Kick-off time for Guang Lian steel super-project remains a question
One year after the government released the decision to allow Guang Lian steel project to increase its investment capital to 4.5 billion dollars, the super-project in Dung Quat Economic Zone in the central region of Vietnam still has not received a certificate on capital increase.
On March 30, the government’s office released a dispatch informing the opinion of Deputy Prime Minister Hoang Trung Hai that the Quang Ngai provincial people’s committee has to report the land allocation and investment certificate to the project.
In August 2010, Hai agreed to the proposal of the investor to raise the designed capacity from five million tons to seven million tons per annum.
The investment capital has also been raised from three billion dollars to 4.5 billion.
In another happening, on February 24, 2011, after the meeting gathered to discuss the solutions to settle the problems of Guang Lian project, Deputy Minister of Industry and Trade Le Duong Quang released a document, asking the Dung Quat Economic Zone to focus on settling problems to grant investment certificates soon, in March 2011.
According to Quang, Guang Lian is a key project in the steel industry. The steel project is specially important because a lot of steel projects have been slow in implementing and others have been canceled. He stressed that the project is important not only to the steel industry, but also to the socio-economic development of Quang Ngai province.
Nguyen Trung, Deputy Head of the Dung Quat Economic Zone, said that the zone has not granted a license because the investor has not fulfilled the procedures required by the provincial authorities and the zone’s management board.
“We ask them to make commitments about the speed of the project implementation, and to show commitments by banks to provide loans to the investor. However, to date, the investor still has not submitted the documents,” he said.
While stressing that the provincial authorities support the super project, Trung said that in the time to come, the management board of the Dung Quat Economic Zone would grant the certificate for the adjustment of the scale of investment, provided that the investor can meet some conditions.
“The investor needs to prove that within a certain period, he has to implement the project and he needs to prove the origins of loans,” Trung said.
Meanwhile, when answering Dau Tu’s reporters if the Guang Lian project has been going slowly because of the financial problems, both Jung-Ching Tseng, Deputy General Director of the Taiwanese E-United and Pi Hshien, Chair of Guang Lian Vietnam affirmed that the investor does not have financial problems. E-United is a big group in Taiwan that is financially capable and had a total turnover of eight billion dollars in 2010.
“The biggest problem for us now is the lack of land to undertake the project,” Li said.
Dau tu has quoted its sources as saying that 300 hectares of land have been allocated to Guang Lian.
However, the investor wants all the land in the project area, about 500 hectares. The investor said he wants to implement the project in a comprehensive way and does not want to carry out the project in different parts.
“An uncompleted steel mill will not be put into operation, while it will take investor longer time to earn back capital. This will bring losses to investor, or even make banks feel unsafe,” Hsueh Hung Yi, General Director of Guang Lian Vietnam explained, once again asking Quang Ngai provincial authorities to allocate land to the project prior to July 31, 2011.
Dau tu has reported that Guang Lian has got the approval from banks to provide loans, though official contracts have not been officially signed.
Guang Lian is a super steel project that has captured the attention of the public.
When the investor planned to raise the capacity from five million tons to seven million tons, the Vietnam Steel Association sent a document to the Ministry of Industry and Trade and Quang Ngai’s authorities asking agencies to verify the finance capabilities of Guang Lian and order the investor to follow the commitments in the feasibility project. – Vietnamnet
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Tags: Guang Lian steel project