In this year’s 61st edition of Latvia’s current affairs publication “Bizness & Baltija” («Бизнес & Балтия»), a whole column was devoted to an interview with the General-Director of “Uralhim” («Уралхим»), Dmitry Konajev (Дмитрий Коняев). It has a catchy headline – “Uralhim” is unafraid of attacks”. Of course, I was intrigued: why and who would attack a holding company which is Russia’s biggest ammonia saltpeter manufacturer, and may even be the second biggest globally. And what prompts “Uralhim’s” top managers to fend off “attackers”? Independent journalist Grigory Zubarev clears this up.
About the history of this matter
I began my efforts to resolve this “test” last September. From my position as the Editor-in-Chief of BNN (Austria), I was very interested in the important reasons which prompted Rīga City Council to switch on the green light in just 370 (!) seconds to the construction of the RIGA FERTILIZER TERMINAL (RFT) at the Port of Rīga. There are no problems in regard to the terminal itself – let them build it; something else confuses me, from a planned annual turnover of 2 million tonnes more than half is ammonia saltpeter which is a hazardous cargo. In the relevant international code, among the nine most hazardous cargoes, ammonia saltpeter is ranked 5th, outranking such “analogues” as toxic and infectious substances and radioactive materials.
Ammonia saltpeter, also known as ammonium nitrate, practically becomes explosive when heated up to a temperature of 300 degrees, but chemistry students can refer to their textbooks and learn that the explosive decompression of ammonia saltpeter already occurs at a temperature of 230 degrees, because it contains 0.3% percentage mass of chloride. The ignition of saltpeter in a mixture with other substances, which I won’t list here, at… with water (those who are particularly curious can find the recipe on the Internet).
Due to these properties, ammonia saltpeter is a favoured ingredient of bomb makers: naphthenate contains 94.1% of saltpeter, while pyro contains 94%, ammonite – 79%, dynamite – 78%, ammonal – 60%. The infamous Breivik who blew up a government building occupying a whole block in Oslo, detonated 2.5 tonnes of ammonia nitrate. I will remind you that Rīga City Council has given the green light to the annual transportation of 1,050,000 tonnes of hazardous explosive chemicals from the Latvian border to the capital which is equivalent to one train a day. Moreover, Rīga City Council has authorised the concurrent storage of 90,000 tonnes saltpeter in RFT’s warehouses. Even with the utmost effort, I have not managed to find another port anywhere in the world where the storage of 10,000 tonnes of potential explosives is permitted. I’d be grateful is anybody can name such a port.
On top of all this, I will add that the ammonia saltpeter terminal-warehouse will be built in the immediate proximity of an existing liquid gas terminal, as well as two oil product terminals and a chemical product handling terminal. The cranes operating at these terminals offer an excellent view of Rīga city centre. And the 300 kilometre long route from the Russian border through Latgale to Rīga is practically unguarded. At the same time, we’re pleased to see how foolishly the Americans are supplying their forces along an equivalent route in Afghanistan. You see, representatives of the US Transport Security Authority recently informed the visiting Latvian Traffic Minister Aivis Ronis that Latvia is increasingly important to them, because the ever increasing flow of freight across the Northern Distribution Network (NDN) is handled through the hub of the Port of Rīga. Naturally, Ronis thanked the Americans for the opportunity to profit which they’re offering to our ports and railway companies.
I will not even start to consider how bin Laden’s confederates and followers could “thank” Latvia for its usefulness to America – you probably remember the world’s biggest acts of terrorism.
The attacks referred to by the General-Director of “Uralhim”
The first talks about the potential danger of million tonnes of ammonia saltpeter for Latvia and Riga took place on September 1, 2011. Back then, I began publishing a journalistic investigation on BNN „How residents of the capital of Latvia become hostages to money bags”.
Later on there were the publications “Whose hands the Riga Port has come to. Oligarchs?”, “Ammonia saltpeter – the threat for the entire Latvia”. Action groups have formed in Riga and Latgale that protested at the Saeima and the Riga City Council, and submitted a petition signed by six hundred people to the Mayor of the capital, Mr Ushakov.
The latest „attack” on „Uralhim” was on February 6, when I published an article „Will the Mayor of Riga Nil Ushakov turn the entire Latvia into a powder keg?” on the BNN portal.
Accordingly, not a single fresh critical arrow has been shot at the “RIGA FERTILIZER TERMINAL” project in the Latvian media during the past two and a half months. Well, during this particular totally quiet period, the General-Director of “Uralhim”, Dmitry Konajev felt it necessary to repel the „aggressors.” That’s right: I and my associates, mostly independent journalists, do not hide that journalistic investigation is going on. And we are ready to continue publishing beginning with this material.
One more domestic offshore
D. Konajev: “According to the principles of logistics it was convenient to place a trading house (URALCHIM Trading) in Latvia… Here is a border with Russia, schools with education in Russian (the children of „URALHIM” staff can study here)”.
„Uralhim” and its owner, Dmitry Mazepin (worth a fortune of $1.7 billion in 2012 according to Forbes occupying 56th place in the Russian and the 764th place in the world’s rich lists) is probably among the few employers who do not care deeply about the „recommendation” made by V.V. Putin to redirect freight flows from the Baltic ports to the ports of Russia. Moreover, Mr. Mazepin is not only out of prison, but also sits with the Chairman of the State Duma of Russia Sergei Naryshkin in the Supreme Supervisory Council of the All-Russian Swimming Federation, and if voters from the Kirov region have agreed to see the owner of „Uralhim” as a member of the local legislative assembly, Mazepin might be a member of the Federation Council, the upper house of parliament..
Maybe the Ust-Luga Port near Saint Petersburg does have the potential mentioned by Mr Konajev in „B & B” to reach a freight turnover of 180 million tonnes in just a few years (the total annual freight turnover of all the ports of Latvia, Lithuania and Estonia is about 150 million tonne). Meanwhile „Uralhim” ships most of its products through domestic ports, including that of the northern capital.
At the same time according to official information of „Uralhim”, its net debt amounted to $ 1.18 billion in May last year, while the figure mentioned by as independent sources was above $2 billion. As the newspaper РБК-daily” wrote, in such a situation it is quite logical for „Uralhim” to escape from the pressure of creditors and the state. The method is proven: take your business to where government intervention in the economy is much more relaxed than at home.
“URALCHEM Trading”, a 100% „subsidiary” of „Uralhim”, settled in Riga. The company will control exports of the parent company’s fertilizers. The Russian media says it is the only source of income of „Uralhim”. While the profit centre of the holding is established in Riga. The business algorithm is elegant: let profits grow in Latvia, while debts and payment defaults remain in Russia.
Nevertheless, let us take Mr Konajev at his bare word that the offshore company “URALCHEM Trading” has its headquarters in our capital solely because it is logically more beneficial to run trains with ammonia saltpeter over 300 km from the Russian border than to Vyborg in the Leningrad region, and quality of teaching in schools of Riga is much more better than that in the schools of Saint Petersburg.
But against all expectations, Mr Konajev in his interview to „B&B” revealed the real reason for “Uralhim” getting a toehold in Latvia.
Offers which it transpires can be turned down
D. Konajev: „In Riga, we had the most attractive offer.”
About who, when, how and why made this offer, we will explain in our journalistic investigation. In the meantime, of the offers which came from „Uralhim”, I will mention only two.
In trying to repay or restructure at least part of its crazy debt, „Uralhim” planned to list its shares at the London Stock Exchange by opening an order book for the initial public offering – IPO (Initial Public Offering). However, serious investors did not show the expected interest. Moreover, the company “Shades of Cyprus”, a minority shareholder of one of “Uralhim” factories applied to the Office of the UK Financial Services Authority to prohibit listing inclusion of specific securities in the list of shares listed on the Stock Exchange) to the Russian holding company on the London Stock Exchange. Finally, „Uralhim” was forced to announce cancellation of the IPO.
Another offer by „Uralhim”, which found no response, was made across the English Channel in the coastal town of Dieppe. Originally it was planned that the fertilizer handling terminal would be built not in Riga, but there. However, not 2 million tonnes per year as is the case here, but only 240,000 tonnes, and amount of investments to the project planned not $70 million as is the case here, but only $ 14.5 million.
Even though, the population of Dieppe is 25 times smaller than that of Riga, for almost three years the French Regional Directorate for Industrial Research and the Environment blocked attempts by the Russian king of ammonia saltpeter to implement the project (here, the State Environmental Supervision Office green lights the projects of “RIGA FERTILIZER TERMINAL” without delay). In France, the „Uralhim” project was discussed by political parties and parliamentarians headed by senators from the Green Party Jean De Zessar and Marie-Christine Blondin, members of local government, media, and activists of the International Socio-Ecological Union (here, the so-called public discussion was attended by 29 people of whom 20 were officials).
In Dieppe, the town’s residents hit the streets with placards dedicated to environmental protection, the most polite of which was “Down with “Uralhim” – for the health of our kids!”.
And, in his interview last May with the “Komersants” newspaper, Mr Konajev interpreted the events as follows: “The debate was not so much about ecology as the effectiveness of the project… the Dieppe project should be considered to be a trial”, i.e. which couldn’t be achieved with ammonia saltpeter in Dieppe can be achieved here in Latvia.
Latvia is no kind of Russia or France
D. Konajev: “The main part of [documents for RFT construction in Riga] was a package associated with environmental issues, confirming that the project does not harm the environment”.
We will devote individual investigations by our journalists to the issue of how RFT conducts its operations and conduct a study of the product which the terminal will handle as well as providing expert analysis of its impact on the surrounding environment and compliance with the project’s stated operating procedures. Right now the subject of “Uralhim” and the surrounding environment” is one of the hottest in the Russian mass media which reports on ecology.
Thus, according to conclusion made by the International Socio-Ecological Union and the Independent Ecological Rating Agency, the company „Uralhim”, located in Kirov Region, was the leader of the region’s pollution. Its share was 44% of the pollutants discharged to the Kama River. Residents of Voskresensk, Kirovo-Chepetsk held mass protests against the environmental pollution caused by “Uralhim”. In Voskresensk, the Russian Ministry of Natural Resources and Environment made seven attempts to inspect the plant „Voskresensk Mineral Fertilizers” owned by a co-owner of the fertilizers terminal, which is under construction in Riga. However, not only experts from the Ministry, but also representatives of the prosecution and the environmental police were not granted access to the territory. As a result of this confrontation the Russian Ministry of Environment turned to the law enforcement authorities with a request to initiate criminal proceedings.
In the aforementioned French town of Dieppe, the „greens” that estimated the impact of the fertilizers terminal construction project asked their Russian counterparts to study the ecological situation in towns where production facilities of „Uralhim” are located. As a result, French people were shocked by the widespread gross violations of environmental laws, accidents, emissions of pollutants and other emergency situations that „Uralhim” concealed not only from the public but also from the government environmental control authorities. Speaking at public hearings, the Co-chairman of the Regional Council of the Green Party of France Veronique Beregovua (quoted on moscow-post.ru): “Information about the company’s activities in Russia indicates that it pollutes the environment, without worrying about its reputation. Such behaviour is impossible in France.” „Jobs, but not at any price!” was one of the placards seen at the protests by residents in Dieppe.
A terminal similar to the “Riga Fertilizer Terminal” was built for „Uralhim” in the Russian town of Tuapse located in 30 kilometres from Sochi. It poisoned the air to such an extent, that people established the movement „Save the Tuapse!” When the governor of the Krasnodar region failed to solve the problem, Tuapse residents appealed to Russian President Dmitry Medvedev. Handling and storage of mineral fertilizers in Tuapse were suspended.
Besides which, when our initiative group addressed the leaders of the “Let’s save Tuapse!” movement with a proposal to utilise their experience in Rīga, they turned us down. Their explanation was a logical one: if “Uralhim” builds its terminal in Rīga, it’ll become easier to breathe in Tuapse.
As far as Mr Konajev’s contention that production in Rīga will be absolutely ecologically harmless goes; I’ll refer to an interview given to the radio station “Business FM” by the Russian Technology Supervision Service Nikolai Kutjin. In it, he openly stated that he suspected that there was a corrupt scheme afoot in the performance of expert analysis of new plants owned by “Uralhim’s” subsidiary Kirovo-Čepeck Chemical Plant. Therefore, he requested a repeated expert analysis. An reporter from “The Vjatska’s Observer” quotes Mr Kutjin as saying: “Having assessed the quality and materials of the expert analysis conducted, we conclude that the examinations have not been carried out honestly.”
In 2011, Russian Federation’s Public Chamber organised a roundtable discussion, “Public Ecological Control as an Instrument for Modernisation of Russian Industry”. In the report, “Ecology in the Monocity” it is mentioned that the environment in the District of Kirov has mainly been negatively affected by two companies: “Uralhim” and “Halopolymer” owned by the same person: Dmitry Mazepin.
For the sake of veracity, one should add that public and media pressure has had the desired effect: “Uralhim” has been forced to spend an increasing amount of money on ensuring ecological safety. Therefore, let’s take Mr Konajev at his word: even though experts in Russian and France believe storing ammonia saltpeter and protecting the environment are incompatible, here in Latvia there will be no in this regard.
To the envy of Münchausen
D. Konajev: „After implementation of the project [Riga Fertilizer Terminal] 150 new jobs will be created in Riga.”
It’s true. Moreover, the Riga City Council cheered the Rigans and Latvian residents with the news that the new fertilizer terminal at the port would not only provide 150 new jobs, but also – thereafter I quote – „in the form of property and land taxes the city will receive 30,000 lats per year. Moreover, receipts from freight will replenish the municipal budget of Riga by EUR 2 million (LVL 1.4 million) per year, and the state budget of Latvia – by LVL 20 million (EUR 28.5 million) per year.” That is, we see that the Riga City Council promises the establishment of the terminal will provide the state and its capital provide with additional funds in the amount of LVL 21.43 million. Let’s remember this figure.
But before we wallow in uncontrollable delight, let’s note the following:
- The state and municipal budgets should be replenished by those who earn, that is, subsidiaries of Latvian Railways – LDz, fertilizers terminal – RFT and management of the Riga Free Port – RFP. The last one in the list – it is a clinical case: as in the situation with Ventspils Free Port, you will not find information anywhere on how much and what kind of tax the port transfers to the state and municipal budgets. But if RBP’s port services are about EUR 1.2 per tonne, then handling 2 million tonnes from „Uralhim” every year will bring Mr. Loginov about EUR 2.4 million, which nobody knows where it will end up;
- profit and income are two different things. Income is a combination of money assets credited to a company’s account, whereas profit is what left over after all expenses, including a lot of expensive things: from acquisition of new equipment – to the taxes paid whether the property tax or social security tax, are deducted from the income. And after all these payments are made, only then is income tax charged;
- in our upside down economy, entrepreneurs are not motivated to show a profit when the combined tax surpasses 50%. As necessity is the mother of invention, businessmen invented a number of entrepreneurial tools to display a real profit from taxation, but in documents show figures that tend to zero;
- practice shows that the terminals, virtually, do not reach the designed 100% capacity, at best – 75%, or 1.5 million tonnes for RFT. I do not know the case when 75% of the capacity was reached in the first year of operation of a launched terminal, it is good when it happens in a year and a half;
- the Latvian Law „On Tax Application in Free Ports and Special Economic Zones” currently in force provides for a discount of up to 80% on income tax and property tax. And only a mad top manager would refuse to qualify for discounts to the maximum.
Now, let us imagine an ideal situation:
- RFT from the very first day of its operations reaches its maximum capacity – 2 million tonnes per year, and does not reduce the intensity of its work for 365 days a year;
- the management of LDz and RFT voluntarily reject tax discounts and want to pay taxes to the maximum;
- State Joint-Stock Company “Latvijas dzelzceļš” (LDz) sets a competitive tariff for fertilizer transportation for „Uralhim” of EUR 5 per tonne and therefore makes EUR 10 million per year;
- RTF convinces „Uralhim” to pay the unwisely high price of EUR 5 per handled tonne, and also makes EUR 10 million per year;
Moreover, right from the start we understand that neither LDz, nor RFT pays value added tax (VAT), because the goods for export are exempt from this tax. Furthermore, without having to pay this tax, LDz and RFT will still make money from this, because the state will refund the VAT to them that is paid to outside companies for the services received during transportation and handling of “Uralhim” products.
As we can see, this is the first utopian scenario: LDz and RFT employ the world’s most self-denying managers who don’t spend one santim earned by the company to safeguard the company’s operations – not for salaries, or to maintain its infrastructure, buy fuel, on repairs or credit repayments – in short – they don’t spend a dime on anything, and the joint income of both companies amounts to EUR 20 millions which translates into pure profits, out of which pursuant to the law 15% must be deposited into the State budget. 15% of EUR 20 million is EUR 3 million or LVL 2.1 million.
It’s crystal clear that if all income is comprised of profits, it is longer subject to any costs. In other words, Rīga City Council has promised the city and world that EUR 21.43 million in tax payments will be deposited into the budget, and in so doing has made a ten-fold error even given the most impossible terms! However, we already know a thing or two about the differences between vision and reality.
From one extreme to the other
Let’s imagine another extreme:
RFT’s landlords are the richest employers, and RFT employs the best qualified personnel in the world, and the company’s entire income, i.e. EUR 10 million is allocated for the payment of salaries. And nothing else;
All 150 people employed in these new jobs have declared their place of residence in Rīga, and senior managements have declined the chance to declare their place of residence in Jūrmala, Baltezers and other “holy places”, officially becoming residents of the capital city and paying their income tax into the capital city’s budget;
None of these 150 RFT employees are suffering from any kinds of illnesses or diseases which could reduce their income tax rate, and they have family members to support whose existence would entitle them to income tax discounts;
Swedbank carries out an unheard of act of generosity and announces that the EUR 30 million credit paid out to the terminal is in fact a sponsor’s donation which does not have to be repaid; and to top all this RFT itself simply has not costs whatsoever.
So, in a crazy fantasy RFT decides to spend its total EUR 10 million profit on paying salaries to 150 workers – a little more than LVL 3,000 monthly to each one of time. In this case, the state will receive a little less than LVL 2.5 million in form of social security tax, and the city budget will get nearly LVL 1.2 million in the form of income tax (withholding 80% and transferring 20% to the state budget). But for small trifles, dreams like this should come true. And only then will the figure promised to the Rigans by their own local government actually come to fruition.
And finally, let’s assume a situation that is as close to reality as possible:
- „Uralhim” and RFT still operate the same perfectly from the very first day generating maximum returns for themselves and Latvian Railways;
- 50% of the revenue goes to administrative expenses, which is quite liberal, and the average salary at the terminal is a competitive LVL 1,000 per month.
- oh yes, the credit – 25% of income goes to its servicing;
- the remaining 25% of income is profit.
What can RFT give to the state and its capital city? Here it is:
1. Income tax – LVL 380,000 (to the city, which would pass 20% to the state).
2. Social tax – LVL 630,000 (to the state)
3. Enterprise income tax – LVL 220,000 (to the state), if pursuant to the law a 50 percent discount for income tax (and maybe up to 80% – which we do not know about) is given to a terminal operating in a free economic zone.
4. Property tax – a sealed book. Due to the impossibility of verifying the figures of the Riga City Council, let’s assume it to be their mentioned LVL 30,000 (to the city).
5. Other taxes – a mere trifle. Better keep the silence about the natural resources tax – can we all be silent – otherwise we will be laughed down! The very same “LDz cargo”, the beloved „subsidiary” of the Latvian Railways, paid tax of just LVL 700 for the year 2010. In our case, who will actually assess the risks of transporting and handling more than one million tonnes of ammonia saltpeter?
In total: LVL 410,000 go to the city and LVL 850,000 goes to the state. On aggregate: LVL 1.26 million. However, if you recall the promised figure was LVL 21.43 million. It turns out that if we take more or less realistic conditions after the arrival of “Uralhim”, the prediction made by the prophets of Riga City Council who announced the advent of a brighter future for Latvia and Riga has already proved to be more than 1,700% wide of the mark.
What, in this very case will be the contribution of the Latvian Railways in the form of “LDz cargo”? In 2010 (data for 2011 are unavailable) while it transported just over 49 million tonnes and received income of LVL 200 million, the leading „subsidiary” of LDz transferred income tax of $ 75,620 (! lat) (seventy-five thousand, six hundred and twenty dollars) to the state budget. I don’t know about you, but I have no illusions as to expectations that “LDz cargo” will fill the budget with taxes to the roof.
Even if we assume that the state holding LDz will transfer the same amount of taxes as RFT, i.e. LVL 1.26 million to the budget, then, these companies that serve the interests of „Uralhim” by transporting an insane amount of ammonia saltpeter through our country will pay about LVL 2.52 million in taxes per year. And only if the terminal, from the very first day, reaches 100% of its projected capacity, and maintains this operational intensity forever.
And so it is. Rīga City Council states that RFT’s operations will top up the State budget and that of the capital city by EUR 21.43 million. However, to a certain extent, I’m exaggerating the ideal tax calculation conditions, beyond which doubts arise about the state of one’s mental health, and nevertheless it turns out that the capital city’s declared municipal tax contribution indicator turns to be overly optimistic by at least ten-fold. In the very first attempt to approach reality, an eight-and-a-half-fold error was made.
Black magic and unmasking it
There are three possibilities here:
1. Rīga City Council doesn’t have a clue what it’s deliberating about and genuinely believes the figures sent to it by RFT.
2. Rīga City Council and those commissioning the RFT project are deliberately stirring the air, in order to use beautiful figures to silence those who don’t want to see Rīga turned into a powder keg.
3. I don’t have a clue about our country’s tax legislation and arithmetic.
I prefer the third option in hope that the Riga City Council, RFT and LDz will explain to stupid me how taxes in the amount of EUR 28.5 million will be paid from EUR 20 million of income?
It’s time to return to the sinful earth: I contend that the budget of both Rīga and the State will receive a sum in taxes from RFT’s operations and governance that is many times lower than the figure stated by Rīga City Council. Accordingly, I believe it would be better if the city’s civil servants responsible for public relations did not attempt to use impressive anticipated tax returns as a means of persuading us to live side by side with a temporarily conserved explosive, and that they would instead provide us with a clear calculation justifying how they have reached the expected tax figure from the operations of the “Riga Fertilizer Terminal” project.
In the meantime, I continue to have the feeling that the value of the oil painting „Fertilizer Terminal in the Port” painted by the brushstrokes of Riga City Council’s tax revenues on the canvas of the state and city budgets is fantastically inflated. The epic question of „Who cares?” does not require an answer. However, it’s obvious to me that the true owners of the terminal are ready to pay LVL 1.5-2 million lats per year in return for a reduction in the health and safety of all those living along the 300-kilometre distance negotiated by one million tonnes of ammonia saltpeter from the Russian border to RFT terminal on Kundziņsala Island which is a stone’s throw from the centre of Rīga.
It’s maddening! Particularly, under these fantastically unrealistic budget conditions, not only do the figures presented by RFT and Rīga City Council not tally up, but they flee from one another establishing the kind of distance usually characteristic of normal people fleeing from lepers.
And what’s even more infuriating is that central government is blind to the manipulation of these figure. Or perhaps it can see this? If its eyes weren’t closed to this situation, it wouldn’t permit tales to be told, but would demand a detailed economic analysis of the taxes paid into the state and municipal budgets. And at the same time maybe the powers that be could ascertain the timeframe within which RFT will start operating at full project capacity, which tariffs will be imposed for the transportation of “Uralhim” products by state rail, what the anticipated profits are from which taxes will be paid into the budget, and which tariffs will be imposed on RFT for reloading and storing ammonia saltpeter?
There is no small amount of questions which could be asked by a genuine economic landlord interested in the country’s growth.
Providing of course, that he’s genuine…
Sometimes it’s better to speak out than to bite one’s tongue
D. Konajev: „It will be a complex of eight domed warehouses with total capacity of 180,000 tonnes for simultaneous storage … No ammonia will be there.”
Stop, Mr Konajev, here I simply have to ask for more details. It’s clear from all the documents that Rīga City Council has authorised the storage of 90,000 tonnes. And the so-called ecological expert analysis is based on this figure which already exceeds many times over the amount of ammonia saltpeter that can be safely stored within reason. Therefore, is it true that now four and not two million tonnes of “Uralhim” products will be reloaded in Rīga?
It’s most likely the case that “Uralhim’s” General-Director gave away more than he intended (there’s no chance that this was an error on the part of the journalist, because the interviewee personally confirmed the existence of such materials). And let somebody now try to convince me that there is no hidden pact between Latvia’s “Molotov” and Russia’s “Ribentrop”, which will eventually allow RFT to approach Latvia’s and Rīga’s powers that be with a “justified” proposal to transport not one, but two million tonnes of ammonia saltpeter through our country. If we keep in mind that “Uralhim” already intends to produce 6 million tonnes of mineral fertiliser this year, then it turns out that RFT’s godfathers intend to use our capital city as the hub out of which they will handle 2/3 of the entire quantity of products produced by this giant Russian chemical plant.
From past experience, it’s clear that the population in this country will once again be subjected to a brainwashing process involving promises of unheard of profits, references to the transit business coming to the rescue of the economy, as well as scheming competitors and the evil lies of envious rivals. And Rīga will not be transformed into a powder keg, but a proper arsenal for which the lighting of a match will suffice.
Moreover, they’ll try to persuade us that ammonia saltpeter – ammonium nitrate – is nothing more than a harmless mineral fertiliser, which doesn’t explode and which can be sprinkled onto fields. It’s evident that event the official ecological expert analysis has found that a 100 m protected zone is quite adequate around the RFT terminal.
This is true: deftly – stealthily, so as not wake the sleeper. However, one should remember recent events when nobody bothered to wake those who were asleep:
- an uncontrolled reaction of chemicals occurred in one of the containers located within the port of Riga in which the extremely toxic substance of acetone cyanohydrin was spilled. Residents of nearby homes were evacuated and the Riga City Council has announced the threat of an explosion, and has prohibited swimming and fishing in the Daugava River;
- a hurricane struck the acting fertilizer terminal “Alpha osta” in Vecmīlgrāvis. Metal structures as tall as a ten-storey building have been swept away. They fall onto neighbouring buildings, railroad tracks and on a train standing in the immediate vicinity. If at that time there happened to be cars with ammonia saltpeter standing on the tracks, or if tonnes of metal fell onto a nearby standing warehouse of ammonia saltpeter, then, as Professor of Chemistry of the Riga Technical University, Eriks Bizdens explains, everything could blow up. And there would no more Vecmīlgrāvis in Riga today;
- deadly acrylonitrile acid leaked at the terminal “Ventammonia” in Ventspils. If two men working at the berth who sacrificed their health could not stop the further spillage of the acid, it’s scary to think what victims there could be;
- harmful chemicals got into the Mārupīte River near Riga, and from there got into the Daugava River. Drinking water for neighbouring residents was brought from the capital, while dead fish were removed from the river to avoid poisoning birds;
- 17 cars derailed near Daugavpils, including five tanks of fuel oil and technical solvent. The liquidators of the disaster were taken to hospital.
I mention all these examples, because even with the 100-meter safety ring around RFT no one can guarantee that is this very safe. Indeed, after the train accident near Daugavpils, the CEO of the Latvian Railways Uģis Magonis in his interview to the Latvian Radio frankly admitted: „Unfortunately, we cannot preclude the possibility that such a rail accident will happen again in future”.
Therefore, let’s imagine that train carrying 4,000 tonnes of ammonia saltpeter to Rīga is derailed. And that there are enough quick thinking people out there who know to give it a temperature of 300 degrees. Among other things, studies conducted by the Russian Nitrogen Industry and Organic Chemistry Institute of Scientific and Technical Design show that in such an instance, land within a 520 m radius of the epicentre would be completely incinerated, powerful damage would affect a territory within a radius of 766 m, moderate damage would affect a territory within a radius of 1313 m, and minor damage would affect a territory within a radius of 3832 m. Greetings residents of Vecmīlgrāvis, Jaunmīlgrāvis and Bolderāja!
However, Mr Konajev reassures us: 180,000 tonnes will not be stored in Rīga at the same time. And he’s quite right, because ammonia and ammonia saltpeter are quite different products. Moreover, liquid ammonia is transported by sea rather than via overland routes. So how can it be that “Uralhim’s” General-Director is wearing a boot of this kind on one foot, but a different one on the other? The answer turns out to be as follows: the general public has got the impression that ammonia is something deadly, but ammonia saltpeter – no big deal, a pinch in a geranium pot on a window sill and nothing more. You see, this is how Mr Konajev is reassuring the wider general public: relax, brothers, you’re not going to have to worry about any ammonia. And reassured by this good news, folks will be relaxed about the piles of ammonium nitrate under their windows.
“…we will overcome the enemy, victory will be ours…”
D. Konajev: „We believe in our rightness, and, if necessary, we will defend the project in court. Other matters manifested in the form of the wide swath about us are associated with public relations and unfair competition”.
Let’s start with unfair competition. In Latvia, in theory, two terminals could compete with RFT: “Alpha osta” in Vecmīlgrāvis, a district of Riga, and “Kālija parks” in Ventspils. But in practice: neither “Alpha osta”, nor “Kālija parks” can handle the volumes that interest „Uralhim”. And not just because they do not have the required storage facilities. “Alpha osta” is unsuitable because of its relatively low capacity, and as for “Kālija parks” – that’s a another story altogether.
When Ventspils City Council discussed the environmental aspects of the terminal, the experts – environmentalists quite clearly justified how environmentally dangerous it is to store ammonia saltpeter in warehouses near residential areas. Moreover, the terminal was prohibited from keeping even one (!) car with ammonia saltpeter on the tracks outside its territory.
The fertilizer terminal in Klaipeda, Lithuania works with other types of cargo, and does not aspire to handle „Uralhim” products. Muuga Port in Estonia and Kotka port in Finland have long established links with the chemical „barons” of Russia, and do not show any significant concerns about competition with RFT: everyone has his trade.
Who is then this unfair competitor not mentioned by CEO of „Uralhim”? It turns out that it’s us, the initiative group, which believes that the capital of Latvia is so packed with dangerous goods that the addition of one million tonnes of ammonia saltpeter (or maybe yet two?) is evidently too much. The one that calls for: yes to the terminal in Riga, no to ammonia saltpeter!
Our protests were noticed by RFT, and as early as September last year they issued a press release in which the Chairman of the Company’s Board, Roberts Kļaviņš unfairly placed all the blame on us: accusing us of spreading false information and misleading the public. And to make it clear what’s what, in the best Soviet traditions he chimed in with an additional accusation: „The questionable reputation of the initiative group’s representatives and their previous work had already attracted the attention of the law enforcement agencies, both in Latvia and in neighbouring countries.” However, almost six months have passed and the law enforcement agencies, both in Latvia and in neighbouring countries have not turned their attention to us. And if believe Mr Kļaviņš, it turns out that only the “authorities” and he himself know about this ATTENTION – which turns out to be an interesting association.
The members of our initiative group are meeting people, as well the general public and political workers and explaining our position, mentioning facts that point to signs of corruption in the way that the development of the “Riga Fertilizer Terminal” project is being managed, and continuing the investigation conducted by independent journalists, whose revelation – I repeat – we will continue to publish. Of course, this has come to the attention of not only RFT, but also “Uralhim”.
Most likely, this is why Mr Konajev suspects that we will have enough material to go to court and is already showing the muscles of his holding company. Moreover, barely concealing the fact that one of our members in Daugavpils has already been warned that he will lose his job and his family’s sole source of income if he continues to do the work he has begun. In turn, in Rīga another of our confederates was unexpectedly approached by a threatening looking character who gently reminded him that while the journalist Jēkobsons was slashed for merely publishing correspondence, hundreds of millions are at stake.
That’s the way things are, Mr Konajev…
That’s the way things are, citizens and countrymen…