by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Wednesday, 12th February 1992:
DAP calls on the Minister of International Trade and Industry to explain the details of the Investment Guarantee Agreement which the Taiwan authorities are demanding before proceeding with the $8.6 billion China Steel Corporation joint venture steel plant in Malaysia
Last Friday, the Minister for International Trade and industry, Datuk Seri Rafidah Aziz, said that she had written to her counterpart in Taiwan and is awaiting a clarification from the Taiwanese government on the status of the China Steel Corporation’s proposed $8.6 billion joint venture steel plant in Malaysia.
A week earlier, the China Steel Corporation’s (CBC) vice president, Tsou Jo-Chi, was reported as saying that its proposed $8.6 billion steel plant in Malaysia was definitely on but its implementation would be delayed by six months.
Tsou said that under the original plans, works such as the land survey, final evaluation and basic structural set-up should have been started by now. However, they have been put on hold for over the last six months as the Taiwan Parliament was conducting a final study on the project.
Tsou denied Taiwan newspaper reports that the project had been scrapped. He said the CSC had not received any directive on the cancellation of the project either from Taiwan’s Parliament or from the company’ boards of directors. He said CSC was confident that the project would get off the ground, and that plans pertaining to the project have already been compiled and submitted to the Taiwanese Government for approval.
In an interview from Kaosiung, Taiwan, Tsou said: “Moreover, there is already positive indication that the Malaysian Government will sign an investment guarantee agreement (IGA). We have heard that our Ministry of Trade has received a proposal from Malaysia recently and is studying it.”
DAP calls on the Ministry of International Trade and Industry to state the details of the Investment Guarantee Agreement (IGA) which the Taiwan authorities are demanding before proceeding with the proposed $8.6 billion joint venture steel plant in Malaysia.
The Ministry of International Trade and Industry should state whether the demands of the CSC for the establishment of the proposed joint venture steel plant in Malaysia, and for inclusion in the IGA between the two countries, include the following:
1. Approval for pioneer status for 10 years;
2. Infrastructure support, including land leasing, construction of a port within four years, road, adequate and electricity supply, etc;
3. Instituting 35 per cent import tariff rates on those steel products produced by the joint venture steel plant;
4. Easing certain critical financial regulatory measures, such as maintaining a foreign currency account, easing restriction on export credit refinancing scheme, lifting maximum loan limitation and single customer limit, allowing offshore multi-currency loans and suppliers credit financing schme, and tax-free repatriating of dividend, capital and fees, etc.;
5. Government guarantee on foreign loans;
6. Expatriate personnel programme;
7. Soft loan from the Government to the joint venture steel plant to demonstrate the Government’s support;
8. No new manufacturing licence to any other integrated steel mill for the next ten years;
9. Granting ‘A’ licence for lorry operation; and
10. Limestone quarry.
According to Taiwanese investors, who have become the biggest foreign investor in Malaysia in 1990 and 1991, the China Steel Corporation problem underlines deeper problems arising from complaints from Taiwanese investors that Malaysia had failed to fulfil the promises of cheap skilled labour, low land prices and tax incentives which the Malaysian Government had made to lure Taiwanese investment to Malaysia.
DAP calls on the Ministry of International Trade and Industry to clear the air over these complaints by Taiwanese investors in Malaysia