Diamond Way, an old Vinalines vessel, has been stuck in the UAE for more than five months now
The Vietnam Maritime Administration is asking the Transport Ministry for permission to destroy 22 foreign-made vessels owned by state companies that are now too old to be used.
The agency listed 53 sea vessels, with a total loading capacity of 673,500 DWT or around ten percent of national fleet capacity, that need to be broken down. But that included 22 vessels bought overseas that still carry foreign flags, which are not allowed to be destroyed in Vietnam.
Many of the boats were bought secondhand by state ship building giant Vinashin and shipping giant Vinalines, both of which are billions of dollars in debt. 41 of the boats are anchored in Vietnam and 12 overseas, including 7 on which crew members are currently stranded.
The administration said that when a vessel is left unused, the law requires the ship's owners to continue maintaining the vessel and paying all fees related to the ownership.
But many embattled owners can no longer afford to make those payments.
Vinalines has a total of 143 ships with a total loading capacity of 3 million DWT and plans to sell more old ships this year. It sold 10 ships in 2011.
The group announced losses of $117 million last year, saying it failed to see a falling market when it bought additional ships over the past several years. It expected a total of $101 million in losses by the end of this year.
It is under government inspection for fraudulent activities relating to the purchase and ineffective use of old ships. From 2010 to 2011, the group incurred losses totaling $182.3 million, but falsely reported profits.
Former Vinalines officials including Duong Chi Dung, General Director and Chairman between August 2005 and February 2012, have been arrested in connection with the investigation.
Several boats under Vinalines's jurisdiction were transferred from shipbuilder Vinashin, which nearly went bankrupt after piling up debts of US$4.5 billion in 2010.
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