Romanian Prosecutors Open Inquiry in ALRO Case

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Investigation

The National Anti-Corruption Directorate has announced the start of a criminal investigation into the privatization of the ALRO Slatina aluminum plant. ALRO is one of the biggest aluminum producers in Europe and one of the companies that holds an energy trading license in the region.

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Reported by

OCCRP
August 24, 2007

The National Anti-Corruption Directorate has announced the start of a criminal investigation into the privatization of the ALRO Slatina aluminum plant. ALRO is one of the biggest aluminum producers in Europe and one of the companies that holds an energy trading license in the region.

Reportingproject.net, a project of the Romanian Investigative Center, the Center for Investigative Reporting in Sarajevo and a network of freelance journalists, recently revealed the unorthodox methods used by a group of Israeli-Russian businessmen who took over ALRO in 2002. The "Vostok Project" story on the website drew from information in a London Commercial Court document to highlight how the businessmen kept other investors at bay and lobbied Romanian politicians for their influence in getting control over ALRO.

Recently the Russian investors announced that they would bid for the construction of two new reactors for the Romanian nuclear plant in Cernavoda.

In another development, Romanian President Traian Basescu urged the new Romanian Minister of Economy Varujan Vosganian to make public the contracts regional energy traders have with state-owned electricity producers. Basescu said that not even he as president can get access to these contracts right now.

Pressure from the Presidency has prompted changes in the way regional energy traders work on the Romanian market. Energy Financing Team (EFT), the biggest trader in the region, told reportingproject.net that: Energy traders with export contracts from Romania were approached by the Romanian government with a request to accept a substantial reduction in the deliveries of export energy from the Romanian utilities during the last quarter of 2006, so that the domestic demand for energy could be met.

EFT has accepted this request, which means that our off-take from Romania during this period has been reduced by 50 percent of the contracted quantities.

This has a negative commercial effect on EFT Group as a whole, in that during this period we are obliged to source more expensive energy from other producers in order to meet our delivery obligations to various clients around Europe.