The US$16 billion complex comprising of a deepwater port and a steel mill in the central province of Ha Tinh has been delayed since its groundbreaking ceremony in July 2008.

News website VietNamNet reported Thursday that the delay was caused by slow land clearance process and financial difficulties.

According to Formosa, it needs a bank loan of around $2 billion each year for three years to complete the project. However, as local banks are not allowed to lend more than 15 percent of their capital, it’s not easy for Formosa to access these funds.

“If the project is not exempt from the rule, there will be difficulties in raising funds,” the VietNamNet report cited the group as saying.

Formosa also asked the government to help them find enough foreign currency for the project, estimated at up to $1.5 billion a year for the next three years. The Taiwanese investor also wanted tax exemptions when importing materials for the project and when it began production.

An official of the Ministry of Industry and Trade was quoted in the report as saying the project, albeit a large one, was not a “national key economic project” as claimed by Formosa.

“Businesses have the right to request for help to solve their problems, but their requests are not always reasonable,” the official said, adding that the ministry will respond to Formosa within two days.

Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association, said businesses tend to ask for a lot of things. If the government accepts Formosa’s requests this time, it would be hard to say no to other foreign investors later.(Thanhniennews.com)