HANOI: In a bid to break a four-year deadlock involving Tata Steel's $ five billion project, Vietnam has soughtfinancial assistance of $ 100 million from India towards payment of land compensation cost.

"Government of Vietnam has requested Indian government to assist by giving $ 100 million for site clearance for the project," Vice Minister of Industry and Trade of Vietnam Le Xuan Quang said.

The project has been stalled after the provincial government estimated the acquisition cost at $ 200 million for around 4,000 acres of land, an amount Tata-Steel was not happy with and refused to pay.

This resulted in Indian business giant not receiving the investment license for its 4.5 million-tonne steel plant at Vung Ang Economic Zone in Ha Tinh province.

The issue has also been taken up by at the highest level by Prime Minister Manmohan Singh, External Affairs Minister S M Krishna and Former Finance Minister Pranab Mukherjee.

Sources close to the project said the land cost asked from Tata is very high as compared to what has been taken from Taiwan-based Formosa group to set up a steel plant in the same province.

When pointed out that Vietnamese government was paying part of the land compensation for the land given to Formosa group, Quang said the country has been affected by the global economic slowdown and it does not have money for site clearance for the Tata-Steel project.

"Vietnam has also been affected by global economic crisis and we do not have money for site clearance (for the Tata project). We have requested Tata to pay the money," he said.

"Our government is very active in addressing the pending issues between Tata and local authorities," Quang said but warned that further delay in finalising the land compensation may result in increase in land acquisition cost.

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