Al-Ahram Weekly Online   8 - 14 May 2008
Issue No. 896
Published in Cairo by AL-AHRAM established in 1875

Only with Damietta's consent

The suggestion that kickbacks were paid to secure approval for the construction of a controversial fertiliser plant in Damietta opens a can of worms, reports Mohamed El-Sayed

"A decision to relocate the E Agrium fertiliser plant will be announced within hours," Fathi El-Baradei, the governor of Damietta, told thousands of protesters who demonstrated in front of the city's municipal headquarters more than a week ago. The massive demonstration was staged amid growing fears that construction of the Canadian fertiliser plant would continue on Ras Al-Barr island despite concerns about its impact on public health.

The hours passed and no announcement was made, prompting disgruntled locals, NGOs and environmentalists to beef up their campaign.

"We are worried about the government's failure to end the project. It was the government, after all, that gave the approval for construction in the first place," says Gamal El- Beltagui, head of the Popular Committee for the Protection of the Environment in Damietta. Despite the fact that building work at the site has been temporarily halted after it was discovered the Canadian company had failed to obtain the necessary licences from Damietta's local housing authorities, in the absence of an official decision to relocate the LE10 billion plant, environmental activists in the coastal city issued a fifth appeal to President Hosni Mubarak on 4 May to issue a presidential decree and end the controversy. There has as yet been no response.

The issue has begun to send ripples across government, legislative and diplomatic circles. There have been reports that Canada's ambassador to Egypt, Philip McKinnon, has sent a letter to Minister of Petroleum Sameh Fahmi demanding that the issue be settled within three weeksor else referred to international arbitration. According to the daily Al-Masry Al-Yom, McKinnon has said that in the event of the project being ended E Agrium would expect to be reimbursed for the $400 million already spent on construction work, including $25 million in "commissions" paid to government agencies to secure the necessary approvals.

Though McKinnon denies having made any such comments and Fahmi stressed in a session held this week at the Shura Council that, "the Canadian ambassador has never intervened in the case of the plant", the suggestion that kickbacks have been paid has opened up a can of worms as far as the government is concerned. Essam Sultan, a lawyer and member of the as yet unlicensed Al-Wasat Party, says he intends to file a lawsuit with the prosecutor-general in order to investigate the charges. "The Canadian ambassador's denial that he mentioned commissions paid to government agencies came 10 days after the issue was first raised in the media. The lateness of the rebuttal seems to suggest that commissions were illegally paid to civil servants. Under the law such commissions are more rightly termed bribes."

The issue surfaced in the People's Assembly this week, with MPs demanding the government issue a statement clarifying whether or not commissions had been paid in order to secure approval for the plant's construction. "If it's shown that commissions were paid in order that the necessary licences be issued, then the contract [between the company and the government] will be null and void," said People's Assembly Speaker Fathi Sorour in a session held on Sunday.

Environment officials defended their decision to give the go-ahead to the plant during Sunday's debate.

"Environmental studies of the project showed that emissions from the plant would be within the statutory limits," says Mawaheb Abul-Azm, head of the Environmental Affairs Authority. She refuted claims by local citizens and environmentalists that have appeared in the media that the island had earlier been earmarked as a nature reserve.

Minister of State for Legal and Parliamentary Affairs Moufid Shehab stressed that the plant "would never be completed without the agreement of the local community". He added that Prime Minister Ahmed Nazif had summoned the chairman of E Agrium and told him that the government would not allow construction work to continue in the absence of local support for the project.

The session ended with a decision to set up a fact finding commission to investigate the issue amid growing speculation that plans were afoot to move the project to Ain Sukhna in Suez governorate. The rumours gained momentum when the chairman of the Shura Council Industry Committee, Mohamed Farid Khamis, announced that he was ready to donate half-a-million square metres of land in Suez for the building of E Agrium's fertiliser plant, a move widely seen as an attempt to compensate the Canadian company for the money it has already spent.

While residents of Damietta would probably welcome the relocation, environmentalists are not so sure it will solve the problems associated with the plant. "Isn't Suez part of Egypt?" asks Gamal Meriya, head of the Popular Committee for Consumer Protection. "Won't the people and environment of Suez be negatively affected by the emissions from this plant?"

"Why is the government still promoting investment at the expense of people's health? While other developing countries are banning or imposing restrictions on polluting industries Egypt seems to welcome such dangerous plants with open arms."

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