Tata Steel wants end to impasse

May 07, 2012 | 09:14

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Tata Steel has offered the government a sweetener to end its five-year impasse to get its $5 billion steel project off the ground.

Indronil Sengupta, chief executive of South East Asia projects at Tata Steel, said the Vung Ang Economic Zone site clearance was still in the hands of the government and the investor had no role to play in accordance with the Investment Law.

“However, considering the present constraints, we have proactively offered an advance which is double than any one has committed to pay in this economic zone,” said Sengupta. But, Sengupta did not reveal how much Tata Steel would pay in advance to support the Ha Tinh province site clearance work.

The offer is considered a concession by the Indian firm to clear up the site clearance issue, the main obstacle holding back the project’s investment certificate. “Now it is up to the government to take a decision on the issuance of the investment certificate and the investors have nothing further to contribute. We have completed all formalities as per the Investment Law with respect to the investment certificate and had submitted many months back,” Sengupta added.

Tata Steel’s project, initially proposed in May 2007, will produce 4.6 million tonnes per year and is jointly invested by Tata Steel, Vietnam Steel Corporation and Vietnam Cement Industries Corporation, in which foreign partner committed to hold a 65 per cent stake.

However, Tata Steel and Ha Tinh People’s Committee have failed to reach a specific agreement on site clearance cost at the 725 hectare site where Tata proposed to build its project.

Nguyen Dinh Van, deputy director of Vung Ang Economic Zone Management Authority, said he had not yet received Tata Steel’s offer. “Maybe it was offered to government bodies,” he said.