Monday, July 18, 2011

Diamond market reopens after blast

Traders may shift to new diamond bourse in a year

Nearly five days after Wednesday's triple blasts here, the diamond market resumed functioning on Monday after the police opened the blast-hit road which had been cordoned off immediately after one of the bombs exploded near Opera House here on Wednesday evening.

A walk through the always-crowded road indicated two differences post-blast: no two-wheelers were seen parked on the sides of the road, the small vendors were missing in action.

“Madam, please look at the camera,” a receptionist sitting at the entrance of Pancharatna building, one of the many buildings which houses diamond merchants' offices, told me. Jutting one hand out of her small wooden cabin, she pointed towards a small camera and turned it towards me. The other hand continued entering the details of my identity card in her database. The security had been beefed up after the blast.

“This was always there, but the entry in the database was not so strictly followed,” a diamond trader said. “From now on only those persons will be given entry in the building who have some valid identification or who have offices there or who are the members of the association,” Arvind Shah, Mumbai Diamond Merchants' Association Secretary told The Hindu on Monday.

He said that the security measures on the roads aligning the diamond merchants' offices needed upgrading. “It is the police who are not doing their work well. Parking should not be allowed in these lanes, the small vendors should be obstructed from coming. We have now decided to install many more CCTV cameras in the area,” he said.

Rs. 900-crore loss

Mumbai diamond market is one of the largest diamond markets. The estimated loss arising from the three days last week when the market was closed is pegged at around Rs.900 crore. “The daily business is around Rs.300 crore. So you calculate how much loss the market suffered when it was closed for three days,” Mr. Arvind said.

Though the market was said to have completely opened on Monday, business was not as usual. “Many have opened their offices for the first time after the blasts. They are still cleaning the offices, taking stock of their losses. But both the safety vaults have opened today,” Maneesh Shah, a diamond broker, said.

“It will take some more days before normal trading activities resume,” he said. Merchants said that around 20-25 per cent of the market started functioning on Monday.

But the fear of security still looms large. Many of the diamond merchants are now seriously considering shifting their offices to the Bharat Diamond Bourse at the Bandra-Kurla Complex (BKC), nearly 15 km from the current location.

“This place is chock-a-block full. We are scared for our security. This place has too many entry and exit points. What all will the police or the security secure?” Rajendra Shah, another diamond trader said.

“Many traders will shift there this Diwali,” Mr. Arvind said. “Within one year, we will all shift there.”

But many diamond brokers and members of the association were sceptical about it. “There are 4,000 offices here. The Bharat Diamond Bourse has only 2,200 offices. What will happen to the rest of the merchants?” wondered Rajendra Shah, who has been a diamond merchant for more than 20 years.

“Very risky”

That does not seem to be the only problem. Even security is an issue — not of the bourse, but of the access road towards the bourse. “The approach road and the area is so lonely! We carry so much risk on ourselves [referring to diamonds]. It is very risky to go in that area,” Shailendra Seth, a diamond broker, said. His family members too expressed apprehensions about shifting there.

“But eventually, if the big traders shift there, we will have to move with them,” Mr. Maneesh said.

Mr. Rajendra pointed out that the security inside the bourse was impeccable. “Once you go in, you don't have to come out for anything. The security vaults are inside, there is bank, courier. They check your identification to let you in. Once you are in, you don't need to bother about anything. That is not the case here. We have to go to various places for one deal. Risk utna badhta hai na! [The risk increases so much]. The government should make infrastructure and transport available there, so that commuting does not remain that risky.

But there is lot of scepticism surrounding the BKC premises. “This project was started in 1992. The possession was to be handed over in 1996. Ask those who constructed the bourse, what took them so long? 85 per cent of the work was over by 1997. Why did it take 14 more years to complete the rest of the 15 per cent work? They have been extending the time of the project and the costs have escalated tremendously. Even the quality of the work is not that good there,” a member of the association said on the condition of anonymity. He himself owns an office there and said he was unhappy about the state of affairs.

After the blasts, there were talks of whether some of the diamond merchants may think of shifting to Surat, another diamond hub, in Gujarat.

“Trade will not shift”

But Hardik Hundiya, a diamond expert, said that though there were lot of risks here, the diamond trade would not shift out of Mumbai. “There were talks that it may shift to Surat. But Mumbai is very well-connected. It is a central location with very good facilities and infrastructure. If a big buyer has to come, there is good flight connectivity to Mumbai, the hotels here are good. The trade will not shift out of the city,” he said.

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