Troubled Vinashin hands over shipyard to PetroVietnam

As part of its approved restructuring plan, Vietnam Shipbuilding Industry Group (Vinashin) on July 8 handed over its Dung Quat Shipyard and shipbuilding projects to Vietnam Oil and Gas Group (PetroVietnam).

Dung Quat Shipyard Vice-Chief Huynh Van Dieu noted that the hand-over process will finish before September 30, 2010.

The construction of this shipyard began in 2003 in Dung Quat Economic Zone in Quang Ngai province. Vinashin considered this to be the largest and most modern shipyard in Vietnam, as well as one of the biggest shipyards in Southeast Asia, which can build vessels up to 400,000 tons.

Since Dung Quat Shipyard became operational in 2006, however, it has not launched just a single ship even though it employs over 2200 workers.

The shipyard started building a crude oil tanker, Dung Quat 1, of 104,000 tons in October 2006 and scheduled its launch in March 2008. This 800 billion dong ($42 million) project is still not finished.

Dieu acknowledged that this ship should have been launched last year, but an early July 2009 storm harmed the shipyard, causing damages worth 350 billion dong ($18.5 million). “We are trying to launch the ship in late July,” Dieu added.

At the site, the ship is nearly finished, but three major parts – the main engine, boiler and main capacitor – have not been installed.

Dieu explained that the shipyard’s foreign partner is repairing the main engine after it was damaged by salt water during the storm last year. The boiler is waiting at Hai Phong Port because the shipyard still owes customs tax. The main capacitor was manufactured in South Korea and the shipyard needs money to bring it home.

“Whether or not the ship is launched in late July depends on the hand-over to PetroVietnam,” Dieu noted.

In February 2008 Dung Quat Shipyard also started building another 105,000 ton oil tanker for PVTrans under a contract to build a total of three oil tankers of that size worth $60-65 million.

In the PVTrans contract signed in February 2007, Dung Quat Shipyard committed to hand-over the first ship in February 2009, the second in August 2009 and the third in February 2010. PVTrans’ business plan has been affected by the late hand-over of ships.

The shipyard has also failed to launch other ships like a 54,000 ton cargo ship, an 18,000 ton barge and a 2,400 horse-power towboat.

Dieu admitted that the biggest difficulty for Dung Quat Shipyard is the lack of capital because banks have refused to loan them money.

PetroVietnam management board member Phan Thi Hoa said that PetroVietnam will receive the following projects from Vinashin: Lai Vu Shipbuilding Complex (Hai Duong), Nghi Son Shipbuilding IZ (Thanh Hoa), Nhon Trach Specialized Shipbuilding and Equipment Manufacturing Plant (Dong Nai), the Dung Quat Shipyard (Quang Ngai), Soai Rap Shipbuilding Industrial Zone (Tien Giang), Vinashin’s share in the Hoang Anh Shipbuilding JS Company (Nam Dinh). – Vietnamnet

Tags: Vietnam shipping industry, Vinashin restructure