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Volume 27, Issue 3

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October 29, 2007

The Worst Disaster in Recent History

Written by  Barney F. Pelant, Barney F. Pelant & Associates
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Trends may start on the east and west coasts (i.e. Hurricane Hugo and the Loma Prieta Earthquake of 1989) in our country, but when it comes to doing it bigger and better, don't count out the midwest. On Monday, April 13, 1992 began what has become the biggest business disaster to face us yet.

The story began last year when contractor Great Lakes Dredge & Dock Company of Oak Brook, Illinois installed new pilings around the Kinzie Street Bridge along a branch of the Chicago river that wraps around downtown Chicago. Speculation is that the new pilings, which were driven down into the muddy depths of the river at an unapproved location, ruptured a turn-of-the-century tunnel system. Investigation of the causes will continue for months.

The 62 mile tunnel system was built to support rail and coal supplies to the many buildings of the city. Today the tunnel is used to distribute various cable systems, however the older buildings of Chicago have bulkheads accessing the system.

On January 14, 1992, two cable workers from Chicago Cable Television came across the visible cave-in that was occurring in the tunnel at the Kinzie Street Bridge. The concrete was breaking away and mud and silt were coming through the openings. They recorded this on video and attempted to get through the bureaucratic offices of the city to notify the Department of General Services.

The cost to repair the cracked opening was estimated by city officials at around $10,000, but actual repair bids exceeded that amount. Consequently, additional estimates were being requested, and ironically, a meeting to review what should be done was reportedly scheduled to take place a day after the tunnel ruptured.

Days after the disaster struck, the city remained crippled by the slow process of draining millions of gallons of water from the tunnel system and two to three stories of basements that support many of the high-rise buildings in the city. It is here that we find the power distribution, cooling and boiler plants essential to the functioning of the buildings. Tons of materials, including broken concrete, mattresses, gravel and "rapid set" concrete have been dumped into the river atop the opening to try to stop the flow of water. But all of this was of little help, as the water continued to rise in the buildings. The city was declared a federal disaster area as federal, state and local officials are working feverishly to solve the problem.

For the many businesses in the downtown area with major corporate computer centers, it brought the biggest declaration of disasters yet to hotsite recovery vendors.

This was the largest disaster ever for Sungard Recovery Services, which had its first declaration of disaster at 7:30 a.m. on Monday. Seventeen Sungard customers were affected.

The greatest financial impact was felt by the Chicago Board of Trade, which shut down completely on Monday, and resumed trading only at small volume in subsequent days. An estimated 25 billion in trading of the 36 products handled by the CBOT were lost on Tuesday, before limited trading was re-instated on Wednesday.

Although CBOT still had water cascading into its basements on Thursday, it was conducting limited trading with darkened corridors and a limited number of elevators and computers. This impact was felt world wide.

The biggest financial issue yet may be insurance, as this is not being considered an “act of God” flood, eliminating coverage for many organizations. Estimates are ranging in the $100's of millions in losses.

Business recovery centers like MEDS in Chicago were in immediate use as emergency operations centers for key operations. On Thursday, McCormick Place, one of Chicago's largest conference centers, offered its entire conference space for one month as a free business recovery center for affected businesses.

The Chicago Transit Authority transit system of subways that support the city have been closed down, with re-activation not expected for weeks. A parking ban was placed on the entire downtown area to allow the access needed by the many emergency vehicles being used to provide temporary power, and to pump out water into the storm drains.

Several city blocks went without power for the first couple of days, however by systematically cutting off the circuits to the flooded buildings, other buildings have been brought up. Two of Chicago's largest department stores, Carson Pirie Scott and Marshall Field's were both affected. The 3,000 hourly employees at Field's and the 2,000 at Carson's were paid for work on Monday if they were scheduled to work, but won't return to the payrolls until the stores reopen. Employees at Filene's Basement have been laid off until the store reopens.

The recovery in Chicago will be tentative for a long time to come. Simply stopping the flow of water has been a major engineering challenge, and removing water from the tunnels and basements has stopped until the primary problem can be resolved. Complete blocking of the ruptured tunnels may take 10 days from the initial disaster, and draining the tunnels will probably take an additional two weeks.


This article adapted from Vol. 5 #2.

Read 1850 times Last modified on October 11, 2012