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Thursday, September 24, 2015

Tianjin explosions - after more than a month, more information trickles

Tianjin  is a metropolis in northern China and one of the five national central cities of the People's Republic of China (PRC). It is governed as one of the four direct-controlled municipalities of the PRC, and is thus under direct administration of the central government.  The land where Tianjin is located today was created in ancient times by sedimentation of various rivers entering the sea at Bohai Gulf, including the Yellow River which entered the sea in this area at one point.  There are diverse viewpoints for the origin of the name, "Tianjin". One version states that "Tianjin" as a word initially appeared in the poems of Qu Yuan, a famous patriotic poet of Chu State in the Warring States period.

We have been reading more about Tianjin, due to the series of explosions that killed over one hundred people and injured hundreds of others that  occurred at a container storage station at the Port of Tianjin on 12th August 2015. The first two explosions occurred within 30 seconds of each other at the facility, which is located in the Binhai New Area of Tianjin, China. Fires caused by the initial explosions continued to burn uncontrolled throughout the weekend, repeatedly causing secondary explosions, with eight additional explosions.  The cause of the explosions was not immediately known,  but Chinese state media reported that at least the initial blast was from unknown hazardous materials in shipping containers at a plant warehouse owned by Ruihai Logistics, a firm specializing in handling hazardous materials.

Tianjin Dongjiang Port Ruihai International Logistics is a privately held logistics firm that  handles hazardous chemicals within the Port of Tianjin, such as compressed air, flammable and corrosive substances, oxidizing agents, and toxic chemicals.  There are some reports that the licence had expired a couple of months earlier.  A report in South China Morning Post states that investigations into the blast have uncovered evidence of corruption and dereliction of duty on behalf of officials. Those found responsible of such wrongdoing would be held fully accountable, whoever they were, Premier Li Keqiang  is quoted as stating  after hearing from the investigation panel.  “Blood should not be shed in vain.” Various departments should learn from the accident and improve industrial safety, he added.

In a rare move, the investigation panel is being headed by the Ministry of Public Security – usually such panels are headed by the State Administration of Work Safety.  Li’s remarks, which came more than a month since the explosions on August 12, coincided with an announcement by local government of compensation plans for homeowners living near the site. However, may of the residents say the plans will not be enough to get their lives back on track. About a week after the blasts the government agreed to buy back about 10,000 homes following repeated protests by owners who blamed lax regulations for their loss. In defiance of the official compensation plans, some owners sealed their buildings and now guard the gates. Some would fight it employing lawyers, while some tired of the negotiations, are ready to accept the deals.

In another news, it is reported that a Chinese firefighter, who slipped into coma after receiving serious injuries in the country's worst industrial disaster at Tianjin port, regained consciousness 40 days after the incident. Zhang Chaofang, 19, recovering at Tianjin First Center Hospital is now able to speak, his doctor Gao Hongmei said.

He was comatose when transferred to the intensive care unit of the hospital on August 13, he suffered extensive burns, traumatic brain injuries, respiratory failure, as well as kidney and liver damage, Gao added. Zhang received four skin graft operations and all the grafted skin has survived, Gao said.  It is reported that on Sept 17,  tears were spotted dripping down his cheek after his mother called his name. The next day, his hand moved, attempting to touch his mother's face.

The blasts which rocked where house at the port city is also disastrous for the country's firefighting unit as 104 firemen were killed besides 11 police officers and 55 civilians. Sad indeed.   

British Press report that Insurer RSA has been left out in the cold by its larger rival Zurich Insurance, which suddenly pulled out of a £5.6bn bid and revealed it faces hefty losses caused by last month’s explosions at the Chinese port of Tianjin. Zurich took the blame for the collapse of the talks the day before it was due to table a formal offer, causing a 21% fall in RSA’s share price. As well as citing a $275m (£175m) of losses caused by the industrial accident in Tianjin last month, it outlined problems in its US car insurance arm rather than the discovery of any irregularities inside RSA for abandoning the talks. While RSA responded to the unexpected announcement by stressing it was trading better than it had expected, it failed to prevent a £1bn drop in its stock market value after the 106p fall in its shares to 403p. This left the stock below where it was trading when Zurich’s interest in a takeover was first revealed in July.

Zurich’s boss Martin Senn started exploring the 550p a bid share for RSA after telling investors he had $3bn of cash to spend on deals. But he was facing tough questions after Zurich blamed the “recent deterioration in the trading performance in the group’s general insurance business” for terminating the talks with RSA just a day before required to make a bid under takeover rules. The collapse of the talks also presented a fresh challenge to Stephen Hester, the RSA boss who stood to receive £8.5m if the deal was completed after joining only18 months ago being forced out of Royal Bank of Scotland. One his first moves was tapping shareholders for £773m and shrinking the business to focus on the UK & Ireland, Scandinavia and Canada.

With regards – S. Sampathkumar

24th Sept. 2015.

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