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VISHAKAPATNAM, India-Damage to an Indian oil refinery from an explosion and fire last week could reach as high as $27.8 million, investigators say.
The Sept. 14 explosion at the Hindustan Petroleum Corporation Ltd. refinery in the port city of Vishakapatnam killed at least 55 workers and seriously injured at least 10 people.
"Destruction of life, infrastructure, and product was extensive," said Sudeep Ghose, chief general manager of HPCL in Hyderabad, India. The dead only include HPCL employees or employees of contractors working on the premises, including seven security personnel.
Mr. Ghose indicated that, by conservative estimates, HPCL's infrastructure loss at the refinery is an estimated 500 million rupees ($13.9 million) and product losses at an estimated 200 million rupees ($5.6 million).
An investigative team, however, said late last week that the losses could be as high as 1 billion rupees ($27.8 million). The team will investigate the cause of the blast and whether there was any negligence.
Information on HPCL's property and casualty insurance was unavailable last week.
Nine tanks, varying in capacity from 520,000 to 1.3 million gallons and containing assorted fuels, were destroyed. The exact quantity of fuel lost remains undetermined, as the tanks were filled to varying levels.
The blast and resulting fire are being blamed on a leak in an LPG pipeline carrying gas from a tanker in the port to the refinery.
According to Mr. Ghose, HPCL would financially compensate the families of the dead and injured employees for the disaster.
"We will give 200,000 rupees ($5,555.55) per casualty, plus 10,000 rupees ($277.77) for cremation expenses. Also, the company will bear the full costs of treatment and hospitalization for those injured," he said. "Furthermore, the state government has appealed that the injured also be paid compensation. The HPCL management is still considering this request."
The Chief Minister of Andhra Pradesh state, Chandrababu Naidu, announced the state's intention to provide interim ex gratia payments of 150,000 rupees ($4,166.66) to each of the victims' families. He also said compensation would be given for the loss of any private property as a result of the fire.
Compensation also may be available under India's landmark Public Liability Insurance Act, passed in 1991. It was enacted after the Bhopal tragedy heightened public awareness of "the duties of establishments handling hazardous substances towards third parties."
"The act provides for payment of immediate relief to the victims on a 'no fault basis,'*" said M.V. Purohit, general manager-technical of General Insurance Corp. of India, which wrote accident insurance for HPCL employees.
According to A.J. Rego, safety engineer and ex-joint director of the National Safety Council of Bombay, the Public Liability Insurance Act "is admirable because it clearly states that it gives interim compensation and does not preclude workers from claiming compensation via a civil suit."
A statement from Mr. Ghose noted HPCL is not covered under this act.
HPCL says it has already formulated a contingency plan to continue distributing fuel, without further disruption.