Vietnam - Multi-billion dong ships turning into scrap iron

VietNamNet Bridge – Hundreds of ships are lying at sea under the sun. Since the ship exploiters cannot pay debts, they have to abandon the ships worth multi-billions of dong, which are turning into scrap iron.

The latest report by the Vietnam Maritime Bureau (Vinamarine) showed that 43 ships have been anchored in local port waters for many days. These include the ones left here since 2007. There are 14 such ships in HCM City, three in Quang Ninh and four in Hai Phong.

The ships belong to many different shipping firms, including state owned enterprises, namely Vinashin Lines and Vien Dong Maritime Service Company.

The number of idle ships on the rise

Vinamarine has noted that the number of ships anchoring for a long time tends to increase. In the economic downturn, ship owners cannot find customers and do not have goods to carry. A lot of ship owners have gone bankrupt, others are not financially capable enough to run the ships. Especially, some of them have been arrested.

The management agency has emphasized that these are just the ships reckoned by the maritime management agency, and that the report only shows the situation of the ships it has examined. Meanwhile, the agency cannot count on other ships put under the management of other ministries and branches.

A Vinamarine’s official said that many ships have been anchoring on the same places for a long time without noticing to the management agency. Others have been staying on the boundary areas put under the management of both waterway and maritime management agencies; therefore, they could not be taken into account of Vinamarine.

Quang Ninh is the province where most of the ships are gathering. Twenty ships are gathering in Vung Dang of Ha Long City, while hundreds of ships could be seen at different places in Quang Ninh province.

Nhat, a ferryman, said that he usually carries bank officers who try to seize ships. The ships are the assets of the borrowers mortgaged at banks for loans. Since the borrowers cannot pay debts, the banks seize the ships.

Ships turning into scrap iron

Nguyen Huu Bon, Chair of the Board of Directors of Viet Thang Company Ltd in Hai Phong, complained that the current lending interest rate of 15 percent is unaffordable to shipping firms.

“With the low freights, few goods and high interest rates, we dare not take over the ships for exploitation,” Bon said.

A senior executive of BM shipping agent in Hai Phong City also said that in the current big difficulties, a lot of ship exploiters accept to abandon ships, while other enterprises dare not take the ships for commercial exploitation.

Under the current regulations, the enterprises which take over the abandoned ships at the original prices, even though the prices have dropped sharply in the economic downturn. The high prices, plus the high interest rate of 15 percent would make it impossible to make profit.

Since no one wants to take over the ships for exploitation, the ships have been left idle for a long time and turning into scrap iron. This would not only deal a strong blow on ship owners, but also cause a big waste to the national economy.

The An Lu Transport Union, which has the fleet with the total tonnage of 270,000 tons (100 ships) valued at 3 trillion dong, has called on the State to apply special mechanisms to rescue the shipping industry.

The enterprises wish the State to accept to ease interest rates and freeze debts in order to help enterprises hold out and survive the current difficulties. If the enterprises can keep the ships, they would be put the fleet into service right when the economy recovers and the number of clients increases again.

Compiled by C. V

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