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Heavy production losses seen for Gujarat industry

Industrial units in quake-hit Gujarat face production losses of Rs 7.5 billion to Rs 10 billion over the next two weeks but losses from damage to assets will not be heavy, a leading industry body said on Monday.

"Industrial units are expected to operate at only 50 per cent of current capacity in the first seven days," the Confederation of Indian Industry said.

According to CII's latest assessment of the situation in Gujarat, the loss of life, property and assets in the Kutch region is incalculable.

There has been a total breakdown of electricity supply in the Kutch area with extensive damage to the transmission and distribution lines. The roads and telecom network have also suffered severe damages and the bridges are inoperable.

The entire Kutch region has been devastated with all the houses, colleges and schools completely damaged. In these circumstances, with the entire infrastructure in the Kutch region destroyed, the CII pointed out that the monetary impact would be very difficult to calculate.

In the area outside the Kutch region, the damage to property has been extensive in many buildings and the loss is estimated at Rs 15 billion.

Besides the buildings that have been damaged, there is panic among other people to return to their homes with no reliable information to gauge whether the houses are safe, CII has stated.

There is an urgent need for at least 100 civil engineers to help in assessing the extent of damage to these commercial as well as domestic premises, according to CII.

The industrial units in these circumstances, the Confederation has stated is expected to operate only at 50 per cent of its current capacity in the first seven days. The operations would be mainly impacted because of several employees in various factories leaving the area and the support services including transport, banking and Insurance companies paralysed at present.

Even though economic loss by way of destruction of assets may not be much for the industry, there would be a loss in production because of these factors, according to CII.

Even in the next seven days, the industry is expected to operate at 70 per cent of its capacity.

The estimated total loss due to slow down in production will be approximately between Rs 7.5 billion and Rs 10 billion over the next 15 days, according to CII.

The CII is mobilising all its resources through its domestic as well as overseas offices to extend relief to the affected areas.

CII has undertaken the following measures:

• CII is in negotiation with its members to mobilise doctors and nurses for the affected region.
• After its first dispatch of 20,000 blankets and medicines to the earthquake victims, CII has got in touch with it's members to send fresh supplies of essential medicines and items like lanterns, drinking water etc.
• CII is also exploring avenues to erect temporary structures to house the victims of the earthquake.
• CII has requested civil engineering companies from its membership to nominate engineers and move to the affected areas to assess the buildings and certify safety factors.
• CII has constituted Steering Committees at all its offices to mobilise resources for the affected people.
• The CII has also pointed out that several of its members are already operating in the affected areas. These companies have moved in with earthmoving equipment, telephone handsets, telecom equipment, medical equipment and supplies and are fully engaged in the relief operations.

CII has pledged its full support to the government to overcome the crisis. It reiterated that the industry would whole heatedly support in the reconstruction of the state of Gujarat.

"In the next seven days, the industry is expected to operate at 70 per cent of its capacity," it said in a statement.

The leading industry body said it expected operations in factories to be hit by absent employees and paralysed support, transport, banking and insurance services.

"Even though the economic loss by way of destruction of assets may not be much for industry, there would be a loss in production because of these factors," CII said.

The earthquake that left a trail of destruction across the prosperous industrial and agricultural state on Friday killed an estimated 20,000 people and left tens of thousands injured.

But it caused little damage to its industrial and commercial operations.

Gujarat has a number of major industries including petrochemicals, pharmaceuticals, oil refining and textiles besides being home to India's busiest port.

CII estimated the damage to property in Gujarat at around Rs 15 billion, excluding the worst hit district of Kutch.

It said with power distribution and transmission systems destroyed in Kutch, roads and telecom networks severely damaged, the monetary impact of the destruction there was difficult to calculate.

A majority of the dead have been reported in the Kutch district which includes the worst-affected towns of Bhuj, Anjar and Gandhidham.

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