Chennai rains may have sunk businesses worth thousands of crores
Chennai’s worst floods in recorded history may have sunk business worth thousands of crores of rupees, economists said on Tuesday, as the industry started counting the losses in a city known as the hub of automobile and IT companies.
Tamil Nadu’s capital had turned into a virtual water world after the heaviest rainfall in a century led to massive flooding last week in the country’s fourth most populous city, termed a “disaster” by Union home minister Rajnath Singh.
Though an exact assessment of the losses are yet to be arrived at, two important industry bodies -- the CII and Assocham -- have estimated the losses to be in around Rs 15,000 crore due to halt in industrial production for nearly a week.
Losses of the MSMEs located in industrial estates could be around Rs 1800 crore.
Sources said insurance claims by industries for Rs 1,500 crore have already been filed and more are in the pipeline.
Industry watchers and economists expressed doubts over the fate of the Rs 2.25 lakh crore investments MoUs that chief minister J Jayalalithaa announced at the recently-held global investors’ meet after the flooding exposed the city’s poor infrastructure.
For all the strong factors used to hardsell Tamil Nadu as an investment destination, the collapse of infrastructure comes as a confidence downer for the investor, said a senior executive of an MNC who did not wish to be quoted.
Concurred Prof Ramu Manivannan of Madras University, the absence of governance is something that worries even the common man and for an investor, any doubt on the governance front would surely be a factor that is given importance in investment decisions.
“MoUs are only intent of investments, not actual investments. Let us see how much of the proposals actually come through,” said the owner of an ITeS firm that has branches in many countries.
Two-wheeler manufacturer TVS said it lost 15,000 units in production due to the shutdown. According to industry sources, the automobile sector’s losses alone could be between Rs 8000 to Rs 1,000 crore.