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CHENNAI-FLOODS-INDIA
Reuters/Anindito Mukherjee
Inundated.
DROWNING

The mounting economic toll of the record rainfall in Chennai

By Itika Sharma Punit & Madhura Karnik

As the rains continue to fall on the southern Indian city of Chennai, so do the records. Dec. 3 was the wettest December day for the city in over 100 years. The weather and subsequent flooding have already claimed 270 lives, disrupted electricity and phone service in many areas, and forced the city’s airport to shut. And Chennai is expected to receive more rain over the next 48 hours.

The weeks of unprecedented rainfall have also been wreaking havoc with the local economy, which is home to outposts for multinational companies ranging from BMW and Ford Motor to Tata Consultancy Services and IBM.

Eicher Motors, the maker of Royal Enfield motorcycles, lost production of 4,000 bikes in November and has kept its factories and offices in the city closed since Dec. 1. “The floods caused by the rain have also impacted logistics and our supply chain,” the company tells Quartz. BMW, Ford, and Renault have also halted production at their factories in and around Chennai, and Reuters reports that the state-run Chennai Petroleum Corp (CPCL) has shut its 210,000 barrels per day refinery in the city’s industrial zone of Manali.

An industry lobby, Associated Chambers of Commerce of India, estimates the overall economic loss from the flooding at over Rs15,000 crore ($2.25 billion).

The Tamil Nadu capital also houses factories of Ashok Leyland, Daimler, Nissan, Natco Pharma, and TVS Motor Company. (TVS, which manufactures two- and three-wheelers, says it suffered a “sales loss of approximately 15,000 units due to the inclement weather.”)

The shutdowns and production losses have affected shares of some Chennai-based companies on domestic stock exchanges. Shares of Ashok Leyland—whose Ennore plant in Chennai accounts for 40% of its production—closed down over 1% on the BSE on Dec. 3. Shares of CPCL ended down over 5% while TVS Motors closed over 2% lower on the BSE.

Chennai is also a hub for several Indian and multinational IT companies, such as Infosys, Cognizant, and Mphasis, along with Tata and IBM. Around 400,000 people in the city work in the IT sector. But given the nature of their business, IT companies say they are successfully managing to get the work executed from other locations.

“Work on critical projects and 24/7 operations support is continuing to the best possible extent,” a Cognizant spokesperson tells Quartz. The company has activated its “business continuity plan,” under which some employees have traveled to offices in other cities to provide uninterrupted client support, the spokesperson said.

Some of the facilities at Cognizant’s delivery centre in Chennai are still operational and several employees working on critical projects are staying back at the office. The company says it is working with network providers to ensure continued connectivity at its offices.

Infosys’ Chennai campuses remained shut on Dec. 2. The company has moved some of the work that is done at Chennai to other locations. “The flooding at both campuses is under control and the water levels have started receding… we have taken necessary action to ensure client commitments are met,” an Infosys spokesperson tells Quartz.

On Dec. 3, prime minister Narendra Modi made an aerial survey of the areas affected by the incessant rains and announced an additional Rs1,000 crore ($150 million) relief fund. This is on top of the Rs940 crore that was released by the central government earlier.

Here are some scenes from Chennai during the last 24 hours:

AP Photo
People walk through a flooded street in Chennai.
AP Photo
A man carries an elderly woman as she is rescued from a flooded area in Chennai.
AP Photo
Flood affected people queue up for food in Chennai.
Atul Yadav/ Press Trust of India via AP
An aerial view of the flooded cemetery in Chennai.