Steel projects lag behind schedule
Several big-scale steel projects are dragging their feet, mostly because of weak financial capacity of investors and contractors, the Ministry of Industry and Trade said in a report.
In its report, the ministry named six projects that are years behind schedule, including some billion-dollar projects.
The Taiwanese-invested Guang Lian project in Quang Ngai Province’s Dung Quat Economic Zone has undergone changes in both capital and scale, but the investor has yet to step up execution. Its annual designed output has been scaled up to seven million tonnes from the previous five million tonnes, while its invested capital is to be increased by half to $4.5 billion.
However, the revised project has not been licensed due to concerns from local authorities over the investor’s financial capacity.
In fact, the Taiwanese investor E-United has had its license amended four times, but little construction has been done so far, according to the ministry’s report.
For the Ha Tinh Steel Complex, which has annual designed output of five million tonnes and requires a total of $5 billion, the progress is limited to talks on site clearance and compensation.
The ministry said Indian investor Tata and its Vietnamese partner are still clearing hurdles over site clearance while seeking a license from the provincial government of Ha Tinh.
Locally-owned projects are also moving slowly.
The project to tap 10 million tonnes of iron ore a year at Thach Khe in central Ha Tinh Province has almost stalled as the investors have failed to contribute their capital.
The ministry said the project requires chartered capital of 2.4 trillion dong and the total invested capital of 10.4 trillion dong, but the investors have contributed hundreds of billions only.
The two key stakeholders in this project are the national coal corporation Vinacomin and Ha Tinh Trade Corporation. Meanwhile, the project to upgrade the Thai Nguyen Steel Complex for the second phase could hardly be put into operation this year as scheduled because of the poor capacity of the Chinese contractor.
This project aims to boost the annual output of the complex by 500,000 tonnes of steel materials a year, and costs 3.84 trillion dong.
According to the ministry, current domestic steel consumption is equivalent to only 50-60 percent of annual production, so when large-scale projects are put into operation, there will be greater oversupply.
SGTT
Tags: Vietnam steel industry, Vietnam steel market, Vietnam steel prices