Vinalines debts exceed charter capital

Vinalines debts are much greater than its charter capital. 

>> Vinalines case takes new twist

The report, signed by the Ministry of Transport Dinh La Thang was released to the on-going session of the National Assembly.

The report showed that prior to 2009, the firms had operated well, but since then it had fallen victim of several stagnant projects, incurring major debts. By the end of 2010, Vinalines’ debts were 4.27 fold greater than its charter capital and business efficiency had sharply decreased, in addition to servicing high interest loans.

Vinalines has faced losses since 2011 and this has continued in the first four months of this year.

Besides the negative impact of the economic downturn, lax supervision by the Ministry of Transport and internal disunity among Vinalines’ management were cited as causes for the shipping giant’s failures.

Vinalines management approved the purchase of a used floating dock that was manufactured back in 1965 for a total cost of $13.5 million for use in a shipyard they had planned to construct in Ba Ria-Vung Tau province. The dock, which had been de-listed from active service by the Russian Maritime Register of Shipping, was obsolete and the purchase triggered the arrest of a number of Vinalines officials on corruption charges.

Following an investigation by the Government Inspectorate, the Prime Minister demanded the Ministry of Transport tighten control over the investment in the ship repair project. The ministry was also required to explain the late submission of a plan on the development on shipbuilding industry sector by 2020 with a vision to 2030.

Minister of Transport Dinh La Thang said the ministry had fulfilled its responsibility on managing Vinalines and the corporation had developed well over a long period of time.