Quang Ngai determined to revoke Taiwanese-invested US$4.5
billion steel project
The authorities of the central province of
Quang Ngai have proposed termination of the Guang Lian Dung Quat steel
project by June 30.
Quang Ngai province has announced the conclusion of the
inspection of the management and use of land and the progress of the $4.5
billion Dung Quat Guang Lian steel project. Accordingly, there are sufficient
conditions for the authorities to decide to terminate the project.
Local leaders also said they had sent dispatches to
relevant ministries and agencies to ask for their comments and propose to
stop Guang Lian project by June 60.
The decision was made after the Taiwanese investor held
a vast area of clean land for 10 years, causing great waste for the province.
Guang Lian did not agree with the conclusion and protested Quang Ngai
authorities for publicly releasing the conclusion.
Dung Quat Guang Lian steel project was certified in
2006, located in Dung Quat Economic Zone, invested by Tycoons Group from
China, with an initial capital of $556 million.
This project's size and design capacity was adjusted
several times In 2008, Tycoons partnered with E-United (Taiwan) and increased
the capital to $4.5 billion, and capacity of 7 million tonnes. To create
favorable conditions for investors, the economic zone management board
cleared land and handed over 337 hectares of land to the investors.
In April 2012, two Taiwanese investors invited JFE
Group (Japan) to join the project but after some time studying the
feasibility of this project, in September 2014, JFE announced that it would
not participate in this project. Then the investors reduced investment to $2
billion to produce steel plates instead of technical steel.
In July 2015, Guang Lian admitted in written documents
to Quang Ngai authroties that it was unable to arrange funding for the
project. The project stopped in mid 2014. As of September 2014, $42 million
was invested in this project, including VND175 billion (over $8 million) from
the state budget for site clearance. Quang Ngai Provincial People's Committee
held many meetings on the termination of the project to avoid land waste.
In late 2015, a domestic firm - Hoa Phat Group asked
for permission from Quang Ngai to invest in a steel project with a total
capital of about $2-$2.5 billion, a capacity of 4 million tons per year, and
it needed 300-350ha of land that was granted to Guang Lian.
The decision to withdraw Guang Lian project was made in
the context of oversupply of steel at home and abroad.
Also in the central region, the public is paying
attention to another big steel project - Formosa (with designed capacity of
10.5 million tons a year for the first phase and 22 million tons for the
second phase) in all aspects of production and the environment.
Vietnam is located near the giant steel production
market – China – so the feasibility of the Dung Quat Guang Lian project is
rated very low. The Vietnam Steel Association "called for help"
many times as cheap Chinese steel flooded into Vietnam, pushing many local
businesses to the brink of bankruptcy.
In addition, under the Free Trade Agreement between
ASEAN and China, in 2018 the import duty on alloy steel will be 0%, giving
more lowcost advantages to Chinese steel.
Son Tung, VNN
|
Thứ Ba, 7 tháng 6, 2016
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