The state to guarantee each Rafo job with E275,000

The government headed by Prime Minister Emil Boc is due to revive the Rafo Onesti refinery, which posted losses for no less than nine years and was shut down in February 2008, by granting record state guarantees, worth €330 million.

The main declared purpose of this decision is to save the 1,200 jobs, which means that the state could pay €275,000 for each job at Rafo in case the refinery's owners do not repay the loans they will have no difficulty accessing, given the state guarantee.

"We have adopted a memorandum, by which the government states its willingness to grant a state guarantee worth €330 million for Rafo Onesti, for the finalization of the investment plan and the new Rafo-Oltchim-Arpechim petrochemical chain, which will, on the one hand, lead to saving more than 1,500-2,000 jobs, and will contribute, on the other, to the creating a petrochemical chain extremely important for the Romanian industry and economy," Boc said last week.

In the past four years alone, Rafo registered total losses exceeding €130 million, and its net sales fell to €104.8 mln in 2008 from over €500 mln in 2004.

Rafo shareholders plan to create a petrochemical complex, close the gasoline production, and use the more than €300 mln which are to be contracted from banks for reconstruction and modernization. Since the beginning of this year, Rafo intended to unify its operations with those of the state-owned Oltchim company and of Petrochemicals Arges, the petrochemical division of Petrom, Romania's largest company, and company officials have already presented this project to Prime Minister Boc.

Ovidiu Tender, minority shareholder of the refinery, said he does not know the new shareholders' plan for reconstruction and conversion into an energy complex, but added that the intention of the government is commendable. "They requested government guarantees because I think they do not have the money to sustain the investments themselves, and require loans," Tender said. Bogdan Chiritoiu, Chairman of the Competition Council, told Business Standard yesterday that the Council has approved no draft legislation for state guarantees for Rafo to date, and received no documents in this respect.

standard.money.ro