Multi-billion VND shipbuilding projects stop operations

Who is to blame for the unprofitable shipbuilding projects which have had to stop operation?

Vinashin kicked off construction of Nam Can shipbuilding yard in March 2007 with investment capital of VND1 trillion for the first phase. After 12 years, the shipbuilding yard remains idle with equipment becoming rusted.

Multi-billion VND shipbuilding projects stop operations


On October 17, 2017, the Ca Mau provincial Economic Zone Management Board released a decision on stopping the project because of investors’ violations of the commitments written in the investment certificate and the provisions stipulated in the 2014 Investment Law.

Head of the board Hua Minh Huu said he has signed a dispatch to the Nam Can district People’s Committee, urging the local authorities to give the land plot back to make room for new investors.

Vinashin kicked off construction of Nam Can shipbuilding yard in March 2007 with investment capital of VND1 trillion for the first phase. After 12 years, the shipbuilding yard remains idle with equipment becoming rusted.

Cao Thanh Dong, member of the board of directors of the Shipbuilding Industry Corporation (SBIC) on August 27, 2019 confirmed that the decision on stopping the Nam Can project was released in 2017. However, to date, nothing has been done to liquidate the project. The main pier with tonnage of 200 tons is becoming rusty.

 


Asked how the project would be liquidated, Dong said it is necessary to consider the status of the project and ‘official information will be released later’.

Commenting about Nam Can project, Do Thai Binh, from the HCMC Marine Science Association and the US Society of Naval Architects and Marine Engineers (SNAME), said this is the corollary of the ‘chaebol dream’. Vietnam dreams of having big shipbuilders like the South Korean chaebol Hyundai, but it still doesn’t have favorable conditions in labor force and technology.

In fact, Nam Can is not alone. ‘Dead’ projects can be found everywhere. Many other projects initiated by Vinashin had to shut down after long periods of difficulties.

Binh said stopping unprofitable and ineffective projects needs to be done soon, because delays will only cause waste.

“If not liquidating unprofitable projects soon, resources will be wasted: land is left fallow, while people don’t have land for cultivation. Trillions of dong worth of equipment cannot be used. It is a big waste of money,” he commented.

However, in reality, many projects still cannot be dissolved or bankrupt.

Binh believes that high ranking officers in state management agencies and investors have tried to deny their responsibility for unreasonable investment decisions which led to serious consequences.

“It is very difficult to ask for permission to develop a project, but it is even more difficult to eliminate the project,” he said.

Mai Lan 

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