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Steel project faces the axe

Update: June, 06/2015 - 10:21
Dung Quat Economic Zone in central province Quang Ngai has asked Guang Lian Steel Vietnam Co. Ltd to prove their capability to continue their investment in its steel project. — Photo vov

QUANG NGAI (VNS) — Dung Quat Economic Zone in central province Quang Ngai has asked Guang Lian Steel Vietnam Co. Ltd to prove their capability to continue their investment in its steel project.

If the company fails to prove its financial capabilities before the end of June, then the province will withdraw the investment certificate awarded by the Ministry of Planning and Investment to Guang Lian steel project on September 8, 2006. The decision comes after the company delayed investment processes many times and could not arrange the capital required.

Nguyen Pham Trong Nghia, head of Investment Promotion and Management Section, told Viet Nam News that the zone's management board had not received any feedback from the investor, though all documents were sent to them long ago.

The project was initiated by Taiwanese steel giant Tycoons, on a total investment of more than US$1 billion, in 2006. The E-United Group of Taiwan later joined the project, and the two Taiwanese enterprises raised the registered investment amount to $3 billion.

At the beginning of 2012, Japan's second largest steelmaker JFE Group signed a memorandum of understanding to conduct a feasibility study on the project with the E-United Group, which has a 90-per cent stake in the project.

However, after two years of studies, the Japanese enterprise cancelled its investment in the steel project. The E-United Group took over the study and reduced the investment amount to $2 billion.

Since its ground-breaking ceremony in 2007, the investors have put in about $42 million in constructing some work facilities such as house blocks for workers, walls, and pile driving. — VNS


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