Vietnam Province Cautious about Taiwanese Firm’s $2.5 Billion Project

Tuan Minh

18:01 24/06/2016

BizLIVE - The Vietnamese central province of Ha Tinh has not given final approval to a $2.5-billion project put forward by a Taiwanese company.

Vietnam Province Cautious about Taiwanese Firm’s $2.5 Billion Project

A view of the Vung Ang Economic Zone. (Photo:

The government of Ha Tinh province, which houses Formosa’s controversial steel mill, has asked its agencies to look into a project worth $2.5 billion proposed by Taiwan’s Wei Yu Engineering Co., Ltd., and report back by June 30, 2016.
Mega Project in “Fish Death” Zone
According to the Taiwanese firm’s proposal, it wants to invest up to $2.5 billion on an area of 1,000 hectares in the Vung Ang Economic Zone. Of the amount, $1 billion will be funneled into a breeding and food processing project and the rest will go to a seaport.
The Taiwanese firm’s project includes 16 agricultural areas to raise pigs and poultry and cultivate veggies, and the construction of docks coupled with logistics areas. The company also plans to build an animal feed plant and factories to process cooking oil, meat and frozen food.
In addition, Wei Yu Engineering proposed building houses to accommodate its experts and engineers on an area of 80 hectares.
The firm has asked for permission to build the remaining five docks that were meant for the Vung Ang Economic Zone.
According to the provincial Department of Planning and Investment, the mega project will use high technology and employ many laborers, in line with the province’s guidelines. There are enough land funds for the firm to proceed with its constructions.
However, the firm needs to provide detailed measures to protect the environment, said the department.
Tran Tu Anh, director of the department, was quoted by the Ministry of Information and Communications-run Infonet newspaper as saying that the local government has not made any decision on this project as it is under study.
With its cost amounting to $2.5 billion, the project will need endorsement from the prime minister, he noted.
Opposition Voiced
Wei Fu Engineering’s proposal comes in the context Formosa Ha Tinh Steel Corp, a subsidiary of also-Taiwanese Plastics Group, being suspected of having discharged toxins into sea waters through an undersea pipeline, resulting in en-masse deaths of fish and deep-water species.
A large number of domestic and foreign experts have made investigations to find out what happened. The cause has been found but the Vietnamese government said cannot be publicized now as it needs independent commentaries.
Pham Sy Liem, vice chairman of the Vietnam Construction Association, told the Giao Duc said that interests and environmental consequences should be taken into account when calling for investment.
“Before granting a license, Ha Tinh authorities should consider the motivation of the [Taiwanese] investor. They don’t choose that location for simple reasons,” Mr. Liem told the Giao duc Viet Nam newspaper.
Many countries “export” pollution to offshore destinations through investment, thus the “adverse sides” of those investments need to be studied thoroughly.
“Such large-scaled projects should be submitted to the National Assembly for consideration and involved agencies such as the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, the Ministry of Construction, the Ministry of Natural Resources and Environment and the Ministry of Defense need to step in to assess the effectiveness and other issues related to environmental pollution, security and defense,” Mr. Lien noted.
Major general Le Ma Luong, former director of the Vietnam Military Museum, said that the country needs to take caution about the projects disguised in economic purposes that can harm the national security.
“Vung Ang is home to one of the most important ports in Vietnam. This is also a strategic and sensitive location in the country’s defense,” Mr. Luong commented, urging prudence when licensing projects.
“It’s of extreme importance not to swap the country’s security for short-term economic interests at any costs or under any circumstances,” the general added.
Taiwanese investors have flocked to this zone over the past years. Formosa Group has put $10.5 billion in its steel mill there and plans to raise the investment to $28.5 billion.
In the first five months of 2016, Taiwan was the fourth-largest investor in Vietnam, with $845.5 million, accounting for 8.3% of total foreign investments in the period, according to data of the Foreign Investment Authority under the Ministry of Planning and Investment.