The government has turned down a request from Taiwanese-owned Formosa Plastics Group for using its own fleet of ships to transport its steel products in Vietnam’s inland waterways, citing the country’s laws.
Earlier this month Formosa Ha Tinh Steel Corporation, which is building a massive plant in the north-central province of Ha Tinh, sought permission to have its own fleet of ships instead of hiring vessels from local shipping lines.
Once installation of two blast furnaces is complete, the plant would churn out 7.1 million tons of steel products annually, with around 3 million tons sold in Vietnam after being transported to Ho Chi Minh City and Hanoi, it said.
Its own fleet would help boost efficiency, it said.
Deputy Minister of Transport Nguyen Van Cong told Thanh Nien Sunday that his ministry did not approve the proposal since the laws do not allow a wholly foreign-owned company to operate transport services in inland waterways.
To do so, foreign companies need to set up a joint venture with local partners and hold no more than 49 percent.
Formosa argued that its ships would only carry its own products and so shipping companies would not be affected.
In July the government had rejected a request from Formosa for setting up its own special economic zone.
It also turned down Formosa’s other requests, like calls for a raft of safeguard measures for the steel sector, waiver of import duties on equipment and raw materials, and a large area of land near the plant so that it can build housing facilities for its 15,000 staff and their families, most of whom are Chinese nationals.
The Formosa plant in Ha Tinh became the unlikely target of anti-China violence triggered by China's illegal deployment of a US$1-billion oil rig in Vietnamese waters on May 2.
Rioters torched, looted, and vandalized the construction site.
The incident on May 14 left three Chinese workers dead and 149 others, both Chinese and Vietnamese, injured.
In July the Ha Tinh Party Unit ordered a halt to the construction of a shrine inside the Formosa site following a public outcry over the provincial government’s green light for it.
Formosa had said that the shrine would allow employees to pray for “the wandering souls whose graves were lost.”