Flooding in Tronica City: Unit owners to bear huge indirect losses as industries department estimate only ₹30 crore

The district industries department received an assessment of approximately 250 units, estimating the losses at ₹30.02 crore. This estimation stands in stark contrast to the previous estimate of about ₹500 crore put forth by the industrial associations

Industrial units in Loni’s Tronica City, affected by flooding after the breach of the Alipur embankment on July 13, may only receive compensation for “direct losses”, leaving them responsible for other losses over an extended period, officials aware of the matter said.

A basement unit in Tronica City was damaged by the flood waters on Tuesday in Ghaziabad. (Sakib Ali/HT Photo)

The Alipur embankment breach caused extensive flooding in various villages, localities, and the Tronica City industrial area.

Tronica City’s industrial area, developed by the Uttar Pradesh State Industrial Development Authority (UPSIDA), encompasses around 2,300 diverse units spread over approximately 1,700 acres, according to UPSIDA officials. In the aftermath of the flooding, the district industries department conducted a physical assessment at Tronica City to gauge the extent of the damage.

The district industries department received an assessment of approximately 250 units, estimating the losses at ₹30.02 crore. This estimation stands in stark contrast to the previous estimate of about ₹500 crore put forth by the industrial associations.

“The assessment covered three direct components: damage to buildings ( ₹1.71 crore), plant and machinery ( ₹8.04 crore), and stocks, including raw materials and finished goods ( ₹20.26 crore). No indirect losses were considered,” said Srinath Paswan, the deputy commissioner of the Ghaziabad district industry department, adding that the department lacks the technical expertise for a comprehensive assessment.

The industries associations said that a lower loss assessment is due to fact that many unit owners have not come forward to submit their assessment.

“We are now making a last call to unit owners to submit their loss assessment else we will send the final survey report to the state government to take a call on the compensation issue. The indirect losses have not been accounted for in our assessment survey,” Paswan added.

He also said that losses incurred by these units are expected to be substantial, as they may include expenses due to power outages, unfulfilled orders, shutdowns caused by flooding, costs for resuming plant and machinery operations, and daily operating expenses. Moreover, the reduced availability of workers added to the challenges faced by the affected industrial units.

The industrial associations expressed their concerns over the lower loss assessment, attributing it to some unit owners’ reluctance to submit their assessments.

“We estimated that approximately 300-400 units were directly impacted by the flooding, while numerous others experienced indirect losses due to power outages and order delays. Such issues and their after effects are indirect losses to the units which are not accounted for in the assessment done by the industries department. Such losses must be huge, and the owners must bear these losses in long run,” Rakesh Aneja, chairman of the Indian Industries Association (Ghaziabad chapter).

To address these issues, the IIA officials called out to unit owners to promptly submit their assessments and participate in resolving the compensation matter with the state government.

“Many unit owners have not come forward so far as they may have not assessed their losses so far or may be focusing on resuming their units on priority. They must come forward so that we pursue their issues up to the state government level,” Aneja added.

Rahul Tyagi, a bag manufacturer whose unit was located in a Tronica City basement, bore substantial losses as a result of the flooding.

“I have now shifted to a new building after the flooding and am trying to resume operation at the new site. I am not aware of any compensation scheme till now. My loss on account of damage to machinery and material is about ₹30-40 lakhs and I know that I will have to bear its aftereffects for months,” Tyagi added.

The Tronica City Manufacturers’ Association raised concerns about the district industries department’s survey, claiming that only about 10% of the units in Tronica City were assessed.

“According to our estimation, the losses suffered by affected units may still amount to around ₹300-400 crore, considering approximately 600-700 units were impacted. The association seeks clarification on the assessment’s basis and demands information about the compensation timeline for the affected unit owners. They also emphasize the importance of unit owners actively participating in the assessment process to address their issues effectively at the state government level,” said Anil Kumar, general secretary, Tronica City Manufacturers’ Association.

Meanwhile, some manufacturers are still going through a hard time, as their unit faces heavy seepage of water.

“There is heavy seepage of water inside my basement unit even after more than a fortnight of flooding. It is a problem in many units operating out of the basement. My initial assessment on account of damage to stock and machines was about ₹10 lakh. Now, due to seepage, the entire floor has got damaged and I am running motor pumps regularly to flush out water. The production has ceased. Further, I am also footing other expenses and losses like payment of fixed charge of electricity which is about ₹30000 per month even if I do not use electricity. My skilled labour has run away to work elsewhere and I am unable to fulfil pending orders. All these are losses and it is estimated to be in the range of ₹25-30 lakhs,” said a ladies’ bag manufacturer who requested not to be named.