Ha Tinh: A trillion-dollar project died, banks bitterly divided the scrap metal

The Van Loi Iron and Steel Complex has just been terminated by the Ha Tinh Economic Zone Management Board and is preparing to reclaim the project. The Development Bank (DB), Vietcombank, and BIDV (Ha Tinh branch) have naturally become 'victims' of the project.

Lending but not controlling investment

Mr. Vo Ta Nam, Deputy Director of Ha Tinh Development Bank, said that after receiving Document 647 from the Provincial Economic Zone Management Board, he is trying to contact the investor to discuss solutions but it is very difficult to contact. Especially major shareholders such as Van Loi and Hop Thanh.

“We lend (NHPT lends more than 600 billion) according to the province's appeal resolution, giving preferential treatment and creating favorable conditions for the project to be invested and operated. To be honest, the assets securing the loan are in the factory, there are many things that the investor does not know, let alone our bank.

The machinery was imported by the general contractor ECP (China). Only when the general contractor comes to install and open it will we know what has been invested. Now we have to re-audit everything to assess the value of the invested assets, and what is left after many years of abandonment," said Mr. Nam.

Steel project with total investment of nearly 2,000 billion (banks committed capital of more than 80%) has been stagnant since 2010.

Too much favor and trust, now sharing scrap metal

“We have to follow the whole process. The NHPT keeps the records. Every time the project is disbursed, the NHPT notifies the banks and contributes capital according to the committed ratio. For example, BIDV is 7%, Vietcombank is 8%. Mr. Kieu Dinh Hoa, Director of BIDV Ha Tinh, also said that this project is mainly the NHPT, other banks only contribute capital according to the ratio, BIDV has lent 49 billion VND.

The director of BIDV Ha Tinh bitterly admitted: “A dead project makes the bank die, that is the rule. To be honest, if it had not stopped, it would have disbursed more. Because the total commitment is more than 1,000 billion, only more than half has been disbursed.”

“If we were to reclaim this project now, the assets would only be scrap metal. Because the assembled parts would rust, and the unassembled parts would be lost. Furthermore, there is no general contractor, so we don’t know what kind of machinery and equipment we have. Now, we can’t buy and sell equipment anymore,” said Mr. Nguyen Huu Luc, Director of Vietcombank Ha Tinh.

Mr. Luc bitterly shared: "Now, if banks lend more than 700 billion, there is a risk of losing it. This project favors them too much. We trusted them too much, that's why this happened."

Vietnam Foreign Trade Bank, loan 70 billion VND according to the appraisal records of NHPT.

According to vietnamnet