Doubts are hanging over Guang Lian Steel
Company’s $4.5 billion steel manufacturing project.
A year after the government approved the investor’s proposal for investment expansion from $3 billion to $4.5 billion, Quang Ngai People’s Committee has not yet granted an amended investment certificate for this project and the Taiwanese-Thai joint venture has not yet shown the financing endorsement from bankers.
A Dung Quat Economic Zone Management Authority
source said the provincial authority wanted to see the investors’ strong
commitment and financial ability before granting the certificate.
The request implies doubt over the project
after Guang Lian Steel Company had delayed construction for four years, from
2006 to 2010. Last year, Vietnam Steel Association also raised doubts over the
investment expansion, describing the proposal as a tactic to delay the project.
If the certificate is granted, Guang Lian
Steel Company will have another four years to build this plant, extending the
construction timeline to eight years since it was originally licenced.
Guang Lian, firstly invested by Thailand’s
Tycoons Worldwide Group and Chinese Jian Steel and Iron Group, was licenced in
2006 with total investment capital of around $1 billion.
One year later, Taiwan’s E-United Group
replaced Jian Steel and Iron Group and took a 90 per cent stake in the project,
establishing Guang Lian Steel Company. It also increased the registered
investment to $3 billion.
A Guang Lian source said the company had
invited bankers to Vietnam to endorse the financing for the project, but the
bankers in Taiwan “want to see the amended investment certificate first”.
“It’s like a vicious cycle as provincial
authority wants to see the endorsement from bankers first while the bankers
also want to see our amended investment certificate first,” she said.
Last week, Quang Ngai People’s Committee leaders
met to discuss the certificate. However, no conclusion was revealed.
The provincial authority is scheduled to meet
with Guang Lian this month where the company’s source said Guang Lian expected
concerned issues would be resolved.
Nhu Ngoc | vir.com.vn
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