Steel investment through preferential interest only

According to many experts, the level of management, technology, infrastructure, cost ... in VN current difficult investment profitable steel. Investors poured funds into this crisis primarily by profit 'run' preferences later.

Flee because there are incentives

Last week, the People's Committee of Quang Ngai province, the official decision-making crisis recovery project of Tycoons Steel (Taiwan) at Dung Quat. This project is licensed since 2006, with initial registered capital of more than $ 1 billion. Then, the project is raising its capital to 3 billion and $ 4.5 billion in 2012 as more new investors as JFE Group. Together with the capital increase, the project, investors are constantly demanding to be entitled to incentives from land, electricity, water, taxes ...

Only when the government says "no" to the demands of excessive incentives such as the budget does not agree to continue to spend money compensate additional land; only 10% agreed to reduce the corporate income tax for 15 years, not completely free of taxes for a lifetime project ... then the investors have withdrawn from the project. In a written reply Inspectorate Quang Ngai province in November 6.2015, the investor has admitted based on market prices as well as the current iron and steel in the future 5-10 years, showed that the project is not effective Feasibility. Therefore, they propose not to continue promoting the project.

Not only foreign business people to walk away, local businesses are similar. At the plant expansion project Taiyuan Steel (TISCO), with the desire to 8.000 billion at this project from that dilemma after pouring in more than 4,500 billion, but unknown completion date, Corporation VN steel company has no fewer documents sent to superiors ask a lot of credit incentives, tax ... this is MOIT sympathy and regard it as a necessary condition for effective project economics. Specifically, in January 3.2016, the Ministry of Trade and Industry has also agreed to propose to the Government a special variety of mechanisms such as tax exemption contractors 133 billion; excluding the import duty equipment used in construction phase estimated remaining approximately 65 billion; for value added tax portion was refunded more than 330 billion, also would not now calculated in the total investment structure.

Steel investment through preferential interest only - Photo 1

... So there are incentives that type of investor Formosa boldly announced new investment in the steel industry crisis amount. Otherwise, the excess steel crisis in the world today, not any wild enterprises that pour capital into this sector

Steel investment through preferential interest only - Image 2

Dr. Bui Trinh, economic experts

Besides, TISCO Bank also proposes freezing the principal debt, interest-free 100% during the month to stop construction from 7.2012 - 3.2016 in the amount of hundreds of billions.

Red carpet with taxpayer money

Under the policy of the current investment, the larger the project, the more incentives. That's why a lot of investors still boldly declared crisis when capital investment in the steel industry. Despite claiming large capital investment but not all at once several billion or tens of billions of dollars.

However, the benefits they are entitled to be right from the start of the project. "They claim numbers in order to profit from the crisis is of such preferential terms. They also said that their investment phases, but the truth is just profiteering policies," said association leaders and calculates Steel: In many industrial park south of Phu My, Ba Ria-Vung Tau is home to many businesses steelmaking, rent was 70 USD / m2 in 50 years time. With a large steel projects such as Formosa, separate ground area of ​​2,000 hectares, the land rents of up to $ 140 million. A number that is not always possible unit spent. But overall Formosa pay land rent and water surface in 70 years is 4.45 million as incentives.

Economic expert, Dr. Bui Trinh also said: "The project announced large investments in order to receive incentives is almost a given. In other words, because of the type of deals that the investor Formosa boldly announced new investment in the steel industry crisis amount. Otherwise, the excess steel crisis in the world today, not any wild enterprises that pour capital into this sector. "

Economic expert Pham Chi Lan analysis: "In a very narrow perspective on natural resources and energy, invest in a project in the seaside, in the lack of water, the water project to remove some of the people. The water supply project is the construction services of students, which is invested by taxpayers' money contributions stars can get a red carpet welcome to buy now? Or talking about electricity use. Currently VN is lack of electricity, to buy electricity abroad, the state must subsidize. But also subsidized by taxpayers' money. Now licensed investment meant to benefit businesses in electricity prices. Not to mention also the substation also invest taxpayers' cash to serve the business needs of the enterprise ".

Prof. Dr. Luu Duc Hai, Department of Environment (University of Natural Sciences - National University of Hanoi), said the oversupply of steel in the world originates from China is creating pressures lead to trade protectionism in the developed country. Excess pressure leads to a reduction in selling prices and the state of the plant and technology from Chinese steelmakers. This is the common economic rules. In this context, the licensing of steel projects that completely ignore the sustainable development strategy of the country. Because of the inevitable trend out of subsidies will have environmental resources resulted in abnormally low electricity prices VN today.

 

Chi Hieu - Mai Phuong - Chi's