Loss-making shipping lines say reform in trouble

The Vietnam National Shipping Lines (Vinalines) and Vietnam Shipbuilding Industry Group (Vinashin) are facing difficulties in implementing their restructuring plan, top officials at the two troubled state-owned firms lamented on Wednesday.

“The main culprit is that the sea transporting sector remains in turmoil,” Vinalines’ deputy CEO Le Anh Son told a meeting held by the Ministry of Transport to benefit the restructuring and privatization process of the two shipping lines.

Debt-ridden Vinalines must rake in up to VND6 billion (US$288,462) in revenue a year from now to 2015 in order to settle all its debts, a target Son said is almost impossible given the current poorly-developed sea transport market.

Vinalines did divest from several small businesses, but the money earned from such divestments is too modest to handle debts, he added.

In the meantime, Vinashin has 216 subsidiaries that need to be restructured. Nineteen of these firms have negotiated with the National Debt Trading Company, but no agreements have been reached, said acting CEO Vu Anh Tuan.

Vinashin is expected to maintain 43 subunits, 25 of which are set to go private, but none of these plans have ever been carried out, he added.

The government has recently green-lighted the plan to sell a fleet of seven ill-fated vessels of debt-stricken Vinashinlines, a subsidiary of Vinalines, as part of the measures to help it overcome the hardship.

Vinalines CEO Nguyen Canh Viet was not at the meeting since he is on a business trip to Cambodia, a reason which Minister of Transport Dinh La Thang deemed unacceptable.

“What was he in Cambodia for? Does that help save Vinalines?” Thang asked the meeting.

The minister urged Vinalines to speed up the ship selling process, saying it has wasted too much time.

Under a restructuring plan developed by the transport ministry, 10 corporations are set to go private in 2013.