ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(76)424
Vol.1976/0127

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(76)424final,
Brussels ,29July1976
COMMUNICATION FROMTHECOMISSION TOTHECOUNCIL
RequestfortheunanimousassentoftheCouncilunderArticle
54,paragraph 2oftheECSCTreatyonthepartialfinancingof
aprojectdesignedtoincreasethesupplyofindustrialwater
toBritishSteelCorporation'sRedcarandSouthTeessideworks.
C0MC76)424final.V
.

Doc.No..2269/76e
y
Communication totheCouncil
Subject:RequestfortheunanimousassentoftheCouncilunder
Articlejk,paragraph2ofthe2CSCTreatyonthepartial
financingofaprojectdesignedtoincreasethesupply
ofindustrialwatertoBritishSteelCorporation'sRedcar
andSouthTeessideworks.
Loanrequested:£3.9millions(+_6.USUAmillions)
Borrower:Northumbrian WaterAutcrity.
NORTHUMBRIAN WATERAUTHORITY
UndertheWr.terActof1973theBritishGovernment ,consclidatad
the:aanysualllocalundertakings ineachRegionintoni.aeRegional
Authorities eachresponsibleforwaterresources,landdrainagessewerage
andthemanagementofinlandwaterways.
TheNorthumbrian WaterAuthorityissuchanAuthorityandcovers
mostoftheNorthEastofEnglandincludingthevalleysoftheriver
TyneandtheriverTees.
TheWaterActof1973requireseachWaterAuthority,over
themediumtermtomatchitsrevenueandexpenditure .Anyexcessor
shortfallinanyoneyearisto.becarriedforwardandreflectedin
adecreaseoranincreaseinthetariffscharged'insubsequentyears.
TheWaterActalsoprovidesborrowingpowersfortheAuthorities
tofinencetheircapitalexpenditureprojects.Themajorsourcesof
suchloanfundsareforeigncurrencyloans,andtheNationalLoanFund.
oftheBritishGovernment .
Thesedebtsareservicedoutofrevenue.Anallowancefordepre­
ciationandinterestisincludedinthetariffscharged,whichmaintains
acashflowadequateforthispurpose.

-2-
Projectforwhichfinancialassistanceisreouired
Co<3t:£12.9millions(+21.0millionsSUA)atApril1976nrices.
DESCRIPTION OFTHEPROJECT \
TheNorthumbrian WaterAuthoritysuppliestheBritishSteelCorpo­
ration'sfifteenworksintheAuthority'sareawithwaterfor-industrial
uses.
Theaimoftheprojectistoprovideadditionalindustrialwater.
TomeettheincreasingdemandsoftheBritishSteelCorporation'sRedcar
andSouthTeessideworks,situatedontheestuaryoftheRiverTees,
... ··· ■ V>...
'InthecurrentphaseofBSC'sinvestmentprogrammeonTeesside,
crudesteelproductionpotentialattheseworksisbeingexpandedfrom
2.8m.tonsin1975tonearly5tonsin1979.Newsintering,ore
pelletizing andcokingcapacityhasbeeninstalledandanew1Umetreblast
furnaceisunderconstruction .Inlaterphasesoftheprogrammealarge
newplatemillandfurtherironandsteeiUnaking capacityaretobe'
installedatRedcar:thisadditionalcapacityshouldincreasetotal!
crude.steelproductionpotentialtoover10m.tons.
Theprincipalusesofindustrialwaterintheironandsteelworks
are:. "';v"..
-forcokequenchingandheatexchangercoolinginthecokingplant;
-forfancoolirigandprocessspraysinthesinterplant;
-forprocessingofgreenpelletsinthepalletization plant;
-forgascleaning,slaggranulation andirongranulationintheb3.ast
furnaces; ' .j
~forgascleaninginthesteelworks;
-forsecondarycoolinginthecontinuouscastinginstallations J
-fourrollcoolingintherollingmills.
.Inthefinancialyear197^/75,BSC'sRedcarandSouthTeesside
worksusedatotalof3^6.milliongallonsperdayofindustrialwater,
allofwhichwasobtainedfromtheNorthumbrian WaterAuthoritysupply
network.Asaresultofthecurrentphaseofexpansionoftheworks,
thisdailyusageisexpectedtoincreaseto1U.2milliongallonsper•
dayin1978/79.Whenthenewplatemillandfurtherironandsteelmaking
facilitiesare.installedatRedcarinthelater,phasesoftheCorpora­
tion'sinvestmentprogramme,dailydemandforwatershouldreach33.5million
gallons. „v 1■
TheWaterAuthority'sexistingsupplynetworkisinsufficient
tocopewiththeselargeincreasesinwaterdemands.Itistherefore
proposedtoincreasesupplybyabstractingadditionalwaterattwo
newpumpingstations,BlackwellandLowWorsall,ontheRiverTees,
afewmilesupstreamfrcsathesteelworks.Theincreaseinwaterobtained
wouldprovidefortheneedsofsomeotherusersaswellasthoseofBSC,inparticularalargechemicalworkssituated'fitBillinghaja.

-3-
Theprojectisdividedintotwophases:inthefirstphase,the
fBlacliwellpumpingstationwill'beccE-aissioned "bytheendof1976t-n&•
willprovideadditionalwaterof12.Umilliongallonsperfiaofwhich
BSCwilltakeanadditional5.2milliongallons.Subsequent!/,the
LowUorsailschemewillbecompletedandanewreservoirwillbebuilt
atKirkleathem ,almostexclusivelytocopewiththeadditionaldemand
fromBSC.TheCorporationwillthengraduallyreduceitsrequirements
fromtheBlackwellstationto700,000gallonsaday.
Theprecisephasingofthewateraugmentationprojectdoesnot
fullymatchthevariousstagesoftheBSCinvestmentprogrammeonTees-
side.Thenewpumpingstationsshouldbecapableofprovidingsufficient
waterfortheeventualexpansionofsteelmakingatTeesside,toover
10m.tons.Howevercommissioning ofthenewintakes,pumpingstations
andpipelineswillbenecessarybeforecompletioiiofthecurrentex­
pansionofsteelmakingto5tons.ThesecondphaseoftheKirkleathern
.reservoirwillnotbeneeaeduntilBSC'srequirements reachover20:nillion
gallonsperdayin1983.
UndertheControlofPollutionActof197^>theITorthumbrian Fater
AuthorityalongwithotherU.K.Wr.terAuthorities ,becameresponsible
forthecontrolofeffluentdispersedintocoastalwatersendrivers.
TneadditionaleffluentfreetheBSC'sRedcarandTeessideworkswhich
willaccompanytheincreaseinwaterusa^e,willbepumpedoatinto
thesea,atashortdistancefrcrathercouthoftheElverTees.The
BritishSteelCorporation andtheWc.terAuthorityarealreadyworking
togethertoensurethatthisadditionaleffluentwillmeettherequired
standards .
PRGP0S2D2ÏNANCING BYTHECOÏiflWÏTÏ
Thecostoftheprojectasawholeisft12.9n.e.tApril197o
prices;about£9.7j®.ofthistotalincludesboththecostsofinstalla­
tionswhichareexclusivelyforthesupplyofadditionalwatertoESC,
andBSC'sproportionate shareofthecostoffacilitieswhichwill
supplyBSCandotherusers.
Amountofloanproposed:£3.9m.representing ko%ofthecostswhichare
beingincurredonbehalfofBSC.
Termofloan:long-term
Phasingofproposed
payments:Accordingtothephasingofthosecostswithin
theprojectwhicharedirectlyrelatedtothesupply
ofwatertoBSC(i.e.i9.|1.).
CONCLUSIONS
Thisprojectisnecessaryinordertomeettheincreasingrequire­
mentsforrawwateroftheBritishSteelCorporation'sRedcarandSouth
Teessideworks.Largevolumesofwaterarenecessaryinthenewfacilities
underconstructionfortheproductionofcoke,ironandsteelandwithout
furtherinvestmentinthesupplysystem*thesupplyofwatercouli
placeaconstraintonoutputthesV.7»lwo.-'is .
•n/7^/' -Vr.

-k-
Thesizeoftheloanproposedhasbeendeterminedonthebasis
eole.Tyofcosts..offacilitiesorproportions ofthemwhichcanbesaid
to"be.directlyrelatedtothesupplycfadditionalwp.tertotheBritish
SteelCorporation. ''-. ...
Theaboveconsiderations wouldsuggestthatafavourable ,view
shouldbetakenoftheloanapplication becausetheinvestmentinvolved
willcontributedirectlyandprimarilytotheachievementoftheobjectives
outlinedbyArticle5^»paragraph2oftheECSGTreaty.
TheCommissionhastakenafavourabledecisioninprincipleto
extendtheloanrequested.Inconsequence,ineohformitywithArticle
.5^»paragraph2.oftheECSCTreaty,theCuminissionrequeststhe-assent
oftheCounciltothegrantingofaloanofh3.9millionstotheNorthumbrian
WaterAuthority.
r
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2269/76e