Photo: Duc Anh
Quang Ngai People's Committee decides to revoke license for long-delayed $4.5 billion project.
Authorities in central Quang Ngai province are to proceed with revoking the license of a long-delayed Taiwanese steel project.
Mr. Le Van Dung, Deputy Manager of the Dung Quat Economic Zone in the province, confirmed with VET that the Provincial People’s Committee has decided to revoke the license granted for the Guang Lian Dung Quat steel plant in 2006 due to a series of delays.
“The province will also retrieve the land set aside for the project,” Mr. Dung said.
On May 20 the People’s Committee concluded an inspection of the steel plant, which was being developed by the Guang Lian Steel Vietnam Company Limited, determining that its license would be revoked.
The project was licensed by the government in 2006, located at Dung Quat Economic Zone and to be developed by Guang Lian’s parent company, the Tycoons Group, with initial investment capital of around $556 million.
From 2006 to 2008 the company continually sought comprehensive changes, including the name of the company, its legal representative, the land use area, designed capacity, charter capital, investment capital, and construction timeline.
In 2010 Tycoons cooperated with the E-United Company, another Taiwanese investor, to increase the project’s total investment capital to $4.5 billion and its capacity to 7 million tons. The Dung Quat Economic Zone’s Management Board later cleared the 337 ha site for the project in an attempt to support the investors, with related costs to be reimbursed.
In March 2012 the two Taiwanese investors appealed to Japan’s JFE Group for support after experiencing financial difficulties. In September 2014 JFE declined, saying the project wasn’t feasible. The Taiwanese investors then proposed authorities downscale the project by half, with investment of only $2 billion.
As at June 2015 the investors still had no financial support from banks, delaying the project further. Initial costs, they reported, had totaled $42 million by the end of 2014, including nearly $8 million for the site clearance conducted by the province.
The People’s Committee held many meetings to discuss terminating the project, reclaiming the land and liquidating assets.
As at the end of 2015 the Dung Quat Economic Zone had 129 licensed investment projects with total registered capital of more than $10 billion, including 26 foreign projects with capital of $4 billion. Seventy-nine enterprises are now in operation.