Many new steel plants have come up in the last two years despite not being included in a Government blueprint for the industry because of loopholes in administrative laws.
On reviewing the industry’s plans for 2007-15, the Ministry of Industry and Trade discovered that licenses have been issued to 32 projects not in them.
Two of them are already up and running and three others are scheduled to begin early this year.
In contrast, only 23 projects in the plan have got licenses so far.
It found that local authorities have licensed the unplanned projects without obtaining permission from the Government because they each have an investment of less than VND1.5 trillion (US$88 million).
The Law on Investment does authorize local authorities to license metal projects capitalized at less than VND1.5 trillion.
But the Law on Construction and related documents stipulate that projects not listed in plans need to be approved by authorized agencies for licensing.
Deputy minister Le Duong Quang said the plan was drawn up a few years ago when steel prices were so low that not even the Vietnam Steel Corporation could afford to build plants.
Prices have soared since 2005 that domestic and foreign companies are eager to produce ingot steel, he said.
The installed capacity now has surged past the forecast 2020 demand of 20 million tons.
Mr. Quang said the plan’s biggest shortcomings are a lack of vision and its failure to forecast trends – it fails to take into account foreign direct investment in the industry.
For instance, Taiwan’s Fomasa and Tycoons and Malaysia’s Lion Group recently entered Vietnam and plan to produce several millions of tons of steel annually, he added.
Mr. Quang’s boss Minister Vu Huy Hoang has suggested that the Government should appraise the licensed projects and revoke inefficient ones. (Sai Gon GP)
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Thursday, February 19, 2009
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