Vinalines in tough financial condition
By Tu Hoang - The Saigon Times Daily
HANOI – Vietnam National Shipping Lines (Vinalines) started incurring losses early last year and the state-owned conglomerate is now in dire financial condition, Minister of Transport Dinh La Thang told the National Assembly.
As of end-2010, Vinalines’ debt was 4.27 times bigger than its chartered capital. A combination of high loan rates, big management costs and poor investment caused a steady decline in business performance.
Vinalines has got involved in an array of projects, of which most have fallen behind schedule. However, the minister’s report claims, the firm was doing good business before 2009.
A latest report by Government inspectors shows Vinalines’ bad debt amounted to VND23 trillion. The shipping giant has purchased 73 vessels worth around VND23 trillion, including 13 used vessels that are over 15 or even 30 years old.
Vinalines has been found to commit a host of wrongdoings in investment projects. For instance, it purchased a floating dock that is 43 years old, which is against regulations. The buying price and maintenance costs of the floating dock amounted to VND490 billion, approximately 70% of a new facility.