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$9.8 billion steel project fails dismally
The Ca Na steel project with tentative investment capital of nearly $9.8 billion may have its investment license revoked after two years of no progress.
Bui Quang Chuyen, Deputy Director of the Heavy Industry Department under the Ministry of Industry and Trade, has confirmed this information.
Ca Na is the biggest steel project so far in Vietnam and also the largest-ever foreign-invested project.
In 2008, the investment license was granted to the joint-venture of Malaysian Lion Group and Vietnamese Vinashin Group. Vinashin would make 24 percent of the capital contribution, including the land use right.
On November 23, 2008, the ground-breaking ceremony for construction took place. As committed, in the first phase of 2008-2011, investors would have to complete construction of a steel mill to produce HRC (Hot rolled coil) with a capacity of 4.5 million tons.
To date, no progress has been made in its construction. After the ceremony, only part of the site clearance was done even though Vinashin spent 83 billion dong for the work, while Lion Group has proven to be financially incapable.
Ca Na steel project was expected to cover 1650 hectares and 330 hectares of the sea’s surface in Ninh Thuan province.
In the first phase of investment, 2008-2011, investors planned to put the steel complex into operation as well as two thermo-power projects with a capacity of 1450 MW and a seaport with loading/ unloading capacity of 15 million tons/year.
Chuyen told VietNamNet that it is very difficult to continue the project. Sometimes authorities could not contact the investors, because the Malaysian agents returned to Malaysia and has no representative office in Vietnam.
According to Ninh Thuan Industry and Trade Department, this is an A-group project, five relevant ministries and the Prime Minister had to agree to grant its investment license.
After signing the joint-venture contract to develop the project, Vinashin and Lion Group did not set up the project management unit.
Le Kim Hung, Director of the Ninh Thuan Industry and Trade Department, remarked that Lion Group cited many reasons to explain its tardiness on the project. When talking with Ninh Thuan province people’s committee, the investor claimed they met financial difficulties due to the global economic crisis.
During project implementation, the Malaysian group made unreasonable proposals to the Government and authorities, asking the Government of Vietnam to act as guarantor for the group to borrow money. They also wanted Vietnam to protect its steel mill when Chinese low-cost steel products flooded Vietnam.
The Ministry of Industry and Trade has checked information and found out that Lion Group is not listed among the world’s 150 biggest steel manufacturers.
Officials cannot see any more opportunities for the project to continue, especially when Vinashin must be restructured and its former managers are under investigation.
Ninh Thuan authorities wsill revoke the license granted to the steel project and will call for other investors to replace Lion Group.
Pham Huyen
sggp
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