Taiwanese investor Formosa said it is considering raising the investment in its industrial complex in the north-central province of Ha Tinh to US$28.5 billion from the current $10.5 billion in an effort to make it the largest foreign direct investment project in the mining sector in Vietnam, local media reported.
The additional capital, some $18 billion, will be released once the first phase of the project, a steel complex and other facilities, is finished, news website VnExpress reported, citing a report from local officials.
The first phase of the project with a capacity of 10.5 million metric tons of steel a year was initiated in 2011.
The Taiwanese plastics giant disbursed $2.7 billion in the first nine months of this year, bringing the total investment in the project, which also includes a port and a thermal plant, to $9.5 billion, VnExpress said, citing the report of the People's Committee of Ha Tinh.
The proposal to raise the level of investment in the steel complex with an annual capacity of over 22 million metric tons, a deep-water port that can handle ships weighing up to 300,000 metric tons, and a 2,100MW power plant, was first mentioned by Formosa in 2013, but was rejected by the central and local authorities.
Should they get the green light this time, Formosa Ha Tinh will be the largest foreign mining project in Vietnam, surpassing a huge petrochemical project in the south-central province of Binh Dinh.
Thailand-based energy firm PTT Pcl and a new investor from Saudi Arabia completed a feasibility study late last year for the mammoth refinery and petrochemical complex.
The investors of the project, to be located at the Nhon Hoi Economic Zone in Binh Dinh, have reduced its capacity to 400,000 barrels of oil products per day, or 20 million tons a year, from the original 660,000 a day in the previous report.
The estimated investment in the complex was also lowered to $22 billion from $28.5 billion.
In March, Prime Minister Nguyen Tan Dung agreed to maintain an investment term of 70 years for the Formosa-owned project in Ha Tinh Province following a suggestion by the Ministry of Planning and Investment, Minister and Chief of the Government Office Nguyen Van Nen said on the sidelines of a monthly government press conference in Hanoi.
The decision came after the Government Inspectorate of Vietnam alleged that Formosa Ha Tinh was offered illegal incentives, as in accordance with the Investment Law of 2005, the maximum investment term for a foreign-invested project is 50 years, and this term may only be increased to 70 years in exceptional cases and should be approved by the government.
According to the Government Inspectorate, it was inappropriate that the province had granted a 70-year investment license to the company without the central government's permission.
The local People's Committee, Department of Planning and Investment and the management board of the Vung Ang Economic Zone, where the project is located, was also held responsible for the oversight.
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