|
Big steel projects bring more worries than rejoicings
It should be asked why investors still expect high profit from their steel projects when input material prices are skyrocketing, said Pham Chi Lan, former member of the Prime Ministerial Research Team, when talking about the heavy investments in steel projects recently, including the super-project in Vung Ang Economic Zone in Ha Tinh Province.
You said that Vietnam should thoroughly consider projects, benefits and the efficiency the projects can bring in both the immediate time and long term. Why?
I have several reasons for saying so. First, we need to answer the question, can Vietnam ‘digest’ so many big steel projects? In fact, a lot of commitments have not been implemented: I mean there is a big gap between committed investment capital and disbursed capital.
Second, we need to find out if the projects are feasible, and if they can bring efficiency to the host country. We need to ask why investors still expect high profit from their steel projects when input material prices are skyrocketing.
Third, we need to find out how many steel investors are like Intel Group, and really want to invest in Vietnam. Before deciding to make investment in Vietnam, Intel made a thorough survey of Vietnam’s market for 10 years. It also spent five years negotiating with Vietnam and spent time analysing the advantages and disadvantages of the investment environment.
And fourth, we need to anticipate risks to the environment. A lot of investors have made commitments on environmental protection but done nothing.
However, the steel price and demand are very high in the world and in Vietnam, while domestic companies still cannot meet the demand. What would you say about that?
One or two projects more would be enough to meet the domestic demand. If many projects are run in Vietnam, this would cause an excess. Moreover, the demand for fuel to run the projects would be very big.
Where would materials for the steel mills come from, if material prices keep skyrocketing?
There are more worries than rejoicings over steel projects. A lot of projects in Vietnam mean that Vietnam is still attractive to investors. However, too many steel projects would cause big worries.
Do you think that the foreign-invested projects will force Vietnamese enterprises to compete more fiercely to survive and develop?
In fact, competition should be seen as a good thing, and this is not a big problem.
As I said above, a huge number of steel projects would need a lot of electricity, while electricity is becoming more and more expensive, and Vietnamese people are experiencing daily electricity cuts. It would be unfair to force millions of people to give up electricity for foreign-invested steel mills.
Maybe the investors think that the government will continue subsidising electricity prices and they want to set up projects in Vietnam to use low-cost electricity there. The question is whether Vietnam should subsidise the foreign investors.
What benefits do you think the steel projects would bring if they became operational?
I’m not sure about the benefits the projects could bring. But I can give a figure that in the last year, 70% of foreign investors in HCM City have eported losses, and the losses should be questioned. In some cases, the expected profit of the investors was not obtained, and they suffered real loss. But in other cases, they reported loss in Vietnam and transferred profit to the parent companies.
As the companies reported loss, they did not have to do what they promised to bring to Vietnam. Meanwhile, Vietnam still has to fulfill its commitments to the investors.
Under the current laws, investment project licencing has been decentralised, while all localities want to attract investment to develop local economies. Do you think that with the mechanism it would be very difficult to cut down the number of projects?
Yes, I do. Local authorities now have big power in licencing foreign-invested projects. However, the government needs to take control in some important fields, especially in ones which use a lot of natural resources and may cause environmental pollution. The decentralisation mechanism should also stipulate the responsibility of localities. If local authorities have full power in licencing projects, Vietnam will comprise 64 small countries, not be a united country anymore.
VNN
|
