Mercedes-Benz continues to "call for help" hoping that the project in Ho Chi Minh City will be extended before August 31

Mercedes-Benz continues to "call for help" hoping that the project in Ho Chi Minh City will be extended before August 31

Mercedes-Benz Vietnam Co., Ltd. continues to send a "cry for help" document to the Ho Chi Minh City People's Committee and hopes to have the Project extended before August 31 or within 2 weeks from the time of submitting complete documents.

Business expects resolution within 2 weeks

On August 9, Mercedes-Benz Vietnam Co., Ltd. (MBV) continued to send document No. 310/MBV/2024 to the Ho Chi Minh City People's Committee, stating difficulties and requesting the City to soon extend the land lease for the automobile assembly project in Go Vap district until 2030.

In the MBV document, it is stated that the land use term and the Project term in Go Vap district will end on April 13, 2025. The enterprise submitted a request to extend the Project on September 7, 2021.

However, for nearly 3 years, the Project has not been extended by the Ho Chi Minh City People's Committee even though MBV has provided information, data and explanations related to the Project as requested by the departments and branches under the Ho Chi Minh City People's Committee.

Car assembly at Mercedes-Benz factory in Go Vap district, Ho Chi Minh City - Photo: Le Toan

In this Project, the biggest problem in extending the land lease term is that it has not been clarified whether the Project land is subject to rearrangement according to the provisions of Decree No. 167/2017/ND-CP regulating the rearrangement and handling of public assets.

According to legal regulations , the Ministry of Finance believes that MBV's Project is subject to Decree 167 and must wait for amendments and supplements to Decree 167 to be approved to have a clearer legal basis for extending the Project.

Meanwhile, MBV believes that its Project is not subject to Decree 167, because MBV is directly managing and using the land lot at 693 - Quang Trung (Go Vap District, Ho Chi Minh City) as an independent land lessee since 2020 and paying land rent directly to the State.

Therefore, MBV expects the problems to be resolved and the enterprise to receive final approval for the Project extension and complete the procedures for adjusting the investment registration certificate and business registration certificate before August 31, 2024.

Investors believe that the August 31, 2024 milestone is extremely important for the company to have a basis to continue working with the licensor, MB AG, to be able to restart the import of vehicle manufacturing components, as well as work and negotiate with domestic partners related to all production activities, service provision and renewal of licenses such as environmental licenses, vehicle import licenses, etc.

“In case the process of adjusting the investment registration certificate and business registration certificate cannot be completed within the above-mentioned time period, we sincerely request the support of the Ho Chi Minh City People's Committee, the Department of Planning and Investment and other departments and branches so that this process can be completed within two weeks from the time the company submits all required documents,” MBV's document No. 310/MBV/2024 requested.

In the document sent to the Ho Chi Minh City People's Committee on August 9, 2024, MBV no longer mentioned the closure of the factory as in the previous "cry for help" documents sent to the Prime Minister and the Ho Chi Minh City People's Committee. Instead, the investor earnestly requested to receive support from the Ho Chi Minh City People's Committee so that the Project could be granted an extension within 2 weeks from the time of submitting a complete application.

Proposal not to re-appraise the technological chain

Also in document No. 310/MBV/2024 sent to the Ho Chi Minh City People's Committee, MBV responded to the request of the Ho Chi Minh City Department of Science and Technology to provide certificates of appraisal of machinery, equipment, and technological lines of the Project.

MBV believes that the proposal to extend the Project is an extension for an existing project, not a new project, and there is no change in scale or technological chain.

The project continues to be maintained and operated according to the current production line, which is the most advanced technology, meeting the strict global standards of the Mercedes-Benz Group and current legal regulations on science and technology, and complying with Vietnam's environmental protection laws.

Therefore, the enterprise proposes not to perform additional steps of appraisal of machinery, equipment and technological lines in the Extension Project.

Regarding land rental prices, MBV expects the land rental prices applied from 2025 to 2030 to increase by no more than 15% compared to present, which will contribute to the financial efficiency of the MBV Project's business operations during the expansion period, especially in the context of a volatile and difficult market.

Regarding the problems in this Project, the reporter of the Investment Electronic Newspaper - Baodautu.vn had to contact the legal representative of Mercedes-Benz Vietnam for the second time before saying that from the time of submitting the extension application until now, the Company maintains its position of not providing information, opinions or comments to the press or third parties related to the issue of extending the Project for many related reasons.

The Mercedes-Benz Automobile Assembly Plant project on Quang Trung Street (Ward 8, Go Vap District, Ho Chi Minh City) is a joint venture project between Mercedes-Benz Group AG (MBG AG) and Saigon Transport Mechanical Corporation (Samco).
The project has a charter capital of VND 402.5 billion, in which the foreign party is Mercedes-Benz Group AG (named Daimler AG before March 2022), contributing VND 281 billion, equivalent to 70% of the charter capital, and Samco contributing VND 120 billion (equivalent to the right to use 105,000 m2 of land), equivalent to 30% of the charter capital.
According to statistics, the total amount of tax the company has paid in the past 7 years has always been approximately 250 million USD/year and the highest tax payment threshold of 400 million USD/year is in 2022.

Source: https://baodautu.vn/mercedes-benz-tiep-tuc-keu-cuu-ky-vong-du-an-tai-tphcm-duoc-gia-han-truoc-318-d223152.html