Besides wasting money on a number of old, downgraded vessels, Vinalines has also thrown good money after a floating dock which was produced in 1965, only to have it under constant maintenance since the purchase.
Floating dock No83M was amongst the equipment included in the plan to construct the Vinalines southern ship repair factory of Vinalines Shipyard Co (VNLS), a subsidiary of Vinalines, or the Vietnam National Shipping Line.
Ironically, the floating dock that was intended to handle the repairs for Vinalines’ shipping fleet has in fact yet to receive any ships in the last four years, and has itself been under constant maintenance.
VNLS was initially approved to buy the equipment for $13.1 million in September 2007, but the figure rose to $14.1 million a month later.
On March 15, 2008, Vinalines inked a deal to buy the No83M floating dock, which was produced in Japan in 1963, from a Singaporean company.
As the dock was too old to meet technical requirements for registry clearance, Vinalines had to hire Hyundai Vinashin Nha Trang to repair it under the standards of Russia.
Expenses for the equipment thus overran to $19.5 million.
Not long after it was put into use, the floating dock experienced breakdowns and was transported to Dong Nai-based Go Dau port for repairing, which then sent investment in the dock to $26.3 million.
Moreover, the floating dock also has to bear regular expenses including a docking fee worth VND420 million ($20,160) a month, a daily fee of $700 to hire two ships to tow the dock, and labour wages.
According to the Vietnam State Inspectorate (VSI), the purchase of No83M floating dock is suspected of violating laws on investment.
The floating dock was 43 year olds when it was bought, while the limit is only 15 years. Moreover, it consumed a total of $26.3 million, which is 70 percent of the expense of building a completely new dock, the VSI said.
VSI said it has transferred the case to the Ministry of Public Security for further investigation.
The No83M floating dock now sits abandoned like a huge iron block in decrepit condition at Go Dau port, as observed by Tuoi Tre reporters in early May.
The dock’s coat of paint has peeled off, while several parts have rusted.
“It’s not easy to fix these problems,” said a worker on the dock.
While there were as many as 100 workers deployed to remove the rust and repaint the floating dock when it first arrived in the port, work just seems desperate now, workers said.
“It has been 47 years since it was built, so deterioration is inevitable,” they said.
On May 10, Vinalines submitted a report to the Ministry of Transport regarding the plan to modernise its shipping fleet by 2020 under a VND100 trillion proposal which has recently ignited an uproar among insiders.
In the report, Vinalines said it will cut the total investment needed to only VND68 trillion.
The investment will be sourced from loans, stocks, and Vinalines’ own capital source, and the company will not use any money from the state budget to invest in its vessels, Vinalines confirmed.