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World’s largest blackout casts shadow over India’s global business

An Indian barber, holding a candle, gives a customer a haircut at his shop in Kolkata, India, on Tuesday after a massive collapse of three of the nation’s regional power grids.

Bikas Das/Associated Press

While out on his expansive blueberry fields near Abbotsford, B.C., this week, Jatinder Sidhu has been glued to his iPod, tracking the blackout in India and how much it's costing him.

A power failure in northern India left about 650 million people – about 100 million more than the total population of North America – without electricity on Tuesday. It was the second massive outage in as many days.

Mr. Sidhu, owner of the agricultural firm Greenvale Enterprises, ships 3,600 to 4,500  kilograms of blueberries to a nearby packer who then sends them on to India each day. At peak season, he should be getting $3.30 per kilo on his "fancy grade" berries.

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But this week, he received only half that top price because his shipper couldn't land the berries in India, and instead had to sell them as "juice grade."

"Since there's no power, they can't take the product out of the airplane and put them into their refrigerators," he said. "The way I see it, I'm losing 50 per cent on my product every day."

Mr. Sidhu should be able to relax a little since Indian authorities resumed power late Tuesday throughout much of the country that was left in the dark earlier when a cascading failure brought the northern half of the country to a standstill. But the two-day power failure is stark reminder that, despite India's enviable growth record, it remains a challenging place to do business.

Lawyer Puneet Kohli, of Brampton, Ont., has a number of Canadian clients who have commercial interests in India. For the most part, they easily coped with a lack of power for two days; in fact, they have to expect such disruptions in the chaotic, under-serviced marketplace that is India.

"I don't want to make light of it, but people see their businesses shut down for two days for festivals," said Mr. Kohli, of the firm Simmons Da Silva & Sinton LLP and board member at the Indo-Canadian Chamber of Commerce in Toronto.

"People are aware of the infrastructure issues there and I'd be surprised if anyone is taken aback by it. You've got to go with the flow."

India is renowned as an outsourcing destination for the information technology and customer service industries; Canadians banks, airlines and cable companies have operations there. But there have been few reports of disruptions.

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The Confederation of Indian Industry said the two outages cost businesses hundreds of millions of dollars, though they did not affect the financial centre of Mumbai and the global outsourcing powerhouses of Bangalore and Hyderabad in the south.

The Royal Bank of Canada has an office in Mumbai that services local financial institutions and had no reports of problems. Air Canada has a call centre for baggage-claim problems in western India, which was unaffected by the blackout and, in any case, has backup power.

In fact, many business and even upper-middle class families have emergency generators because the public power system is unreliable. "Everyone I know there has generators in the houses," said Renu Mehta, a communications consultant in Toronto.

With a report from Associated Press

WORLD'S WORST POWER OUTAGES

July 31, 2012: Three power grids across half of India fail in what authorities call an overdrawing of the system, leaving about 650 million people without power for several hours and raising serious concerns about whether the country's outdated infrastructure can meet soaring demands.

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July 30, 2012: India's northern electricity grid fails for much of the day, leaving 370 million people without power.

Nov. 10, 2009: Storms near the Itaipu hydroelectric dam on the Paraguay-Brazil border are tentatively blamed for outages that cut power to as many as 60 million people in Brazil for two to three hours. The entire nation of Paraguay, population seven million, is also briefly blacked out.

January-February, 2008: Winter storms cause a nearly two-week blackout to about four million people around the central Chinese city of Chenzhou. Eleven technicians reportedly die trying to restore power.

Nov. 4, 2006: A German power company switches off a high-voltage line over a river to let a cruise ship pass. It triggers outages for 10 million people in Germany, France, Italy and Spain.

Aug. 18, 2005: An imbalanced power grid kicks power plants offline in Indonesia and leaves almost 100 million people in the dark, many for more than five hours.

July 12, 2004: Heavy use of air conditioners and other factors are blamed for blackouts affecting at least seven million people in Greece just a month before the Olympic Games.

Sept. 28, 2003: A short in a power line in Switzerland leads to blackouts affecting 95 per cent of Italy. About 55 million people are without power for as long as 18 hours.

Aug. 14, 2003: Power-line problems in the U.S. Midwest trigger a cascade of breakdowns that cut power to more than 50 million people in Ontario and eight U.S. states, some for more than a day.

March 11, 1999: Lightning hits a power substation in Brazil's Sao Paulo state, leaving 97 million people without power for as long as five hours. An official says it is linked to transmission lines from the Itaipu dam.

March, 1989: A solar geomagnetic storm knocks out power to six million people in Quebec and parts of the U.S. for nine hours.

July 13, 1977: A lightning bolt knocks out electricity to about eight million people in New York City. Power isn't fully restored until 25 hours later after widespread looting.

Nov. 9, 1965: A faulty substation relay darkens parts of Ontario and seven northeast states for about 14 hours. Power is out for 25 million people.

Associated Press

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About the Authors
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

Dakshana Bascaramurty is a national news reporter who writes about race and ethnicity. She won a 2013 National Newspaper Award in beat reporting for her coverage of changing demographics in the 905 region. Previously, she was a feature writer for Globe Life. More

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