Transition impact:
|
The privatisation of Sidex will be one of the largest and most important in Romania, given Sidex’s weight in Romania’s industrial production, export and employment. Sidex's successful restructuring will have strong demonstration effects, providing a model for other large state-owned companies.
|
The client:
|
The borrower would be LNM Holdings B.V.. which in turn, after completion of the privatisation process, will own Ispat Sidex. Ispat Sidex is the largest Romanian steel plant, located in Galati in eastern Romania.
|
Environmental impact:
|
The project was categorised as C/1, requiring an environmental audit, which was carried out by an independent environmental consultancy firm. A member of the Environmental Appraisal Unit (EAU) visited Sidex and discussed environmental concerns with members of the company's management. The management of Ispat Sidex is fully aware of the significant environmental and health and safety issues associated with the plant and is willing to address them over a period of five year by the implementation of a short-term and long-term Environmental Action Plan (EAP). The proposed EAP includes, besides short-term, low cost remediation measures, a programme for further detailed environmental investigations to identify measures to be implemented in future investment projects.
Key environmental issues associated with Sidex, identified to date, include the following:
- Out of the 112 controlled emission sources of Sidex only 41 comply with emission standards (dust, CO, NOx, VOCs, SOx, PAHs and heavy metals are the main pollutants).
- Fugitive air emissions, exposure to heat and noise cause serious problems in the work place.
- Effluent waters pollute the two lakes (Molina on the eastern side and Catalina on the western side of the plant), which are connected to River Siret. The main pollutants are cyanides and ammonia, which have decomposed in the lakes and do not pollute the river.
- The specific energy and raw material use at Sidex is much higher than that of a typical western European steel plant.
The short-term action plan for 2002-03 addresses these significant issues and amounts to US$ 19 million, excluding technological changes of benefit to the environment, which will be made within the ongoing investment programme. The long term EAP amounts to about US$ 76 million.
The company will be required, through a covenant, to commit itself to the implementation of a short-term EAP. The implementation schedule for the short-term EAP will be phased over a two-year period.
|
