Guang Lian steel project faces certificate loss

June 05, 2015 | 16:38

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Dung Quat Economic Zone in central province Quang Ngai has asked Guang Lian Steel Viet Nam Co. Ltd to prove their capability to continue their investment in its steel project.

A corner of Guang Lian steel project in Dung Quat Economic Zone in the central province of Quang Ngai. The project's investment certificate will be withdrew if the investor cannot prove their financial capability by the end of June. Photo dddn.com.vn

If the company fails to prove their financial capabilities before the end of June 2015, then the province will withdraw the investment certificate that was 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 Department, told Biz Hub that the zone's management board has 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 of $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 groundbreaking 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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