Cai Lan steel and power complex teetering on the brink of death
Cai Lan steel and power complex teetering on the brink of death
Despite having been hailed as the hope of Vietnam’s shipbuilding industry, the Cai Lan complex of a VND2.5 trillion ($112.09 million) hot-rolled steel and a VND900 billion ($40.4 million) power plant has yet to see a bright future, after its operation was delayed for six years, according to newswire Tienphong.vn.
The complex’s construction was kicked off in 2003, with the total capital of over VND3 trillion ($134.5 million), an ambitious investment by state-owned shipbuilding giant Vinashin.
The 15-hectare steel plant was designed with an annual capacity of 500,000 tonnes of steel and started test operation in June 2010, after seven years of construction. During the test run, it had an output of 5,000 tonnes of steel meeting the quality standards of the US and Norway, 3,000 tonnes of which were exported.
However, the steel plant has been left inactive after Vinashin’s corruption scandal.
Regarding the power plant, the 40MW plant came into operation in April 2007, but its operation was halted in 2009 due to financial troubles, even after managing to sell some of its output to state-run Electricity of Vietnam.
In reality, the power plant was quipped with used, low quality machinery imported from China, leading to a failure to supply enough power to the steel plant.
Previously, Shipbuilding Industry Corporation (SBIC), which was born through the reorganisation of the parent company and the inclusion of members from Vinashin, made a futile attempt to resurrect the Cai Lan complex.
As the latest development, the Ministry of Transport requested the government to assign suitable businesses under the ministry to take over the Cai Lan complex.
