A fact-finding committee assigned to investigate the environmental hazards of the MOPCO fertilizer factory in the Egyptian city of Damietta concluded Wednesday that the factory is environmentally safe, state news agency MENA reported.

The MOPCO factory was at the heart of controversy in last November as resumption of the project galvanised local activists in Damietta and led to violent clashes between protesters and security forces.

Egypt’s ruling Supreme Council of the Armed Forces (SCAF) consequently ordered a halt to the construction of a controversial fertilizer factory in the northern Damietta governorate’s Ras El-Bar district.

The committee, which was commissioned by the syndicate of scientific professions, explained that all the gas emissions from the factory are not dangerous.

Osama Aboul Enein, the syndicate's secretary, said that the white smoke the factory emits, which some locals thought was toxic, is nothing but water vapour resulting from the water used for cooling.

Aboul Enein added that fertilizer manufacturing takes place in a closed circle inside the factory with no leakage of any toxic chemicals.

The story of MOPCO began in 2006, when Canadian fertilizer company Agrium signed a deal with the Egyptian government to build a factory for the manufacture of ammonia-based fertilizers in Ras El-Bar, a middle-class coastal area close to the Damietta seaport.

Total investment was expected to stand at $1.2 billion for the project, which would boast an annual production capacity of 1.3 million tonnes of fertilizer.

Construction of the plant began in 2008, but it faced a well-organised popular opposition campaign by local residents who feared the factory’s potential effect on both public health and the local environment. Damietta is the economic hub of Egypt’s Nile Delta region, whose residents depend largely on fishing and fish farming.

The company, for its part, has repeatedly said that the factory’s operations would not have an adverse environmental impact, citing inspection reports by environmental bodies to support its assertions.

Nevertheless, with local government officials and civil society groups all voicing opposition to the project, the case was eventually referred to parliament. A parliamentary committee drawn up to discuss the issue recommended that the factory be moved to Suez.

But the recommendation was never implemented. The Canadian firm refused to move the plant and threatened to resort to international arbitration since it had already obtained all necessary legal permits – and a green light to commence operations – from the Egyptian government.

Then, following a month of popular protests, the government abruptly announced the cancellation of the project. In compensation, the Canadian company was offered a 26 per cent stake in state-owned Egyptian fertiliser maker MOPCO.

At the time, campaign activists voiced fears that the move was a trick by the government which they believed would allow construction of the plant to continue once public opposition to the project had cooled.

Construction of the factory did resume last November; and the local residents were quick to respond by staging angry protests outside the factory and clashing with security forces.

It remains to be seen how the case will develop given the latest report by the fact finding committee.