The Vietnam State Inspectorate (VSI) has recently submitted to the government its inspection report on Vietnam National Shipping Lines (Vinalines) in the 2007 – 2010 period.
The largest state-owned shipping and port operator in the country, Vinalines currently suffers from five defaulted loans worth more than VND23.06 trillion (US$1.1 billion), VSI said.
The state-run shipping giant was also found to have purchased 73 foreign vessels, most of which are secondhand, at VND23 trillion.
Of these, 17 vessels have been used for more than 15 or even 30 years, incurring a huge expense for repairing and maintaining the ships due to their deteriorated conditions.
This also hit Vinalines with overrun expenses from clearance interests since most of its investment capitals are from bank loans.
Even worse, with some of the vessels too old to be registered in Vietnam, Vinalines had to license these ships in other countries, and thus had to hang those nations’ flags instead of that of Vietnam.
“This damages the reputation of Vietnam’s national shipping fleet, and reduces its competitiveness,” the inspectorate said.
Many applications to purchase ships were cursorily made but all of them claimed that the vessels would yield high economic effectiveness and quick recoupment.
Five out of 27 newly-built ships, and 34 out of 37 purchased vessels which were put into operation between 2005 and 2007 have in fact brought in losses.
For instance, the VNL Galaxy ship was bought in 2007 at VND973.4 billion, but caused a VND192-billion loss in late 2010.
Meanwhile, the respective losses caused by the VND873.1-billion Vietnam Glory and the VND73.3-billion Vietnam Global vessels are VND115.5 billion, and VND77.3 billion.
Other wrongdoings
The State Inspectorate also unearthed many wrongdoings in Vinalines’ investment projects.
For instance, in the project to invest in the “Vinalines southern ship repair factory,” the company bought a No83M floating dock that had been used for 43 years already, while the limit is only 15 years.
The floating dock consumed a total of $26.3 million from Vinalines’ budget, which is 70 percent of the expense of building a completely new dock.
Vinalines also spent VND4.1 billion to organize the groundbreaking ceremony for the Van Phong international transshipment construction project, exceeding the allowed sum by VND4 billion.
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