Romania: Explosive liquidation

Plagued by bankruptcy and recent explosive incidents, Bucharest moves to liquidate its only explosives maker in a move that is not in the country's economic or security interests.

The Romanian government earlier this month began the process of selling off its main state-run explosives maker. While the Defense Ministry seemed unmoved by the prospect of loosing its primary domestic source of explosives at Nitramonia Fagaras - despite the fact that there are few if any viable domestic options for steady supply - anti-terrorism experts are concerned about the potential security risk.

Government spokesperson Andreea Dumitru told ISN Security Watch she had "no comment" on the matter, but then added that there were "plenty of other sources explosives" to be purchased. However, when asked to clarify, she said she had "no list of providing companies readily available, but could forward ISN Security Watch the names of six such companies she found in a Google search."

While the Defense Ministry does not seem to be concerned, the privatization deal may raise a few eyebrows with Romania's NATO partners, and particularly the US, given the upgraded position the country now holds in the US strategy towards the Middle East and beyond.

Anti-terrorism experts may have even more cause for concern over the privatization of the companies from the Nitramonia Fagaras industrial platform, which was preceded by their virtual bankruptcy and the imposition of potential security risks.

The most recent wake-up call came on 21 September, when a thief trying to dismember parts of an open-air installation used for making explosives accidentally blew it up and suffered severe burns.

In the aftermath of the incident, security around the perimeter of the 400-hectare industrial platform was doubled: from two guards to four.

A couple of months ago, a pebble dropping into a tank with a 2 percent concentration of residual nitroglycerin triggered an explosion that made a hole in the ground big enough to host a two-storey building.

An official inquiry found that Nitramonia's dire economic status was arrived at due to poor management. And poor management of the industrial platform continues to mire its companies: unpaid electricity bills could make it impossible to cool the nitroglycerin, which would have a dangerously destabilizing effect. A lack of funding for security, including proper lighting and personnel, leave the facilities open to vandals and thieves, and perhaps terrorists.

On 15 October, Nitramonia Fagaras - which makes fertilizers and explosives and deals with the country's glycerin strategic stock - went up for liquidation and four local companies have already placed their bids for the job.

The agency in charge of state assets, AVAS, believes that the liquidation of this industrial platform is a better option than bankruptcy.

The companies producing explosives fall directly under the provisions of the law for the establishment of a contingency plan for the country's defense, meaning that if investors would have bought the companies resulting from the dismemberment of the initial industrial platform, they would have been bound by law to enable them switch to the war-time production of explosives if the need should arise. However, having the companies taken over by liquidators curtails this legal provision. And trade unionists are concerned that the law might be ignored.

Earlier this month, the trade unions issued a public warning to that effect. In a telephone interview with ISN Security Watch, trade union leader Lucian Cupu said "the risk of uncontrolled explosions is there at all times."

In short, there are major concerns that the liquidators will not provide a secure environment for the dismembering of this strategic industry.

Cupu also said he hoped the trade-unions would have a say in the future of the companies of this industrial platform and that the government "would not stray away from the legal requirement of keeping the companies' current profiles for the benefit of both the civilian and the military industry."

However, this looks very unlikely, at these liquidators are by no means bound by contract to secure the industrial platform during the liquidation, or to make their decisions with the long-term economic or security interests of Romania in mind.

The four companies who placed their 15 October bids are strictly liquidators, and their only aim would be to sell the explosives and fertilizers makers of Nitramonia Fagaras. Technically, they could hang on to economically valuable equipment and sell the rest as scrap metal.

Economically, there will be consequences. The government has recently drafted a new energy strategy calling for the vertical integration of all the companies it still holds in its portfolio, with the mining companies considered as an important part of this system. Mining requires explosives, and so will the government's grand road-building plans, and those explosives will now be hard and dear to come by.

Given Romania's NATO commitments, the loss of Nitramonia Fagaras and its explosives could also crimp joint maneuvers on Romanian soil.

The prospects are grim, both from an economic and security stand-point and in both the medium and long term. But the Romanian government has a long history of business mismanagement and quick-fix decisions that are not in the country's best interest.

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