Paper project phase gets wrapped up

September 12, 2011 | 22:30

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The prime minister has demanded Vietnam Paper Corporation halt implementing a second-phase Bai Bang Paper Factory expansion project.

Bai Bang Paper Factory illustration photo

The decision came as the paper corporation (VPC) inked a contract for the purchase of a used equipment line from a Finnish partner when it had yet to get the nod from state agencies.

Besides, the northern Phu Tho province’s project’s loan/ equity ratio exceeds regulated levels, while pulp and paper production are not among areas prioritised for government guarantee to source loans.

Earlier, the second-phase Bai Bang paper factory expansion plan was ratified by the prime minister to take advantage of world economic recession to source quality, hi-tech equipment from developed countries at affordable prices.

In 2006, the Ministry of Industry (now the Ministry of Industry and Trade (MoIT)) submitted to the government second-phase Bai Bang Paper Factory expansion project with an annual capacity of 250,000 tonnes of pulp and estimated investment of over VND8 trillion ($386.47 million).

Of the investment, around VND5.755 trillion ($278 million) will be pumped into equipment purchases and VND2.606 trillion ($125.9 million) put into developing material areas.

The ministry (MoI) also proposed the government act as an underwriter for the project to source foreign loans for material and equipment purchases.

Later in October 2010, response to proposals from the VPC and relevant ministries, Deputy Prime Minister Hoang Trung Hai asked the MoIT to join hands with relevant ministries to draw accurate appraisals of the paper expansion project to report to the prime minister.

By Dinh Thuy

vir.com.vn

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