Jaipur blaze challenges oil priorities
By Raja Murthy
MUMBAI - The 50th anniversary celebrations of Indian Oil Corp (IOC), India's
largest commercial enterprise, have become a blazing funeral with the
devastating week-long inferno at its oil depot in Jaipur, the famed "Pink City"
in northwestern India.
India's worst oil fire disaster has not only had the IOC golden jubilee
birthday cake candles turning into fatal dynamite sticks, but again roused
worldwide safety questions about locating industrial and residential areas near
large oil storage facilities. "Big Oil" corporations can breed big fears.
An estimated 12 people died and more than 150 were injured in the oil fire that
blazed from the night of October 29, 20 kilometers from Jaipur, the capital of
India's largest state, Rajasthan, which
has a population of three million.
The disaster could have been worse. The IOC storage tanks at 7.15 pm when the
fire started were only half-filled. The cause of the fire is yet to be
established, though a leakage in one of the storage tanks looms as a prime
suspect. A government investigation is underway.
Beyond the immediate destruction - IOC has lost US$300 million in destroyed
infrastructure, equipment and 50,000 kiloliters of burnt oil, executive
director, N Srikumar, told Asia Times Online. The fire damage has reached far
into the regional economy; 450 of the approximate 1,000 factories in the
Sitapura industrial area have either suffered extensive damage or have been
gutted. Estimated losses could cross $200 million. Victims including exporters
have had their businesses burnt out in a night.
Srikumar said the fire had been fully put out, but Indian media sources
reported four of the 11 depots continuing to blaze as of November 3 evening,
the sixth day into the disaster.
IOC, one of Asia's oil giants, can brace itself for painful months ahead.
Calling itself India's "flagship oil company", it reported sales of $60.65
billion for 2008-09, a record for an Indian company.
With legal bills and police complaints of criminal negligence already being
filed by fire victims in Jaipur, IOC may have its net profit of $627 million
and its reputation dented. Not quite the 50th anniversary it would have hoped
for.
Petroleum Minister Murli Deora called a meeting of leading international and
Indian oil companies on November 3. Multinationals such as Royal Dutch Shell,
Cairn and British Gas were invited to share their expertise on the safety
measures they employ to protect their volatile properties.
IOC is one of 14 state-owned petroleum-related companies, others including
Hindustan Petroleum, Oil & Natural Gas Corp and Bharat Petroleum.
Petroleum is often a controversial subject in India, with retail petrol prices
and civil aviation fuel in the country among the highest in the world. But the
Jaipur fire has stretched controversy, with questions even being raised about
the safety of petrol pumps located within the city. More pertinent would be the
question of locating oil storage depots near population centers.
"Population growth near the oil depot is a factor beyond our control," said
Srikumar. "For instance, when we started this storage facility 20 kilometers
from Jaipur, it was on barren land. But schools, hospitals, factories and
residential areas began developing in surrounding land in following years."
While IOC officials face criminal charges on an alleged shortfall in safety and
accident management, Srikumar may have a valid point that city administrators
have been negligent in allowing industrial and residential growth near oil
storage depots.
The Jaipur fire has its antecedents overseas, most recently a major oil fire
that raged for two days in Puerto Rico last month. The Caribbean Petroleum
Corporation lost 18 storage tanks of the 40 it owned near the capital San Juan.
Local governor Luis Fortuno and US President Barack Obama declared the accident
an emergency in calling for relief operations.
In Jaipur, two gigantic pillars of thick black smoke were steadily climbing
into the evening sky over the Pink City when this correspondent was at the
scene on October 31.
A Jaipur resident, Ranjit Singh, told Asia Times Online that people in the
surrounding area were being evacuated after the fire started. "Initially, there
were fears that the city could be affected as the oil depots were close."
Residents 15km from the IOC depot reported hearing explosions, and buildings as
far away as 2km had glass panes shattered.
Even so, there was remarkable calm on the evening of October 31, with gardeners
unconcernedly attending to lawns against a backdrop of gigantic plinths of
thick black smoke. There was no undue fuss at centers such as the Narayan Singh
Circle, a popular boarding point for buses to New Delhi, 250km away. Jaipur's
airport continued to work without a hiccup, although dense clouds of smog
cloaked aircraft flying over Jaipur on the New Delhi-Mumbai route.
Business entities in Jaipur such as hotels that have had premises destroyed
have threatened to file police complaints against IOC company officials on
charges of criminal negligence.
Owners of the Ayush International hotel near Jaipur say they lost $425,000 in
property damaged in the fire. They allege IOC officials failed to sound the
alert even after the fumes of the leaking oil could be smelt for kilometers
around. IOC corporate lawyers and their insurance agents can forget about
holidays for the rest of the year.
Tourism industry professionals have reason to get into a flap as Jaipur and
Rajasthan are popular destinations in India's $27-billion annual tourist
business. The fire happened in the middle of the famous Pushkar camel fair in
Rajasthan, which runs from October 25 to November 2. The only one of its kind
in the world, the fair draws hundreds of thousands of local and international
visitors.
Ironically, IOC has said it is investing $10.8 billion between 2007-2012 in
"augmentation of refining and pipeline capacities, expansion of marketing
infrastructure and product quality upgradation as well as in integration and
diversification projects".
Additional money could be spent on the public face of crisis management. IOC's
corporate website, for instance, splashed a lead item banner note on the
company posting a $60.15 million profit for the second quarter for the year
2009-10. Not a word on the ongoing fire disaster, not a syllable of condolence
expressed for lives lost, including those of Indian oil employees.
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