UPDATE 1-Hungary secures spill firm premises, dam almost ready

* Police establish security at firm taken over by govt

* Damaged toxic sludge reservoir holding, under scrutiny

(Updates with police securing spill firm’s property, quotes)

By Gergely Szakacs

BUDAPEST, Oct 12 (BestGrowthStock) – Hungarian police secured all
premises of aluminium firm MAL Zrt on Tuesday after a disastrous
toxic sludge spill that prompted a government takeover, as crews
raced to complete an emergency dam to prevent a second deluge.

Prime Minister Viktor Orban has blamed “human negligence”
for the escape of sludge from a giant reservoir at a MAL
Zrt-owned alumina plant that killed eight people last week, and
said the government would take control of the firm.

“Security responsibilities have been taken over by police at
all Hungarian premises of MAL Zrt. And we have also gained
control of (the company’s) information technology system,”
disaster commissioner Gyorgy Bakondi told a news conference.

He said police also searched the firm’s Budapest office and
tax authority APEH has ordered a full screening of MAL Zrt.

Bakondi said he would meet MAL Zrt board members later on
Tuesday to discuss next steps. The government will decide on
Wednesday whether it is safe to restart production at the plant,
he said. If so, the plant could resume output by the weekend.

He said officials were also investigating whether there had
been more sludge in the burst reservoir than the legal limit.

Authorities were also checking similar plants elsewhere in
Hungary, but so far had not found any irregularities that would
warrant immediate action.

Orban said on Monday a state commissioner would be appointed
to take control of MAL and manage its assets. Parliament then
approved a bill allowing the state to take over MAL Zrt.

SLUDGE DELUGE

A million cubic metres of lethal red mud surged out of the
reservoir on Oct. 4, flooding three villages and farmland and
fouling rivers including a tributary of the Danube, which flows
through or skirts a dozen European countries.

More than 120 people were injured by the spread of the
corrosive, caustic sludge.

Crews in the village of Kolontar had nearly completed a
600-metre-long emergency dam crossing the village to protect the
area from a second waste overflow.

Kolontar was evacuated on Saturday after cracks appeared in
the northern wall of the burst reservoir. Authorities say
500,000 cubic metres of caustic sludge could escape the
reservoir if the wall were to fail.

Government spokeswoman Anna Nagy said the state had not
nationalised MAL Zrt, telling a news conference that the firm
has been taken over temporarily “as an extraordinary measure …
is an extraordinary situation”.

She said it was important to revive the plant because this
involved the jobs of 4,000-6,000 people directly and many more
indirectly. MAL Zrt warned on Sunday that it could go out of
business in days if it were not allowed to resume production.

The government has put Bakondi, head of the National
Disaster Unit, in charge of MAL with the task of creating
transparency in its finances and drawing up a plan on how the
plant, a key employer in the region, can function safely.

“The disaster commissioner will have a team charged with
safely restarting the company, preventing the siphoning off of
assets and making sufficient funds available for damage
compensation,” Orban spokesman Peter Szijjarto told public
television m1.

European Commission President Jose Manuel Barroso told a
conference at Pecs University in Hungary on Tuesday the sludge
spill was a “very serious matter,” and said he would discuss it
at a working meeting with Orban.
(Additional reporting by Marton Dunai; editing by Mark
Heinrich)

UPDATE 1-Hungary secures spill firm premises, dam almost ready