The construction site of Guang Lian Dung Quat Steel Mill in the central province of Quang Ngai. Photo credit: baodautu.vn
The fate of a multi-billion dollar steel mill project is now uncertain after its Taiwanese investors struggled to raise money for it, following several adjustments to the construction plan the past decade.
Guang Lian Dung Quat Steel Mill's investors have confirmed with local agencies about their funding problems, nine years after the project was licensed, news website Tuoi Tre Online reported on Thursday.
As of last June, Quang Ngai authorities had spent VND223 billion (US$10.21 million) on compensation to residents relocated for the project, according to the news report. Two-thirds of the site has been cleared.
Meanwhile, investors have spent around $42 million building initial structures for the construction, news website Saigon Times Online reported.
The project was initially proposed in 2006 by Taiwanese-owned Tycoons Vietnam Co., Ltd with a cost estimate of over $1 billion, aiming to produce five million tons of steel a year.
Soon after that E-United Group, a steel conglomerate also from Taiwan, jumped in, increasing the factory's investment to $3.3 billion without changing its designed output.
E-United contributed 90 percent of the projected cost and the rest from Tycoons.
In 2011, the investors asked for permission to raise both the cost and capacity of the factory, but authorities rejected the request, saying the investors failed to prove that they could provide enough funding.
The next year Japan's JEF Steel Corp. showed interest in the project, but backed out after studying its feasibility for two years.
After that, E-United proposed to cut the project's investment to $2 billion.