost experts on terrorism, including Sir Paul Stephenson of the London Met and the former homeland security secretary Michael Chertoff, are willing to spend a day and night in a hotel where militants killed more than 30 people just a year earlier is a sign of how much the city has recovered. (Many of the same faces were in the Trident for a similar conference as early as January).

In the time since 10 Pakistani gunmen brought terror to Mumbai for two days starting last November 26, India’s main business hub has bounced back.

The Bombay Stock Exchange reopened for trading two days after the attack started, even while gunmen were holding police at bay in the Taj Mahal Palace hotel just a five-minute walk away. Remarkably, the market’s Sensex index finished the day’s trading 0.7 per cent up.

In the first two days, the city lost about US$500 million (Dh1.83 billion), said Narinder Nayar, the chairman of Bombay First, which is organising the security conference. “But has anyone left Bombay because of the attacks?” he asked. “No. Within 48 hours, the city was back to normal.”

The Sensex is now trading more than 80 per cent higher than it was a year ago, boosted by a rebound in the Indian economy this summer.

The greatest impact has been on international companies and the 75,000 expatriates who work in the city.

If the delegates at next month’s conference want to be properly insured – and most will want to be – they will find premiums are still stubbornly above where they were before the attacks.

“We have seen that since the attacks, Mumbai has been rated on a relatively higher risk scale by Lloyd’s as well as other insurers, especially on personal accident insurance as well as kidnap and ransom,” says Smita Malik, the director of commercial sales at Clements International, based in Washington, which specialises in insuring expatriate workers.

In the month after the attack, investment by non-Indians willing to engage in business in India dried up, says Richard Dailly, the managing director in the country for Kroll, an international risk consultancy. “It was almost as though someone had flicked a switch.”

Many of the city’s expatriate workers sent their families home early for Christmas, and some firms even repatriated staff.

This was entirely what those planning the attacks had intended. By targeting Mumbai’s two leading business hotels, they sought to undermine the city’s importance as an international business hub.

Paul Polman, the new global chief executive of Unilever, the Anglo-Dutch consumer goods giant, and his predecessor Patrick Cescau, were two of the senior international executives trapped in the Taj hotel during the siege. The company had been holding a handover ceremony for its leading Indian executives.

Bankers from the US investment bank Morgan Stanley, meanwhile, were trapped for hours in the Trident, where the company had its Mumbai office. Top executives from HSBC and Warner Brothers were also trapped inside.

But confidence has since slowly returned, Mr Dailly says. “Non-Indian businesses operating in Mumbai have not forgotten that there is a terrorism threat in India, but they recognise that it is entirely manageable, much as it is operating in Istanbul, Madrid or London, cities which have also been recent targets of terrorism,” he says.

When the Trident reopened at the end of December, Morgan Stanley decided to move back into its suite there and, in March, Mr Polman returned to the Taj Palace for another company conference, joking that he had come “to finish a meal”.

Mr Polman spent the night in the hotel’s modern Tower section, as the hotel’s best rooms in the heavily damaged 105-year-old heritage section will not be ready until January.

Others, such as Hillary Clinton, the US secretary of state, have also made a point of staying in the hotel, and even business people who were wounded in the attacks say they would return to Mumbai. Harnish

Patel, a British property executive who was badly wounded when the militants fired on Leopold Cafe, had originally planned to discuss his job prospects with a number of firms in Mumbai.

After being shot three times in the legs, Mr Patel had to use crutches until March. But he has since recovered and hopes today to beat his 2006 time in the UK’s BUPA Great South Run.

He is still looking for work, and while he wants to stay in the UK in the near future, he says Mumbai is still an option in the long term. “I wouldn’t disregard going to India again,” he says. “This kind of attack can happen anywhere in the world. It wouldn’t put me off.

“Indians are a resilient bunch. It’s probably where it comes from in me: my family had to go from India to Africa, and in this country we’ve had to work from nothing. It probably gives you character. It’s why I’ve come back the way I have. It’s embedded in me somewhere.”

Given Mumbai’s similarly rapid recovery after the bomb blasts in the city in 2003, it is difficult to disagree with him.

Still, just as the cost of insuring expatriate workers has increased, so has the cost of protecting them. Sandeep Sudan, the head of the northern region for Mahindra Special Services, one of a burgeoning number of Indian security firms, says business has increased by as much as 40 per cent since the attacks.

“Revenue-wise, we are seeing good growth,” he says. “There has been an increase in customers, primarily related to physical security.”

Raghu Raman, the chief executive of Mahindra, spent 50 to 60 hours outside the Taj on the nights of the attack, providing advice by telephone to Mr Polman and other clients trapped inside.

Other companies have also launched security services. The Indian building firm DLF has formed TerraForce, its own security outfit, trained by the Israeli army and the US marines, to patrol its properties. Infosys, the IT giant, and the country’s largest private-sector firm, Reliance Industries, have both been allotted permanent protection from India’s state Central Industrial Security Force (CISF), whose officers, unlike those in private security firms, are permitted to carry firearms.

Hiring private security is arguably necessary, given the evident failings of the Indian state security forces during the attacks. The police were armed with nothing but bamboo “lathis” or sticks when they had to face the militants. Members of the elite National Security Guard (NSG) took eight hours to travel from their base in the state of Haryana to the hotels, and then it took two more days to defeat the 10 gunmen.

At the time, the Indian government declared it would reorganise security forces to prevent a recurrence of such a failure. But plans to post NSG teams in Mumbai, Kolkata, Hyderabad and Chennai, the four likeliest terrorism targets, have been delayed. The contractor building accommodation for the NSG personnel says that even pre-fabricated temporary barracks will not be ready in Mumbai by the deadline next month, while the proper facilities will now only be completed by 2011.

“The government machinery has moved in, but there’s a lot of red tape-ism and bureaucracy, so it’s moving slow,” says Mr Sudan.

“It is not that the threat is not there, or that things have changed.”



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