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| August 1, 2005 | Monday | Jumadi-us-Sani 24, 1426 |
Financial hub paralyzed by monsoon rains: Mumbai Letter
UNLIKE most other Indian cities, Mumbai has an elaborate network of storm water drains and sewage lines that collect rainwater and liquid waste and deposit them into the sea. Much of this extensive network was built between 50 and 100 years ago (when the city’s population was a fraction of today’s 15 million), and though they were not meant to handle such huge volumes, their performance over the decades has been excellent.
Unfortunately, greedy builders and land sharks, corrupt civic and government officials and crooked politicians have played havoc with urban planning norms; not only have the existing underground network been ignored and repairs not carried out, newer ones have also not been built. The result: last week’s deluge, when nearly 1,000 mm of rainfall was recorded in a 24-hour span in the suburbs, crippled life in the metropolis. Of course, Chief Minister Vilasrao Deshmukh tried to defend the indefensible, claiming that the system was meant to handle a downpour of a little under 400 mm a day, and officials could not be blamed for the 48-hour crisis in the city.
Municipal and railway officials are supposed to ensure that the storm water drains are cleared of all the debris before the onset of the monsoon, and also during the four-month rainy season. Encroachments on public land – promoted by the mafia in league with some officials – have resulted in massive slum colonies coming up along railway tracks and highways, and much of the waste from these shanties is dumped into the drains, preventing rainwater from flowing into the sea, and resulting in water logging.
The Maharashtra government had a few years ago set up a crisis management group, comprising top bureaucrats, police officials, municipal officials, and railway executives, to handle such a crisis. However, the group – instead of adhering to the standard response mechanisms to such crisis – has always failed in tackling these disasters. Post-disaster meetings only result in sermons, and effective measures to lessen the impact of the crisis are never dealt with.
For 48 hours beginning Tuesday last, India’s financial and commercial capital, which boasts of being the financial hub of Asia and wants to replicate the success of Shanghai, was cut off from the rest of the nation and the world. Millions of commuters were stranded in the island city, unable to return home, while motorists had to abandon their cars in the middle of roads, or sleep inside their vehicles. Commuters were also huddled inside buses and trains for as long as 24 hours, stranded in the middle of vast lakes. In some areas, the water had risen 10 feet above the ground, entering homes and offices.
Entire localities in the suburbs, especially fast-growing ones that have seen numerous new developments – including construction of five-star hotels, shopping malls, and residential and commercial towers – were inundated with floodwaters, as the drains were either choked up, or were non-existent.
Over 300 people died in Mumbai following the downpour and the loss of property is estimated to run into tens of billions of rupees. But there was a total breakdown of the administration, with virtually no senior leader or politician directing the bureaucrats and officials to rush in with emergency aid and relief.
The chief minister requested the help of the armed forces only 24 hours after the city’s transportation, telecommunications and power networks collapsed. Fortunately, thousands of volunteers in different localities offered their services to commuters who had to trudge through waist- and even neck- deep waters for hours at a stretch.
The city’s airport, the busiest in the country, was also flooded with water, and sophisticated landing equipment was rendered useless. Thousands of passengers – both domestic and international – had to take refuge in the tottering terminals, where even basic facilities like clean toilets are lacking.
Unfortunately, last week’s disaster is unlikely to have any salutary effect on the decision-making process or on decision-makers, as politicians will indulge in their favourite hobby, of passing the buck.
IN contrast, the other disaster to hit Mumbai last week was handled more professionally and efficiently by all involved in the operation. The fire that raged through a huge production platform of ONGC Ltd (formerly Oil and Natural Gas Commission), a state-controlled energy behemoth, was put out within a few hours, and all but a score of the nearly 400 personnel on board were rescued from the rough seas.
Rescue teams from the Indian Navy, the Coast Guard and ONGC were involved in the operation, and a fleet of helicopters and vessels were rushed to the site, about 160 km south-west of Mumbai in the Arabian Sea, to rescue the personnel. The accident happened after a support vessel rammed into the production platform while evacuating an ailing employee.
This resulted in an explosion and the consequent blaze ripped through the platform, destroying it, the support vessel and a helicopter on Bombay High North (BHN). The ONGC platform accounts for over 100,000 barrels per day of crude, which is around 17 per cent of the giant’s total production.
According to Petroleum Minister Mani Shankar Aiyar, the accident – one of the biggest losses suffered by ONGC – would not affect India’s energy security. Seventy per cent of the production on BHN would be restored in about a month, he says. India plans to cover up the shortfall in its domestic production, caused by the BHN disaster, by importing more fuel.
Thanks to the global rise in oil prices, ONGC’s net profit zoomed by nearly 45 per cent to Rs33.19 billion for the quarter ended June 30. But because of the still convoluted energy-pricing policies in India, ONGC had to shell out about Rs28.76 billion from its total profits to a pool that funds oil marketing firms who are forced to subsidise LPG (liquefied petroleum gas) and kerosene, allegedly for the benefit of the poor.
ONGC’s crude production during the quarter was marginally down at 6.5 million tons, and natural gas production was 5.7 billion cubic metres. Total income amounted to Rs111.68 billion. The state-owned oil giant, worried over stagnating oil and gas reserves, is planning an ambitious diversification programme, which would see it enter the high-growth power and petrochemicals sectors.
The government of the southern state of Karnataka was keen that ONGC chip in with a whopping Rs210 billion to fund four projects in the coastal city of Mangalore, where ONGC’s subsidiary, MRPL, operates a refinery. Despite resistance from the petroleum ministry, the Indian government has given the go-ahead for ONGC’s plans to invest in a petrochemicals and aromatic plant, an LNG (liquefied natural gas)-based power plant, an LNG terminal, and a gas transportation pipeline project in Mangalore.
The oil giant will also co-promote a Special Economic Zone in Mangalore, together with the state government, to trigger off development in the port city.
LAND prices in Mumbai are zooming, as developers pick up prime property in the heart of the city, hoping to encash on the retail revolution that, it is hoped, will sweep across this metropolis of 15 million residents.
Interestingly, the key players involved in the latest land deal are two prominent politicians from the right-wing Hindu party, the Shiv Sena. Incidentally, the party was opposed to the sale of land owned by textile mills, but its two leaders have just gone and won an auction by state-owned National Textile Corporation (NTC) for a sprawling five-acre piece of land in central Mumbai.
A company owned by the son of Manohar Joshi, the former Speaker of the Lok Sabha (the lower house of the Indian Parliament), and another owned by Raj Thackeray, the nephew of Bal Thackeray, the founder of the Shiv Sena, acquired the Kohinoor Mills for a hefty Rs4.21 billion.
Both politicians-turned-entrepreneurs aim to develop an up-market shopping mall, a luxury hotel, and fancy retail outlets at the textile mill. Mumbai, once known as the Manchester of the East, has seen the steady decline of its textile industry over the past quarter century.
The industry once employed 200,000 labourers, almost all of who have lost their jobs. The 60-odd mills, however, sit on 600 acres of prime property in the heart of the city, and builders have been eying it for long. Environmentalists and urban planners have been opposed to the sale of land to developers, and have sought planned development in the area.
However, politicians have been eager to parcel off the land to developers, and in recent months they have succeeded court battles with opponents. NTC, which was forced to take over many of the sick and loss-making textile mills, has earned handsomely following the sale of some mills.
It sold off Mumbai Mills, which has 17 acres of land, to a Delhi developer for an unbelievable Rs7 billion. Last fortnight’s sale to the two Sena leaders was the highest price it fetched in terms of per acre value.
Of course, the Reserve Bank of India, the country’s central bank, has warned banks to reduce their exposure to the real estate industry, fearing speculators would ratchet up prices leading to a bubble. It has recently increased the risk weightage for lending to developers. Many banks have been growing their real estate portfolios, expanding their exposure to the volatile sector.
Developers like Niranjan Hiranandani, a leading property developer, have been warning that the fancy prices being paid for mill lands is fuelling speculation. He welcomes the RBI’s moves, as it would keep a check on the industry.
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