Many cargo ships of foreign nationals but owned by Vietnamese public and private companies are currently docking dormant in Vietnam and other nations. The vessels are incapable to be exploited anymore, while failing to meet maritime safety and security standards, the VMA said in a report submitted to the transport ministry.

VMA wanted to dismantle 22 such ships and sell their parts as scraps, but this is against a clause in the Law on Environmental Protection that bans the imports of used means of transportation for dismantling.

Under Vietnamese laws, businesses are not allowed to buy used vessels that have been operating for over 10 years in case of transporting vessels, and 15 years for other types of ships.

However, as those exceeding the age limit usually fetch lower prices, many local companies have bought old vessels and registered them as of a foreign nationality in order not to follow the Vietnamese regulations.

The vessels owners expected that they would sell the ships as scraps once they become unable to travel.

But the sea transport market hardship has destroyed their plans. No buyers seem interested in the ships when they are put on sale, while the law prevents them from being dismantled.

“We can dismantle the ship in another country, but the money gained from selling its scraps will not recoup transporting fee,” a ship owner said.

The VMA thus proposed that the Law on Environmental Protection be amended to allow the ship owners to brought back their vessels with foreign nationalities and dismantle them.

“This will help prevent the maritime insecurities in the countries where the ships are docking, as well as assisting ship owners over the hardship,” the administration said, emphasizing that two state-run shipping lines, the Vinashin and Vinalines, badly need the assistance.

Tuoi Tre News - February 23, 2013

‘Pathetic’ ships should be saved, not destroyed

While administrative officials are seeking permission to dismantle a number of very expensive, ineffective vessels to sell as scrap, some insiders have said other solutions should be considered in order to better exploit the ships.

The Vinashin Atlantic, Lash Song Gianh, and Hoa Sen are among the most infamous Vietnamese cargo ships that have caused massive economic waste and currently lay dormant at ports both in and out the country.

The Vietnamese Maritime Administration has called on the government for permission to have the ships docked in other countries dismantled and sold as scrap. Under the local Law on Environmental Protection, ships are banned from being brought to Vietnam to be destroyed and dismantled.

The 21-year-old Vinashin Atlantic ship, owned by Vinashinlines, a subsidiary of the loss-stricken shipping company Vinalines, was bought in 2007 for US$56 million, but it is now worth no more than $7.5 million, according to a report released in 2012.

But people close to the matter say the ship could only be sold as scrap, since few companies would buy a ship that is over 15 years old.

“Buying the ship for $56 million and selling it for $7 million, what a painful lesson about economic management,” said Tran Van Lam, a former director of Vosco, a sea transporter.

A number of other ships, including the New Phoenix, New Horizon, Sea Eagle, Lively Falcon, Vinashinship 4, and Hoang Son 28, are also severely deteriorated and can only be sold as scrap for $1 - $4 million each, insiders said.

Last-ditch effort

As some of the dormant ships are actually in quite good condition, insiders say they should be sold, but under market rate, instead of being dismantled and sold as scrap. “For instance, selling the Hoa Sen ship at 80 percent of its market rate is still better than selling as scrap,” Lam, the former Vosco director, said.

Pham The Hung, director of Sao Do Co Ltd, a Ho Chi Minh City-based transporter, said in case the ineffective vessels are owned by the government, they should be sold to private companies at reasonable prices.

“Reality shows that there are cases when a ship that causes losses under state management brings in profits when operated by a private firm,” he said.

Other insiders from the sea transport sector also said many of the dormant ships can be repaired and used to transport agricultural products between Vietnam and China.

Tuoi Tre News - February 2(, 2013