Building of Kronospan plant in Bashkiria in doubt

Ecologists claim that Kronospan's proposed particleboard plant at Dorogino, in the Bashkiria Republic, will cause environmental hazards and pose the threat of significant deterioration of the local ecosystem.

Mass protests by the people who live in the area of Dorogino, where the new Kronospan plant began preparation about six months ago, have put the factory's future in doubt.

According to protesters, the emissions of formaldehyde from the new plant may adversely affect the local environment and cause the development of dangerous illnesses among the people.

In addition, the protesters are unhappy with the investor's plans to install some equipment which was previously used at the 'notorious' particleboard factory of Sonae in Liverpool and which was the subject of several legal actions in the UK, due, they claim, to its harmful emissions.

The protests took place in different ways, but in particular through the blocking of roads for the passage of construction equipment and machinery and the creation of a tented camp at the construction site.

The protesters have also threatened to block the Trans-Siberian Railway, a network of railways connecting Moscow with the Russian Far East and the Sea of Japan; and the M5 motorway, a major trunk road running over a distance of 1,879km from Moscow to the Ural Mountains.

Mr Ksenofontov, one of the leaders of the protesters, said people are concerned with the reports about the operations of another Kronospan plant, in the city of Yegorievsk (in the Moscow region).

Mr Ksenofontov said that, according to reports from Yegorievsk citizens, the environmental situation in the city after the commissioning of the plant has significantly deteriorated, resulting in an increase in the incidence of lung disease.

The citizens' protests have already come to the knowledge of the Russian Presidential Administration, as a result of which a specially created commission has recently visited the location of the future plant.

According to the commission's report, based on an audit it commissioned, it was found that the government of Bashkiria provided some benefits to the investor in serious violation of the law.

The official representative of the Presidential Commission commented: "The decision of the Bashkirian government on the provision of benefits for the project was taken without the analysis of a number of documents and, in particular, state examination of project documentation, as well as the assessment of the budgetary efficiency of the project.

"This means that the decision was taken on the data provided by the investor itself". In addition, the inspection found improper granting of exemptions for property tax.

According to Russian legislation, the exemption from tax may be provided only to machinery that has not previously been in use. However, as a result of the inspection, it was found that Kronospan had delivered to the Bashkiria project the same equipment that was operated at the similar plant in Liverpool for at least 10 years.

In this regard, Rustem Khamitov, President of Bashkiria, was instructed to conduct all the necessary examinations of the project, while the presidential envoy to the Volga Federal District was tasked with monitoring the compliance of the project with Russian federal laws.

As WBPI went to press, it was reportedly planned that independent state examination of the project would be officially conducted by the beginning of May.

In the meantime, the regional authorities believe that the protests form part of some intrigues by Kronospan's competitors in Russia.

Mr Khamitov commented: "The whole story is very strange. Kronospan is not a harmful chemical production, but a wood processing enterprise. The project sparked big public reaction, while the protesters have already sent their complaints to the EU state bodies - and even the UN.

"There is a possibility that these protests are part of a large campaign, which is currently taking place in many Russian regions, such as Krasnoyarsk Krai, Irkutsk , Kemerovo, Voronezh and Karelia, with the aim of ruining the projects of foreign investors, including those in the Russian woodworking industry. This is dangerous for the country's image and will prevent the attraction of foreign investments".

According to Mr Khamitov, in the event of failure of the project, Russia would lose about 4,000 potential new jobs, as well as potential revenue to the state budget in the amount of 33 billion rubles (USD$1bn).

Representatives of Kronospan have already denied all the allegations and said that implementation of the project took place in accordance with all the relevant ecological standards.

According to the initial plans of Kronospan and the Bashkirian government, the factory should be commissioned in 2014, while its processing volumes should reach 2.5 million m3 of wood per year and future production of 700m3 per year.

As part of the project, the investor, Kronospan, would also create a huge network of procurement companies.