The Hungarian government on Tuesday took control of MAL Ltd, the firm at the centre of a toxic waste spill that has left eight dead and become the country’s worst-ever environmental disaster.

The head of Hungary’s disaster management directorate, Gyorgy Bakondi, has been named as the government commissioner in charge of running the company for up to two years, according to the official legislative gazette.

A bill enabling the government to take this unprecedented step had been hastily drafted and passed nearly unanimously by parliament late on Monday. It was signed into law by President Pal Schmitt on Tuesday.

Almost a million cubic metres of caustic slurry spilled from MAL’s aluminium ore processing plant in Ajka, western Hungary, when the wall of a waste storage reservoir broke open on October 4. The toxic red mud covered more than 40 square kilometres.

Earlier on Tuesday, Hungarian police detained the director of MAL. Police said on Monday they were questioning managing director Zoltan Bakonyi on suspicion of public endangerment causing multiple deaths and environmental damage.

Prime Minister Viktor Orban told Parliament that the government wanted to take over MAL Rt., the Hungarian Aluminum Production and Trade Company, because the safe restart of production at the alumina plant was needed to save the jobs of thousands of workers.

Mr. Orban said his administration was also freezing the company’s assets to ensure that funds were available to compensate for the damages caused by the disaster.

“Since this is not a natural catastrophe but the damage was brought about by people, the damages must be paid first and foremost not by taxpayers but by those who caused the damage,” Mr. Orban told lawmakers.

Late last week, Mr. Bakonyi said that MAL Rt. had not noticed anything irregular at the site. “The reservoir — which our men patrol daily — did not show any physical signs that something of this nature could happen,” Mr. Bakonyi said.

Mr. Orban, however, said the government had other suspicions.

“We have well-founded reasons to believe that there were people who knew about the dangerous weakening of the reservoir wall, but for personal reasons they thought it wasn’t worth repairing and hoped there’d be no trouble,” Mr. Orban said.

On Sunday, MAL Rt. said it was willing to pay compensation “in proportion to its responsibility” for the damage caused by the deluge.

Late Monday, Parliament passed a proposal giving the government the power to take over any company involved in a catastrophe, including the red sludge spill. While the opposition Socialists voted in favour of the plan, former Socialist Prime Minister Ferenc Gyurcsany said the Bill would give the government too much control.

“The government is asking for authorisation to take away by decree whatever it wants, whenever it wants and from whomever it wants and do with it anything it wants without any responsibility,” Mr. Gyurcsany wrote on his blog. “This in not simply unconstitutional, it is immoral and an atrocity.”

In Devecser, one of several towns hit by the flood a week ago and where many people are employed at the alumina plant, Mr. Bakonyi’s detention was met by mixed feelings.

“Someone surely has to be held responsible, but he wasn’t here when the reservoir was built so he can’t carry all the blame,” 56-year-old caterer Maria Kiss said. “I never heard any of the plant workers complain about him.”

The body of the flood’s eighth victim, an elderly woman, was found on Monday afternoon near Devecser. The woman was the last person reported missing.

In Kolontar, the town closest to the damaged storage pool, which is 10 hectares in size, construction continued of a new containment wall to protect the area in case of a new flood.

The wall — 620 meters long, with an average height of 2.7 meters — was being built of dolomite rock and clay, the National Disaster Management Directorate said.

It is intended to be sturdy enough to protect the unaffected parts of Kolontar, from which more than 700 residents have been evacuated, as well as towns farther from the reservoir, like Devecser, in case of another flood.

Last week’s sludge spill flooded three villages in less than an hour. Fifty people are still hospitalised, several in serious condition. About 700,000 cubic meters of the sludge was released.

The damaged reservoir still contains 2.5 million cubic meters of sludge, but it no longer has a large layer of water on top, so any new spills are expected to move slower and travel less distance — probably no more than a km — than the first one did.

Environmental State Secretary Zoltan Illes said additional risks were centered on a reservoir next to the damaged one, which contained 100,000 cubic meters (26.4 million gallons) of caustic liquid.

Authorities fear that if the cracks on the broken reservoir’s northern wall continued to widen and the wall falls, the second storage pool could also break, releasing a caustic flow.

Illes said the new wall in Kolontar — which will be permanently incorporated into the town’s landscape, with a bike path planned on its ridge — would withstand a flood even if the second reservoir burst.

Measurements taken in the past 24 hours showed no further movement of cracks on the northern wall, which experts have said is bound to collapse.

Health authorities warned the local population, as well as cleanup and construction crews, that the amount of red sludge dust in the air exceeded safe limits and said protective gear should be used.

Experts from Sweden, Austria and Belgium arrived Monday to help the government assess the environmental damage caused by the spill.

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