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Ministry mulls sinking $1.8 bln into loss-making shipping line
Although most of the vessels in the ship fleets of theVietnam National Shipping Lines, or Vinalines, have been operating inefficiently, the Ministry of Transport plans to pour in another VND100 trillion, or US$1.8 billion, to “modernize the fleets” by 2020.
The ministry proposed an industrialization and modernization plan that included a two-phase investment into the state-run shipping giant, despite having many vessels reporting losses, being left unused, or being detained in other countries.
During the first phase, between 2012 and 2015, Vinalines will receive VND30 trillion to build and purchase 67 new vessels. In the next five years, the figures will rise to VND70 trillion, and 95 new ships.
The ministry also set a goal to increase the total loading capacity of its shipping fleet to 15 million tons, with the fleet consisting of all kinds of international-standard transporting vessels.
Vessel becomes scrap
One of the most typical loss-making vessels of Vinalines is the Song Gianh ship, which has been left exposed to harsh weather in Ho Chi Minh City’s Nha Be District for years.
The 183-meter long, 25-meter wide vessel, whose entrance is now rusted, was launched in October 2006 by shipbuilder Nam Trieu Co with a loading capacity of 40 barges, each with an individual capacity of 200DWT (deadweight tonnage).
In February 2008, the $19.2-million Song Gianh ship was transferred to Vianshinlines, a subsidiary of Vinalines, and soon became a good for nothing giant.
There is now only one vice captain and four crewmembers left to take care of the ship.
“Our job is to protect the ship from burglars, cook, and play cards,” said sailor Hoang Dinh Long.
“The ship has been docked dormant for years and there is not yet any bright sign for its future.”
In fact, the only journey this ‘dead ship’ has ever made was transporting coal from northern Quang Ninh province to HCMC four years ago.
The ship earned VND1.8 billion from the trip, but the expense was more than double this meager profit.
“All machinery has broken, and the ship is now only home to mosquitos,” said vice captain Nguyen Van Thinh.
“We’d rather dock it dormant here than sailing since it will only bring in losses,” he added.
“All that can be done now is to sell the ship as scrap,” said a sailor, who wished to remain anonymous.
Sharing Song Gianh’s fate, the Vinashin Atlantic ship is still under construction, though it was expected to restart at the end of last February.
Vinashinlines bought the ship in 2007 for VND910 billion, and has since sunk another VND80 billion in efforts to repair it.
The VND1-trillion vessel is now 15 years old, and it is unlikely that any lessee will chose it, experts said.
“Some countries do not allow old vessels to enter,” they explained.
“Meanwhile, running a 150,000-ton ship only for domestic transportis is too wasteful.”
Sell ships to clear debts
As of the end of last year, Vinalines’ shipping fleet had a total of 154 vessels, with a total loading capacity of 3.5 million tons, or 45 percent of the country’s total figure.
However, the national shipping line failed to exploit its vessels effectively, with many of its subsidiaries falling into financial troubles and steep losses.
Recently, the Vietnam Sea Transport and Chartering Joint Stock Company (VITRANSCHART), a subsidiary whose 60 percent stake is held by Vinalines, has sought buyers for two of its vessels to cut losses.
Earlier it sold three ships, yet still incurred a VND21.1-billion lost in Q1/2012.
Similarly, the Vietnam Ocean Shipping JSC, another Vinalines’ subsidiary, also had to sell three 27-year-old vessels last year due to ineffective exploitation.
The company also suffered a loss worth VND59.86 billion in the first quarter of this year.
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