Chemicals company BorsodChem has said that an E220 million industrial project that could create 4,000 jobs in Hungary may not see the light of the day due to rising power prices coupled with the uncertainty regarding energy regulation, reported the Financial Times.

In an appeal to the government, BorsodChem has teamed up with six big electricity users pleading that power prices in Hungary were already among the highest in the EU, the FT said. With the current situation prevailing, prices are set to rise by nearly 50% in 2008.

The newspaper quoted an extract from the elctricity users’ letter to the economy ministry as saying: As a result of market disturbances, our companies are uncertain today from what source and for what price they will be able to purchase electricity next year.

The FT quoted Kay Gugler, CEO of BorsodChem, as saying: We planned to build a new MDI [plastics] plant in 2009, worth E220 million. If this goes ahead it will bring further investment from a big Japanese company, plus knock-on investment up to E1.1 billion. [But] with electricity prices so high we will not go ahead.