MoIT to suggest solutions for restarting $400 million project to the government by July 1.
Prime Minister Nguyen Xuan Phuc has assigned the Ministry of Industry and Trade (MoIT) to review a stalled $400 million steel project in northern Thai Nguyen province and prepare plans to sell it and mobilize capital if necessary.
MoIT must determine the possibility of negotiating with the Chinese partner over the completion and operation of the factory. It must then propose plans and report to the government before July 1.
The Thai Nguyen Iron and Steel Joint Stock Corporation (Tisco), the investor of the project, said that total investment in its expansion’s second phase stands at up to VND9.03 trillion ($405 million), a figure based on calculations by the Vietnam National Construction Consultants Corporation (VNCC), examinations by the Institute of Construction Economics, and provisional pricing from MCC, the project’s contractor.
The project is eight years behind schedule and was to restart in April but didn’t.
Deputy Minister of Industry and Trade Cao Quoc Hung said that the government has recently adopted robust guidance on resolving difficulties facing projects but restarting this project has remained troublesome.
Tisco has spent VND4.565 trillion ($204.8 million) to date and pays interest of VND30 billion ($1 million) each month. Chairman of the Thai Nguyen Provincial People’s Committee Vu Hong Bac is also concerned the project will never get off the ground.
If it comes to an end 6,000 workers will be jobless and hundreds of enterprises will be impacted, as will the province.
Prime Minister Phuc said in April that the government will not provide support to save bad projects.