MercoPress. South Atlantic News Agency

Vazquez: Uruguay decides Ence's pulp mill relocation

President Tabare Vazquez

Uruguayan president Tabare Vazquez said Wednesday that the authorization for the establishment of a pulp mill by the Spanish company ENCE along the River Plate estuary will be decided by his administration.

Vazquez who headed the graduation ceremony at a local military academy said that so far there's no formal request from Ence regarding the pulp mill.

On Tuesday and speaking from Government House in Buenos Aires and next to Argentine cabinet chief Alberto Fernandez, Ence's CEO Juan Luis Arregui announced the relocation of the pulp mill in the Uruguayan county of Colonia with a long coastline along the River Plate.

Two years ago the Spanish company decided to build a pulp mill in Fray Bentos, where a second plant is under construction by Finland's Botnia. However Ence only got to break the ground for foundations and during 2006 the project remained frozen until last September when they officially informed the Uruguayan government their relocation intention arguing insufficient infrastructure in the area for two pulp mills.

Supposedly a decision on the new relocation would be forthcoming in the following thirty days but it only happened Tuesday and in Argentina.

President Vazquez said that "regarding yesterday's announcement by Mr Arregui", Gonzalo Fernandez, Secretary General of the Presidency, had informed him "verbally" that Ence's CEO had anticipated "his intention of re-location in Colonia, south of Conchillas in a place known as Punta Pereira".

"This is simply a verbal communication, and no formal request, but when this happens the company will have to follow all the normal steps for such a request and it will be the Uruguayan government that authorizes or not, Ence's investment", underlined Vazquez.

On Tuesday the Argentine government praised Ence's decision of moving out of Fray Bentos where an escalating controversy with Argentina over the pulp mills' alleged pollution of the river that acts as a natural border between neighboring countries has been dragging for over a year and a half.

Actually even when arguing logistics reasons for the re-location, Ence came under mounting pressure from the Kirchner administration which in Uruguayan circles is believed to have been decisive at the moment of abandoning the original location in Fray Bentos.

Argentine cabinet chief Fernandez made it a point to underline the different attitudes between Spain's Ence and Finland's Botnia, which has consistently rejected any idea of relocation or halting construction with the purpose of elaborating an "independent" environmental impact assessment.

"The Argentine government particularly values Ence's willingness and that of its CEO, Mr Arregui who at all times has shown consideration towards Argentina's proposals", said cabinet chief Fernandez on Tuesday.

"The Uruguayan government has always supported Botnia and this makes dialogue most difficult", added Fernández.

However on Wednesday morning talking with a Buenos Aires radio show, Fernandez said he was optimistic about the possibility of dialogue resumption with Uruguay and insisted on the willingness "to review and find a solution to the controversy".