Vietnam assures India of clearance to Tata steel project

NEW DELHI: Vietnam has assured India of early clearance of Tata Steel`s $5-billion project in Ha Tinh province. The project has been pending since 2008.

The assurance was given by Vietnamese Prime Minister Nguyen Tan Dung when finance minister Pranab Mukherjee called on him in Hanoi.

"This project has the potential to become a symbol of strategic partnership between the two countries....," he told the Vietnamese Prime Minister Nguyen Tan Dung in Hanoi. Mukherjee is in the city to attend the annual Asian Development Bank meeting of the finance ministers.

Tata Steel is yet to receive an investment certificate for its $5-billion integrated steel project in Vung Ang Economic Zone (VAEZ) in central Ha Tinh province.

The project requires about 4,000 acre of land and re-settlement cost is one of the major issues.

"The investment partnership between the two countries is limited. Though there are several small Indian investors, total Indian investment is not large ($200m), he said.

He said there should be no discrimination against Indian investment and level playing field should be provided to Tata Steel.

Mukherjee said he hoped that the issue of re-settlement cost for the land would be resolved to the mutual satisfaction of all sides and the investment certificate for the project would be issued soon.

The project is to be set up by a joint venture, in which Tata Steel holds 65% stake. Vietnam Steel Corporation holds 30% stake and the balance is held by Vietnam Cement Industries Corporation.

The finance minister expected the Vietnam government to facilitate the request of two Indian public sector banks -- Bank of India and Indian Overseas Bank — to open Branch Offices in Vietnam saying that the step would strengthen the economic cooperation between the two countries.

Mukherjee said the strategic partnership established between the two countries is based on implicit mutual trust, a convergence of interests including in the field of defence and security and similar approaches on global and regional issues.