NSC bidder asks for tariff wall

Government must first put in place continued tariff protection for intermediate steel products to attract serious investors in the National Steel Corp. (NSC), a prospective bidder said yesterday.

According to one of the three interested bidders for NSC, without the tariff protection, investors will not be willing to risk their money on NSC.

For one, the bidder pointed out, NSC has been mothballed for the past three years and "would need an immediate outlay to restart its rusty plant."

Investors are also aware of the difficulty in lobbying for tariff protection while NSC gears up to regain its competitiveness, the bidder said.

The NSC had petitioned the Tariff Commission for continued tariff protection for imported steel billets and cold and hot-rolled coils. Steel billets are currently slapped a three-percent tariff.

Under the soon to be implemented Common Effective Preferential Tariff (CEPT) program of the Asean Free Trade Agreement (AFTA), ASEAN members are supposed to drop their effective tariff to between zero and five percent starting Jan. 2003.

With the lowering of the tariff walls, industry sources said, that cheap imported steel is expected to come in.

The NSC argues that while it is currently not in operation, it is still considered a local producer of steel and would, thus, face unwanted competition from cheap imported steel once it resumes operation.

Three parties submitted formal bids for NSC last year, these were Allengoal Steel, Cathay Pacific Steel Corp. and Voest Alpine.