World Superbike Round In India Facing Severe Logistical Problems

The inaugural round of World Superbikes in India is under serious threat, leaving Dorna facing severe problems just months after taking over the running of the WSBK series. Bureaucracy, customs formalities and import bonds threaten to see the race, scheduled to be held on March 10th at the Buddh International Circuit near New Delhi in India, either postponed or called off indefinitely, according to reports over on GPOne.com.

The problem revolves around the difficulties faced by the need to temporarily import large quantities of material into India, and consists of two parts, GPOne is reporting. The first issue is one of timing: the Indian round of WSBK is due to be held on March 10th, just two weeks after the opening round of the series at Phillip Island in Australia. The problem is that Indian customs regulations demand that the technical equipment (bikes, parts, tools, and other equipment) need to be in a customs warehouse in India 15 days ahead of the race, to allow the customs service time to inspect the goods prior to entry into the country. That would make racing at Phillip Island difficult, given that it would mean that the bikes would have to be in India at around the same time that the WSBK men need them to contest Superpole on the Saturday before the race.

The second problem could be even bigger. Normally, when goods are imported into a country, that country's custom authorities levy some form of import duty, a tax on imports. However, in the case of goods which are only in the country temporarily before being exported again, as in the case of racing motorcycles to be used at a round of World Superbikes, the import duty is either waived entirely, or a temporary import duty is paid, to be returned (minus a handling fee, of course) once proof has been shown that the imported goods have left the country again. The problem here is that the sums involved are large: import duty on a street-legal superbike is 105% of its new value, though what value would be used to calculate the duty on a race-ready WSBK machine remains to be seen. Similar amounts are due on all spare parts, tools and other equipment, meaning the sum required for each team in temporary import duty could easily run into the high tens or low hundreds of thousands of euros. Though they would (eventually) see this money returned, it would mean that already cash-strapped World Superbike teams need to find very large bank guarantees for a period of several months. While WSBK budgets might just be able to stretch to covering those amounts, the much poorer World Supersport teams would have a real problem handling this.

The problem of temporary import duty is not unique to India, of course. Many countries around the world impose similar charges, but usually, political support for sporting events such as MotoGP, World Superbikes or Formula One helps smooth the passage of equipment in and out of the country. Customs procedures are shortened, temporary import duty requirements are either waived or reduced. In the case of Formula One, for example, a separate internal department of FOM, the company which runs F1, deals with such issues for the championship as a whole. Dorna does something similar for MotoGP, while Infront Motor Sports has tried to do the same for WSBK. But while F1 is a global sport with an income in the billions of dollars, World Superbikes must work with a much more modest budget, which creates problems when faced with the gargantuan bureaucracy of countries such as India. But dealing with India is not easy even for F1; the Indian Sports Ministry could have waived import duty requirements for F1 by designating the race an event of national importance. They did not, leaving the F1 organization to deal with a mountain of paperwork for the event. The situation was so complex that some teams, such as Ferrari, decided against flying in development parts for the Indian race, a decision which Fernando Alonso felt cost him significantly in the title chase.

Just months after taking over World Superbikes from Infront Motor Sports, Dorna faces its first major challenge. An emergency meeting has been called in Madrid for next week to discuss the situation. At the meeting will be Dorna, the Italian shipping company charged with transport, and representatives of the teams, according to the reports by GPOne.com.

The way this situation is handled will be a test of Dorna's intentions towards the World Superbike championship, but it is also a test of Dorna's future strategy for both WSBK and MotoGP. Dorna is very keen to break into the major Asian TV markets, seeing India and Indonesia as key to their future expansion. This is a goal shared with the manufacturers, who are seeing increasing shares of their revenue being generated by sales of motorcycles on both the Indian subcontinent and Southeast Asia as a whole. Staging a race in India is the first step in Dorna's Asian strategy, and having World Superbikes visit the country first would see WSBK paving the way for a MotoGP race in the country as well.

But while postponing the race would be a major setback for this season, it could well prove to be an advantage in the long term. The India WSBK race was probably the straw that broke the camel's back in the battle between Dorna and Infront, which saw Bridgepoint, which owns both series, hand control of WSBK and MotoGP to Dorna, taking it away from the Flamminis, who have run it for the past couple of decades. Early in 2012, Dorna had been in negotiations with the Buddh International Circuit to stage a MotoGP race in April, either before or after the race in Qatar. But Infront reportedly massively undercut Dorna's offer, offering a round of World Superbikes in March for a fraction of the price Dorna was asking for the MotoGP race.

The offer was a political move on the part of Infront, the sanctioning fee being requested from the Buddh International Circuit way too little to make it a commercially viable proposition for either WSBK or MotoGP to visit regularly. Snatching away the Indian round was a victory for Infront, leaving Dorna without a race in India, the circuit showing no interest in organizing a race for the price Dorna was asking, now that they had the ultra-cheap WSBK round on offer.

Now that Dorna controls both series, however, they may be able to use their leverage to increase the price of both MotoGP and WSBK races in India to more commercially sustainable levels. This would be good for both series in the long run, with World Superbikes covering its costs for going there, and MotoGP perhaps even turning a profit. By threatening to call off the Indian WSBK round, they could hope to persuade the Buddh International Circuit management to increase the sanctioning fees they are willing to pay.

Much depends on contracts, however. If Dorna cannot blame the customs difficulties on force majeure - which seems unlikely, as customs procedures are well-known and well-established - then they may be forced to either pay off the organizers, or try to work whatever miracles possible to make the race happen. While Dorna should have been prepared to face the problems of dealing with the notoriously sluggardly Indian bureaucracy, the real problem lies in the conflict between Dorna and Infront. While both sides were busy fighting for supremacy in the Bridgepoint board room, they were neglecting to ensure that the details of the race in India would be dealt with. In the bitterest of ironies, the battle precipitated by a conflict over the Indian World Superbike round could end up causing the Indian World Superbike round to be called off.

The inaugural round of World Superbikes in India is under serious threat, leaving Dorna facing severe problems just months after taking over the running of the WSBK series. Bureaucracy, customs formalities and import bonds threaten to see the race, scheduled to be held on March 10th at the Buddh International Circuit near New Delhi in India, either postponed or called off indefinitely, according to reports over on GPOne.com.The problem revolves around the difficulties faced by the need to temporarily import large quantities of material into India, and consists of two parts, GPOne is reporting. The first issue is one of timing: the Indian round of WSBK is due to be held on March 10th, just two weeks after the opening round of the series at Phillip Island in Australia. The problem is that Indian customs regulations demand that the technical equipment (bikes, parts, tools, and other equipment) need to be in a customs warehouse in India 15 days ahead of the race, to allow the customs service time to inspect the goods prior to entry into the country. That would make racing at Phillip Island difficult, given that it would mean that the bikes would have to be in India at around the same time that the WSBK men need them to contest Superpole on the Saturday before the race.

Comments

Epic facepalm...

....been thru that myself .I love to race in a nearby country non-US territory and we face similar problems, sometimes the bikes get hold up in customs and you have to ...huh..."lubricate" the mechanism to make it faster....I didnt say that.

Total votes: 71

government

While private individuals are busy trying to peacefully conduct trade good old government steps in to ruin it for everybody.

Milton Friedman's first episode of Free To Choose contrasted the failure of the Indian government's protectionist policies of domestic hand-made silk with the success of Japanese private industry exploiting investment and high-value labour to produce better silk and faster.

My Indian friends tell me neither F1 nor Infront have paid off the right bureaucrats. Bribes: the lubricant of commerce in big government India. Sadly.

Total votes: 74

This race has been scheduled

This race has been scheduled for months, and now they flag it up as a problem weeks before the event. I tell you, world superbikes are dropping like a stone. Give it 5 years and world supers will either be gone completely or they'll be sharing the same paddock as MotoGP

Total votes: 62

As other posters have said,

As other posters have said, perhaps they had their bribes lined up and then they fell through (perhaps with some indian entrepreneur making off with whatever cash he could grab after selling them a service he couldn't provide).

Total votes: 61

100000K?

The Flamini legacy goes on, I am sure Dorna will get the blame.

If tax is 105%, isn't hundred thousand is equal to a couple of pairs of forks?

Wasn't Dorna negotiating with Buddah until Marizio popped in with an almost free offer? (assisting his brothers ousting from IMS)

Total votes: 57

The "15 day" problem....

There's obviously a way round that as the Indian F1 round is 2 weeks after the Japanese F1 race, so there's a maximum of 12 days....

As far as payments/import duty go, as has been mentioned, surely there was some knowledge of this a long time ago? Maybe the flow of 'easing' cash goes both ways some times....

Which brings me to 'easing' cash - why do organisers make such arrangements that they could find themselves having to make illegal payments? Do the manufacturers *really* want to bring racing into those markets through 'necessity'?

Surely, in the interests of the sport's future, they should refuse to go anywhere where bribes/'easing' payments are expected - as long as you continue to pay bribes, bribes will be demanded and given that paying of bribes is illegal, surely the organisers/teams could, one day, find themselves up beofre the SFO (or another jurisdiction's equivalent) just as many arms firms have found themselves both in the US and UK after the full disclosure of bribes paid to gain contracts in the Middle East in the 80s & 90s...

Total votes: 69

I have visited India long

I have visited India long time ago. You have to bribe them to get anything done. It starts right at the airport. Stupid !

Total votes: 59

It's okay people

Dorna is here to save the day. We can all sleep better now knowing that.

I have said this before here and been thumped for it, but Carmelo Ezpeleta is the less successful brother of 007's foil known as Goldeneye- except he is known as Shitfinger. Does he have no foresight? Does he have naked pictures of the management team at Bridgepoint?

PS - I hope to read later that India's lead negotiator is none other than Kevin Schwantz.

Total votes: 56

Congrats India!!!

I have so much to say, far too much to be honest, about why this particular region of the world will struggle to modernize itself like the vast majority of the Western World, but Ill put down some very big picture thoughts. BS stunts like this are one of the major reasons why these countries will hit a glass ceiling. You have what amounts to a traveling circus that has been around since the late 80s. There are dozens of other countries that the Indian government can call and talk with about what exactly WSBK or even MotoGP entails as far the arrival and departure of the series that will bring taxable revenue into the country's coffers. This is not bad press for WSBK. It is bad news sure, but it is bad press for the Indian govt. The world now sees how corrupt they actually are when they wont even let a worldwide TV show into their country for 7 days to show off their country and facilities.

It is genuinely sad to me that such simple business concepts seem to escape the vast majority of the world, but especially those that are looking to develop their economy and become world players. So much potential for EVERYONE involved here is being held up over what amounts to, literally, a drop in the cash bucket.

Situations like this are remember by businessmen, who will not look to export their product or service of any kind the country. Ive been a part of it in developing a market share in China. When a factory worker decided he had enough of the company I was working for, he simply walked down the road, bought a factory and started producing the exact same product. same chemical makeup, same packaging even. Didnt bother to change a single thing. We had to go to the local head of the district and plead our case (and by plead our case, I mean pay the guy off) about how it was us that brought prosperity to your village, it was us who provided the jobs for your people to improve their lives and you your tax revenues by default. We put in the money, the time to develop the product and people of the village and now we were losing money. Needless to say, the other factory was shut down in 2 days. But what I learned is that i dont want to be a part of business culture that operates that way. I saw again the Chinese lack of business acumen and simple ethics years later while working in the Hedge Fund market post 2008. It doesnt matter how big the market share is, if the cost of entry is too high, it simply wont happen. The days of cheap credit and money are over and hopefully wont be making a comeback. We also are seeing a return of CEOs that actually give a crap about social issues and will not put themselves in a position to have to do these kinds of things until absolutely necessary and by necessary, I mean they have gone everywhere else in the world and are now left to choose the best of the worst to grow their business.

It is also why I dont fear the Chinese or the Indians as far as their economic take over of the world goes. They make and have more money dollar for dollar, but that doesnt really mean anything when you consider that both counties have populations that are more than triple that of the United States. I expect them to have that. When you start bring out revolutionary products and ideas to the market like Apple, Google, Research in Motion, GlaxoSmithKline and BAE Systems, then we can talk about your economic takeover.

But at the end of the day, all of this, its a whatever to me. No big deal. Lets forget about it and move on. They dont want the show, then I dont want to watch it there. Its that simple. I dont have time to play funny little games like this anymore. And its probably why Im not consulting for Dorna.

Total votes: 61

f****ing indian govt and

f****ing indian govt and authorities…bringing shame and bullshit to the country forever…people around here that are even mildly into racing and bikes have been totally stoked for 10th march ever since the official news was declared a few months ago and now this bullshit just 2 months from it…

i dont blame the people who say the race should altogether be cancelled…i myself have half a mind towards the idea, seeing as how they dont seem to realise or have any appreciation for what a good business/tourism/exposure an international sports event like this brings…i dont expect them to appreciate or like or even tolerate racing, but how hard is it to see this is good business for the economy..

shame shame shame...they brought a huge shame to us (people) with the whole commonwealth games scandal (huge huge one), then with the olympic committee suspending the indian teams just a couple of months ago due to excessive interference in various IOC procedures from the indian sports ministry, and then this one which actually for me is even more hurting and shameful for me because i am into racing and not the various things they play in the olympics and the commonwealth...

Total votes: 59

Scrap the round. I know the

Scrap the round. I know the MSMA wants in there bad, and so do the people, but the government is a blocker and just let it go. Robbery from them while we are still in a recession and racing in general struggles to generate revenue in sponsors.

If they are too dumb to see how much revenue an international sporting event brings then good riddance. Go to Indonesia instead.

Total votes: 63

you're in a position to negotiate...? (clint eastwood voice)

re: "Scrap the round. I know the MSMA wants in there bad, and so do the people, but the government is a blocker and just let it go."

that's what i'm screamin'. pull the plug...!!! WSBK is a mature product with 25 years of brand equity and the manufacturers are ALREADY in there selling product. the only thing india's got is a recently built multi-million rupee facility collecting dust. just like a capital expenditure on a piece of equipment... it's a worthless investment so long as the item (in this case a racing circuit) sits idle. have fun with your track india. don't call us, we'll call you.

Total votes: 65

vijay, talk to your peeps (but pay your taxes first)

re: "But dealing with India is not easy even for F1; the Indian Sports Ministry could have waived import duty requirements for F1 by designating the race an event of national importance. They did not, leaving the F1 organization to deal with a mountain of paperwork for the event."

sounds like F1 needs to pull the plug as well. after F1 "cancel's christmas", maybe the land can be used for grazing animals like VIR in the states was once used for...? just sayin'... it's an option.

Total votes: 62

Another of India's contradictions.

I have spent a fair amount of time visiting India on business (I have never lived there or worked there as such, so I’m not an expert)and this doesn’t surprise me as much as it disappoints me. I have seen this type of scenario many times whether dealing with private companies or government departments. Pragmatic businessmen routinely pay off the officials ‘getting in their way’. Most times (in my experience) it’s simply trying to make good things happen and get around rules that ‘seemed like a good idea at the time’ and very poorly paid public officials trying to earn a decent living. The trouble is that now some people are making fortunes and creating bad outcomes because of the corruption. I once worked in the Middle East and an Indian told me “You introduced us to bureaucracy – we perfected it”. I didn’t realise what he (truly) meant until I went to India on business some 20 years later….
I have worked in most of the BRICS countries (except Russia) and each is profoundly different. India and China are touted as the main emerging markets but India has so many regulations that specifically include or exclude things that are nowadays overtaken by technology or events that you get tied up in knots. And the old ‘too nice to say No’ characterisation is pretty accurate too – you think you have ‘made them see your point’, when in fact they just don’t want to say ‘read my lips…..’. Or they havn't been paid enough....
If I were a team owner I would make sure we had enough spares to build more bikes for the next round…….

Total votes: 60

Just rename the Round to a Cricket tournament..

.. and everything will work out just fine :P

Seriously though, ours is not(yet) among the smartest or most honest of governments and I would not be surprised if many of the officials involved have never heard about WSBK or bike racing even.

What I don't understand is how DORNA\INFRONT fixed the calendar in a new circuit in a country that has never hosted a race before without making sure that there are no surprises like these. Surely they have experienced something similar before, no?

It is unfortunate that this mis-understanding is happening but looking at the bright side, it will hopefully educate the officials and alert DORNA in the future, especially when MotoGP comes(that is if DORNA is not pissed off by this experience and still considers bringing MotoGP here).

Total votes: 63

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