Taiwan’s Hung Nghiep Formosa Group is calling on the Vietnamese government to give extra incentives to its US$16-billion steel project in the central province of Ha Tinh.
The investor has asked for a removal of a 15% limit on loans given by banks for the project, saying that this will help facilitate its capital mobilization.
Hung Nghiep Formosa will implement the first phase of the project in three years with an investment of US$8.9 billion, with US$6.2 billion expected to be sourced from banks. Therefore, the exemption is very important to the group, it noted.
The Taiwanese firm has expected the exemption for 10% withholding tax as well as import tax of materials, while seeking the Vietnamese government’s support for its forex balance.
An official from the Vietnamese Ministry of Industry and Trade said Formosa’s steel plant is just a large-scale FDI project, not a national key one, adding that if the local government accepts the group’s requirements, it will establish the precedence for other FDI enterprises.
Lawyer Tran Dinh Hien from the Hanoi Bar Association said the local government cannot revise its regulations and laws for Formosa’s illegitimate demand, noting that companies have to use foreign currencies from exports for its forex balance, not depending on the government.
Vietnam has to keep the lending limit to ensure safety for local banks in case of businesses’ risks, Hien emphasized.
Licensed in June 2008, Hung Nghiep Formosa kicked off construction of the steel plant one month later, but, is implementing the project at snail pace.
Earlier, Malaysia’s Lion Group asked the Vietnamese government for protecting its products from Chinese rivals when the US$9.8-billion steel plant in Ninh Thuan province comes into operations. However, the government has turned down the proposal which is against its commitment to the WTO, saying that it will revoke the license of the project soon due to the investor’s limited financial capacity. (vietnamnet.vn)
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