Romania Can Grant Some State Aid To Austria’s Voestalpine - Min

Romanian authorities and Voestelpine officials signed Wednesday the Memorandum of Understanding (MoU) on the construction of a steel mill in the Black Sea area, an investment worth EUR5 million.

Silaghi, who was in talks with the Austrian group for eight months, said Voestelpine can receive state aid only in some sectors, such as environment protection, if the investment observes eligibility conditions.

“State aid can be granted for environment protection, professional training and education, but the main condition is that the proposed projects observe eligibility criteria,” Silaghi told MEDIAFAX Sunday.

While competing with Turkey and Bulgaria to attract the investment, Romania has the advantages represented by the Constanta sea port and the Danube - Black Sea Canal, which favors transport, he said.

"Romania has the largest Black Sea port, which favors cargo ships, and the Canal which has direct connection with the Danube and enables transport to central and Eastern European countries. Moreover, infrastructure works will be carried out in the region, which can attract any investor. Romania’s EU membership and its tradition in the steel industry are other advantages,” Silaghi added.

He said Romania’s competitors for this investment have no restrictions imposed by the European Union, can offer “significant” state aid as well as land from the state’s property to the Austrian company.

Voestelpine needs six square kilometers of “secured land”’, and a certain level of carbon dioxide emissions accepted by the European Union, Voestelpine CEO Wolfgang Eder said after signing the MoU.

Silaghi said the Romanian Government is not the one in charge of solving these problems.

"The company is the one that has to acquire privately-owned land, while the regulation on carbon dioxide emissions effective as of 2012 will be established in Brussels by the end of November. We hope these norms will not be amended significantly, as that would lead to the relocation of many production units outside the European Union,” Silaghi said.

He added Voestalpine’s management will decide by the end of this year the possible locations for its steel mill, based on its own efficiency criteria.

"I consider Romania has done everything possible to be chosen for the investment,” he added.

Following the investment, Romania would become one of the main steel producers in Europe, with a total capacity reaching some 14-15 million tons of steel per year, of which Voestelpine would produce some 5.5 million tons per year.

Voestelpine already operates in Romania by its British unit Elmsteel, which owns a plant in Satu Mare county, northern Romania, since 2004.

The group said last October it will invest EUR18 million in a service center processing plate steel and other construction materials, whose construction will start in 2008 in Giurgiu county, southern Romania.

The group reported revenues of EUR10.5 billion in the fiscal year 2007-2008, 51% above the level of nearly EUR7 billion reported a year before, and a 31% higher net profit, to EUR1 billion.

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