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UPDATE 5-Hungary says to take control of toxic spill firm

* PM Orban says state to take control of MAL Zrt assets

* Crews building emergency dam to prevent second spill

* Death toll rises to 8 as missing person found

(Adds parliament vote)

By Gergely Szakacs

BUDAPEST, Oct 11 (Reuters) - Hungary’s prime minister on Monday blamed “human negligence” for a spill of toxic red sludge that killed eight people last week, and said the government would take control of the company responsible.

Disaster crews were racing to finish an emergency dam to avert a second spill of the by-product of alumina production from the sludge reservoir owned by the MAL Zrt company.

A million cubic metres of lethal red mud burst out of the reservoir last Monday, flooding three local villages and fouling rivers including a tributary of the Danube.

Government spokeswoman Anna Nagy said Zoltan Bakonyi, the head of MAL, had been taken into 72-hour custody on Monday. He was being questioned by police on suspicion of endangering public safety and causing damage to the environment.

Prime Minister Viktor Orban told parliament that damages must be paid to those affected by the spill, jobs at the plant saved, those responsible held accountable and further risks at the company’s sites identified.

“Hungary’s largest ecological disaster was caused by human negligence, by allowing a hazardous material to escape,” Orban said. “We need to bring the company responsible for the red sludge spill under state control, and its assets under state closure, until all of these four tasks are handled,” he told parliament.

Orban said a state commissioner would be appointed to take control of MAL and manage its assets. Late on Monday, parliament approved a bill which allows the state to assume control of MAL Zrt, with 336 votes in favour, 1 against and 13 abstentions.

“In light of what happened, we have good reason to believe that there were people who were aware of the dangerously weakened state of the walls of the reservoirs, but driven by their private interests they believed they were not worth repairing and hoped that the trouble could be avoided,” Orban said.

Disaster crews were racing to finish an emergency dam to protect the village of Kolontar in case the weakened wall of the damaged reservoir fell.

“We hope to have the dam finished by Tuesday,” the prime minister’s spokesman told TV2.

With the nearby town of Devecser, home to 5,400 people, still on alert and Kolontar evacuated, the exact cause of the disaster remained unclear.

In a statement on its website on Sunday, MAL said the walls of the reservoir met the prescribed rigidity standards, based on the findings of a technical survey carried out in 1995.

Zoltan Bakonyi is the son of MAL’s founder Arpad Bakonyi, who is the 28th richest person in Hungary with net assets worth 16.5 billion forints ($83.84 million) according to a 2010 top list of business daily Napi Gazdasag.

MAL’s Chairman and co-owner Lajos Tolnay is 21st on the list with assets totalling 23 billion forints.


Gusztav Winkler, a professor at Budapest Technical University, who surveyed the site when the reservoir was being built 30 years ago, told Reuters the structure of the soil made the reservoir unstable.

Tibor Dobson, a spokesman for disaster crews, said evacuated residents of the village of Kolontar must remain in emergency accommodation. The death toll rose to eight after a person reported missing was found.

Kolontar was evacuated on Saturday after cracks appeared in the northern wall of the reservoir.

Dobson told Reuters on Monday the latest checks performed on the damaged northern wall of the sludge reservoir showed no further disturbance.

The latest water samples taken on Monday showed that alkalinity levels in the Danube and the river Raba were back to normal, the interior ministry said on its website.

A team of EU environmental experts arrived in Hungary on Monday to help authorities. (Reporting by Gergely Szakacs, Marton Dunai and Sandor Peto; Editing by Noah Barkin)