Reports from China

David Lammie, editor of Yangtze Transport 2008 reports through his business partner who is traveling in China that as of May 15th, roads and national highways expressways and rail tracks within Chengdu have been badly damaged. There are no train services into Chengdu as of the 15th. The 312 National Highway leading to Chengdu has been repaired (312 is a 3,000- mile highway connecting Shanghai with Xinjiang). Some other roads leading to the disaster area have also been repaired. Relief has been able to be trucked in, but bad weather hampered the air drop of communication equipment. The routes to Chongqing have not been affected.

Toyota Motor Company, which operates a manufacturing plant in Chengdu offered the following statement:
Although we are unable to provide details regarding the current status of our suppliers and the state of the logistics infrastructure, I hope you will find the following update of some reference.

Regarding the production-stoppage situation, we have decided to extend the suspension of production at our Sichuan operation today (May 15), as well, for both the first and second shifts. As of the end of what would have been the second shift of May 14, the stoppage has affected the production of 200 vehicles. Regarding production on May 16, we intend to make a decision on May 16.

Our utmost concern at the moment is respect for life. Although we have been able to confirm the well-being of our employees at our Sichuan operation, we are still in the process of checking on the well-being of the employees of related companies, including suppliers, etc. At the same time, we are, and will continue, doing what we can to support disaster recovery efforts. To this end, we have provided 10 million yuan ($1.43 million) and 10 Land Cruiser Prados through a local NPO.

Within our plant, the safety of our employees is top priority. We are currently inspecting a crack in the paint line to determine whether safety requirements can be satisfactorily met and to determine whether the damage will have an effect on our production quality. In relation to quality, we also need more time to check on whether our various production-process inspection apparatus can perform accurately within the required range of preciseness. We will not attempt to resume production until we are fully confident when it comes to both the safety of our workers and the maintenance of our quality.

Another requirement for resuming production (as you are well aware) is the status of our suppliers and the state of the logistics infrastructure. Regarding both, all we can say at this point is that there are still numerous elements that we need to survey and inspect. We can provide no details on this broader aspect of our production operations.

In other reports, the China National Petroleum Corp. had reopened a petroleum products pipeline that supplies oil products to Sichuan and central China. The pipeline linking Lanzhou Petrochemical Corp., in northwestern China’s Gansu province, and Sichuan had been closed down until it examined for damage.

Sichuan has no major refineries. Petroleum products are supplied to the region through PetroChina’s 1,240-km pipeline.

In another report, the earthquake damaged a rail link between Shaanxi and Chengdu, derailing a cargo train. The fuel being carried on the train burst into flames, but no casualties were reported.

The China Oil and Gas Monitor also reported that PetroChina and Sinopec had arranged oil transportation by truck, but landslides had blocked roads to the affected areas and most of the access routes had been closed, making such deliveries highly difficult.

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