According to information obtained by Tien Phong PV, the proposed plan is to terminate the EPC contract with the contractor, China Metallurgical Science, Technology, and Trade Corporation (MCC). Vietnam will complete the remaining unfinished portion of the project.
Accordingly, the Vietnam Steel Corporation will agree with the partner on the contract termination plan, clarifying the obstacles as well as the components of the project that the contractor has not completed.
TISCO 2’s equipment has rusted over the years. Photo: Nguyen Bang
The control center of the TISCO 2 project, once considered modern and the heart of the plant, will be replaced entirely as it is outdated compared to current steel manufacturing technology.
Since March 2024, the two sides have jointly conducted an inventory of thousands of equipment and materials being stored, with the witness and participation of an independent consultant. Many pieces of equipment will need to be replaced due to their obsolescence after the contract termination, according to sources.
Previously, to prepare for the comprehensive inventory of the sealed project’s equipment, TISCO invited VinaControl consultants to work with the MCC contractor to unify the trial inventory of the blast furnace fan equipment.
Regarding the revival potential of the Thai Nguyen Steel Stage 2 project, a steel industry expert shared with Tien Phong PV that with the current capabilities of Vietnamese engineers, the project owner could complete and operate the project independently without the involvement of the Chinese contractor.
According to this expert, the project could be revived with debt restructuring and supportive policies and mechanisms.
“Similar to the projects of the Vietnam Chemical Group, the early completion of the project and efficient operation, combined with the favorable upward trend in steel prices as seen recently, could lead to effective project operations and gradual loss reduction,” the expert assessed.
The TISCO 2 project was inaugurated in September 2007 with a total investment of VND 3,843 billion, and the project duration was until the end of 2014.
In May 2013, the Chairman of the Board of Directors of TISCO decided to approve an adjustment to the total investment capital for the project to over VND 8,104 billion (an increase of VND 4,261 billion) and halted its implementation until now.
According to information obtained by Tien Phong PV, in May 2021, the Thailand Steel Joint Stock Company (TISCO) also sent a written proposal to the competent authorities suggesting the resumption of the stalled Phase 2 expansion with a commitment to make the project effective after a few years.
According to the proposal of TISCO’s leadership at that time, to restore the Phase 2 project, the company could take charge and hire people to operate the coke plant first.
The amount of coke produced by the Phase 2 coke plant would be sufficient to supply TISCO’s three current rolling mills. This plan would help the Phase 2 plant reduce production costs by about VND 300 billion per year.
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“In a recent development, Vietnam Steel Corporation has submitted its final proposal to the State Capital Management Committee and the Government for the resolution of the expansion project of the Thai Nguyen Iron and Steel Corporation (TISCO 2) plant’s second phase.”
