But although the Department of the Environment, Transport and the Regions has confirmed that the competition is planned, exactly when it will take place is unclear. The idea for the competition follows the revelation by Environment Minister Michael Meacher last December that an announcement would be made “in the near future”. He was responding to questions about plans for a new paper machine to be built at Aylesford in Kent.
But, the DETR declined to say when the announcement will be made and with Mr Meacher engaged in the war on foot and mouth and a General Election looming, there are fears that the competition will not be launched before the Election.
The government is understood to have had to opt for a competition approach for a grant because it would have breached EU competition rules if it simply gave a grant to Aylesford. The situation is made more difficult by the fact that the Aylesford plant is not in a deprived area of the UK and is not automatically eligible for most government or EU grants.
Delay
The delay by the government in making an announcement on a grant package appears to have caused real disappointment at Aylesford. The company has been planning for a new machine for several years and these plans are now thought to be on the back-burner.
One of the reasons for the disappointment is that the continuing delay by government in coming to a decision on a grant comes against a background of new newsprint mills being built on the continent.
In Holland, Stora Enso's Langerbruge plant is under construction and in Germany the Finnish corporation Myllykoski has also announced a new 250,000 tonnes a year newsprint machine with a start-up in August 2002.
The machine will be built at the company's Mochenwangen mill in Baden-Wrttemberg, Germany .
A recent statement from the company said the mill will this year produce 80,000 tonnes of wastepaper-based newsprint for publishers in Germany, France and Italy “who are suffering from the extreme worldwide shortage of newsprint. In return, and in order to secure their future newsprint needs, the publishers have signed long-term firm contracts corresponding to the capacity of the new machine.”
The total value of the Myllykoski project is estimated at 200 million euros and includes a standard newsprint line with an integrated deinking plant. It is thought to have received a substantial grant from the German government. And, as well as the new Stora Enso plant and the Myllykoski plant there are rumours this week that a third new recycled newsprint machine will be built on the Continent in Germany, although this is still to be confirmed.
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