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Price tag on chemical jobs

MORE than 2,000 jobs could be at risk at Runcorn's giant chemicals plant if funds cannot be raised for a £635m revamp of the run-down factory.

MORE than 2,000 jobs could be at risk at Runcorn's giant chemicals plant if funds cannot be raised for a £635m revamp of the run-down factory.

Ineos Chlor, which took over the site in January, claims a massive overhaul is needed due to years of neglect and under-investment by its previous owner, ICI.

It is understood that the company is planning a £65m legal claim against ICI, alleging that it was misled as to the true condition of the chlorine plant.

A source close to Ineos last night said the company would also be calling for the cancellation of £100m debt from a loan made by ICI to Ineos at the time of the takeover.

As part of the revamp, Ineos claims it needs £203m to replace the mercury cellrooms used to make chlorine and caustic soda and £170m to refurbish and maintain buildings and equipment that date back 27 years.

While the company will be able to fund a large proportion of the work itself, it still faces a £360m shortfall.

Ineos will be asking for up to £300m from the Government to keep the business afloat and any money raised from the Government and ICI could be used to raise fresh borrowing against an investment programme.

The source warned that the Runcorn plant would "die a slow death" if the funds could not be raised. The chairman of Ineos Capital, Jim Ratcliffe, is due to meet Trade and Industry Secretary Patricia Hewitt MP tomorrow to discuss the possibility of aid packages.

It is understood that managers will be seeking to reassure workers at the plant in a statement expected today.

But it is believed that ICI intends to contest Ineos's claims.

ICI bosses insist that Ineos's managers were well aware of the condition of the plant when they bought it and that their financial problems are a result of an acceleration in the company's investment programme.

ICI, which owns a 15pc stake in Ineos Chlor, is to contest the claim under its warranty agreements.

Industry analysts say the closure of the Runcorn plant, which produces around 80pc of Britain's supply of chlorine and caustic soda, could threaten up to 133,000 jobs nationwide due to chlorine's widespread use across several industries.

Chlorine is used to purify 98pc of tap water and is a key raw material for plastics and pharmaceuticals.

The General Municipal Boilermaker's Union, which represents workers at the plant, is backing Ineos's application for funding. A spokesman for Ineos said the company would be unable to comment until after tomorrow's meeting. ICI was not available for comment last night.

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