The Bank of China is preparing to compensate its safe deposit box holders after a flood inundated its safe center at Hong Kong Plaza on Huaihai Road last month. The flood was caused by a burst in the air conditioning pipes installed in the ceiling.

Water seeped into dozens of safety deposit boxes in the center, damaging valuables, including property contracts and currencies, kept there, said the bank, which has asked the local quality inspection authorities to investigate and provide facts for judgment of which party should be responsible for the accident.

The bank, property management company of the building, air conditioner manufacturer and installation team are involved in the accident.

"Most damaged safes are near the floor while those higher up did not report losses," said Huang Chen, an official of the bank.

The boc's local branch informed customers of affected deposit boxes in the safe center soon after the flood happened.

Whilst the other involved parties declined to comment on the issue yesterday, the bank said that it plans to compensate the victims first.

"Before the final decision is announced, we will compensate renters who reported losses from the flood," said Huang.

"After the investigation, the expenditure will be paid by the entity which is regarded as being responsible for the loss," said Huang.

With extensive repair works ongoing in the center, the bank asked new applicants to go to another two of its safe centers in Hongqiao and Pudong areas.

The bank has not purchased any insurance policies covering its thousands of boxes in the city due to the difficulty for insurers in assessing the values of goods deposited.

"We have learned lessons from the flood and we have plans to insure our boxes now," added Huang.

Under global practices, all boxes for lease in banks have to be insured, said an official of the Agricultural Bank of China.

Paying an annual fee of between 300 yuan (US$36) and 1,000 yuan (US$121), local residents can rent a box in most local commercial banks.

Banks are not authorized to open boxes as they are private for people to deposit valuables, said the Agricultural Bank official.

With the increasing individual wealth in the city, the business of box leasing in banks is expanding.

(eastday.com February 15, 2003)