Bengaluru floods: IT companies face brunt of heavy rains

Tech companies in Bengaluru are hit as water logging due to heavy rains has left employees stuck in traffic and campuses inundated. Various industry associations have called for the development of city's infrastructure. 

Areas that house most tech companies - Outer Ring Road (ORR), Sarjapur Road, Bellandur, and Whitefield - were flooded due to torrential rains in the city making commuting to work a challenge for employees.

Various companies have allowed employees to work from home, according to reports. Industry associations estimate that around 30 per cent of the total workforce had started coming back to offices after the pandemic. 

Losses mount

Companies are even suffering losses as efficiency and productivity are taking a hit. The Outer Ring Road Companies Association (ORRCA), in a letter to Karnataka Chief Minister Basavaraj Bommai mentioned that the IT companies suffered a loss of ₹225 crores on August 30 alone as their employees were stuck in traffic for around five hours. 

The ORR IT area generates revenue of $22 billion per annum (32 per cent of Bengaluru’s revenue) and is the highest tax contributor, said the association. 

Krishna Kumar Gowda, General Manager of ORRCA told BusinessLine, “The companies are set to suffer even more losses as the rains are predicted to be heavy till September 9^th. They will also have to spend money on clearing the waterlogging in the campuses.” The association has requested the government to address the infrastructure issues and take measures to clear the storm water drains in the area, he added. 

Will discuss compensation: CM

Chief Minister Bommai however has assured IT companies that a discussion will be held over the estimated loss of ₹225 crore per day. “We will call the IT companies and speak with them related to the issues that they are facing due to water logging. We’ll also discuss the compensation and other related damages that have been caused due to rain,” he said. 

Industry associations believe the collapse of infrastructure has drawn global concern about Bengaluru’s ability to handle further growth. 

BENGALURU KARNATAKA 05/09/2022 : Outer Ring Road (ORR) due to Halanayakanahalli Lake breach, after heavy rains, near Bellandur, in Bengaluru on September 05, 2022. Traffic jam up to 3kms due to water logging for about a kilometre, on both the sides. ORR houses many top IT and Multinational companies. Local residents along with cab drivers, Food delivery service workers helping people stuck in the fast flowing water, to reach safer places. Photo K MURALI KUMAR / The Hindu | Photo Credit: MURALI KUMAR K

Murali Govindarajulu, member of Whitefield Rising - an civic intiative by concerned citizens -told BusinessLine, “Companies in the area whose workforce was coming back to office have faced challenges due to the rains. Some of the campuses in the area are inundated.” 

The Peenya Industrial Area, which houses 8,500 MSMEs too has been affected. Shivakumar, Secretary of Peenya Industries Association, said, “Majority of the area is flooded, companies have stopped their functioning. The estimated loss is ₹50 crore per day, and the rain havoc is expected to go on for a week. This a huge hit to all the companies.”

Traffic moves through a water-logged road following torrential rains in Bengaluru, India, September 5, 2022. REUTERS/Samuel Rajkumar | Photo Credit: SAMUEL RAJKUMAR

Karnataka contributes over $58 billion in IT exports - 38 per cent of national exports - Bengaluru is the major contributor to the state’s export value as it is home to over 5,500 IT/ITeS companies. Infrastructure failures caused by torrential rains could negatively impact the functioning and growth of the industry.