VietNamNet Bridge – The Ministry of Planning and Investment has said there is no need for a special economic zone (SEZ) for steel and iron industry as proposed by Hung Nghiep Formosa Ha Tinh Steel Company.

The ministry has disapproved of the Taiwanese-invested company’s proposal for setting up an SEZ in the central province of Ha Tinh so as to enjoy the most preferential incentives ever.

In a document signed by Deputy Minister Nguyen Van Trung for submission to the Government Office, the ministry makes clear its position on the proposal.

The ministry said the SEZ establishment and its management board under management of the Government Office as proposed by Formosa are unprecedented and unnecessary as the Vung Ang Economic Zone Authority is a competent authority able to resolve issues related to Formosa’s project implementation.

On top of that, the ministry has proposed the Government set up an interdisciplinary working group to support the execution of Formosa’s project.

With the aforesaid reasons, the ministry said it is not necessary to establish a SEZ for steel and iron industry as suggested by the company.

Earlier, the company wrote to Deputy Prime Minister Hoang Trung Hai seeking approval to set up Vung Ang steel and iron SEZ, according to a news report by Hai Quan (customs) newspaper. To translate this proposal into reality, the company would build a deepwater port to serve production, a protection mechanism for the steel industry, tax exemptions, and a land allocation scheme that will benefit 15,000 staff, or 60,000 people if their relatives were included.

The ministry said in the document that Formosa has been provided with the highest investment incentives in terms of import tariffs on machines, equipment and materials and land lease among others for a project located in an economic zone.

Asked by the Daily about Formosa’s SEZ proposal, a number of experts are skeptical about it. This proposal came after Formosa suffered damage due to worker protests against China’s illegal deployment in mid-May of Haiyang Shiyou-981 oil rig deep inside Vietnam’s exclusive economic zone and continental shelf. In the aftermath of the incident, the Government has extended great policy support for the company.

Veteran economist Le Dang Doanh described the proposal as abnormal and unsuitable to the current legal framework of Vietnam. “…it seems that ‘give him an inch and he will take a yard’. Vung Ang actually has some difficulties but it is not a reason for the Government to accept any proposals from investors easily.”

Another high-profile economist Pham Chi Lan said when the investor enters Vietnam, it must accept that its project is normal. It is unusual to turn its investment venue into a special zone, she said.

Formosa’s steel and iron complex project is expected to commission the first phase in 2015 with total capacity of around 22.5 million tons a year.

Source: SGT