CAIRO: Residents of Damietta are concerned that Agrium has not yet vacated the site of its proposed fertilizer plant in Ras El-Bar although the project has been cancelled since August.
Local press reported activity on the site, even though the Higher Council for Energy had concluded that the land be returned to development authorities to be used for tourism projects.
The local campaign that led to the cancellation of the project has indicated its concern over the prolonged use of the land and has requested from the Governor of Damietta to step in.
After the cancellation of the fertilizer plant project, Agrium requested that the two initial phases of its project be conducted within the Misr Oil Processing Company (MOPCO) at the Damietta port.
To the chagrin of opposition campaigns, Agrium will be supplied with natural gas by the government for this new venture under the initial deal, which is at lower than current global prices.
For this end, Agrium Egypt had been building a new marine pier at the port to be used as an exporting base for its MOPCO products.
However, construction on the pier has been temporarily halted with a decision by the Damietta Port Authority because the company did not get an environmental permit and additionally by the Judicial Administrative Court which annulled the pier contract because it was not ratified by the State Council.
While construction on the pier has been halted, it appears that the government has already begun supplying Agrium with natural gas for the project.
A dispute has risen between MOPCO and the Damietta Port Authority after it requested that construction be resumed on the new pier.
Construction of the pier is to the tune of LE 60 million and Agrium Egypt has a 25-year concession from the Damietta Port Authority for the pier which cost $4 million.
After fierce local opposition led to the cancellation of the nitrogen fertilizer plant, Agrium decided that it would still continue with an agreement that would provide it with natural gas at cheaper than market prices.
Civil society groups are opposing this latest project because the contract has shifted from the state to a private gas venture.
They also object because the price of the MOPCO deal – signed in 1998 for 20 years – at a third of current world prices, would amount to a loss of $600 million in just six months.
Agrium’s annual share of urea produced by MOPCO will eventually reach over half a million tons by 2011, or 26 percent of the plant’s total production which they will receive at the fixed price.
The initial deal with Agrium, had their plant been built, would have resulted in a price review for the gas after four years.
