Posted on 09 Dec 2016
The Vietnam Steel Association (VSA) has reminded the Ministry of Industry and Trade that the State would no longer manage the steel industry with any master plan if the Planning Law was voted through and put into force in 2018. Regarding the current practices, a steel project cannot be approved if it is not named in the master plan for the industry.
As per the draft Planning Law submitted to the National Assembly (NA), the steel industry and many others will no longer be governed by planning but by other laws like the Enterprise Law, the Investment Law, the Law on Quality Standards and the Law on Environmental Protection, VSA said in a written comment on the draft planning for the steel industry until 2025, with a vision to 2035.
This planning, therefore, will only serve as a reference before investors make their decisions. Also, the issuance of investment certificates will be done according to the opinions of the relevant ministries, not just the Ministry of Industry and Trade.
The draft Planning Law stipulates that only 21 industries need national planning for their use of marine resources and large-scale infrastructure. For most of the other industries, including steel, the industry ministry is no longer responsible for doing the planning.
This draft law has been widely discussed by the NA since September, with most opinions against the planning for the steel industry, yet the industry ministry has still drafted planning and gathered opinions.
Foreign investors should not be invited into the projects to produce normal steel products whose supply is redundant. Instead, they should be encouraged to invest in the production of alloy and high-quality steel, says VSA in the written comment signed by Vice Chairman Nguyen Van Sua.
Currently, domestic investors are capable of developing large-scale steel complex projects. Foreign investors already account for a high proportion in the steel industry, so there is no need to call for others, VSA states. The steel association also notes that it is a major shortcoming of the industry ministry to adjust the planning without setting an aim for the development of hot-rolled and high-quality steel, almost 100% of which Vietnam has to import at the moment. Meanwhile, many projects of construction steel and steel billets are still conceived.
VSA also pointed out other faults in the ministry’s draft planning. Remarkably, in this draft planning, a mammoth project for “expansion of the second phase of Thai Nguyen Steel Factory”, which has made losses and remained inactive, is listed as “no investor”. This is incorrect since it is a project of Vietnam Steel Corporation and other shareholders.
VSA proposes this project should be thoroughly handled and similar projects that have yet to get going should be eliminated, including several other infeasible projects slated for 2017-2025.
