Venezuelan national iron and steel industry has advanced 17% in six years

The Venezuelan government has cherished a new iron and steel industry. As a matter of fact, quite a few times President Hugo Chávez has included it among his government's key projects. Nevertheless, more than six years later, only 17% of the work in process has been carried out.

Based on the information supplied by the Venezuelan government to the US Securities and Exchange Commission (SEC) in the annual management report, by September 2012, the project on the National Steel and Iron Social Production Enterprise "was completed approximately at 17%."

A review of the report of the National Steel and Iron Social Production Enterprise found that although the project began in August 2006, the progress is mainly on paper.

The accomplishments in 2011 put "conceptual and detailed engineering of the project on the iron and steel industry 100% completed." This encompassed the project engineering, related services, core equipment, civil works and infrastructure.

Manufacturing of "critical equipment" made great progress at 61%. Notwithstanding, procurement of the equipment, stored in Germany, was carried forward to 2012. The required lending from European banks to pay USD 373 million had not been gotten yet.

In addition to the manufacturing of equipment and engineering advance, some other issues, such as earth works, the environmental survey and others had been effected at 50%-90%.

While these numbers seem encouraging, the general project has advanced 17%.

A lot to do

A review of the 2011 annual report helps understand the reason for the small progress, as most physical works had not been carried out. It has been slated to continue with civil works, as well as to build the camp for the contractors of civil works and the administrative buildings.

Likewise, the blueprint also includes contracting to manufacture the steel production and plating equipment, the industrial water treatment plant, a powerhouse, contracting of cranes, gas pipeline and aqueduct, among others.

Taking into account data supplied to SEC, the project has some more than one year to advance 83%; based on the initial planning, the work should be completed by December 31, 2013.

Funds availability is among the reasons for the progress status of the work.

"Management was adjusted to the availability of budgetary and financial resources to execute the national portion of the project," reads the company report of 2011.

Major advance

The Ministry of Industries is responsible for building the National Iron and Steel Complex. Last week, much headway was made with six plants, following takeover of Siderúrgica del Turbio (Sidetur). The company had been expropriated in 2010.

Minister of Industries Ricardo Menéndez recently said that the plants form part of the new Iron and Steel Complex.

Translated by Conchita Delgado