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Even when the ship is now doing nothing at a port in China, it still continues its loss-making saga every day by incurring massive expenses on crew wages, docking, insurance and machinery maintenance fees, and a daily depreciation of as many as $11,000.
Purchased from Italy in 2007 by troubled state-owned shipbuilder Vinashin, Hoa Sen ship soon had to go under maintenance in December 2008 after just 40 trips between northern Quang Ninh province and southern Ho Chi Minh City due to cracks found at the bottom.
The ship’s ownership was then transferred to Vinalines, another state-run shipping firm as part of the restructure process at Vinashin as ordered by the government, following its failure in clearing the massive debt of VND86.6 trillion ($4.33 billion).
From April 2009, the ship was docked at Cam Ranh Bay in Vietnam’s Khanh Hoa province until last February, when it left for China under a leasing contract inked between Vinalines and China-based Lianyungang CK Ferry Co Ltd with the daily rent of $16,500.
This shed a beam of hope for the revitalisation of this titanic ship, but not for long.
Just three months later, the ship was detained to serve as a collateral at a port in Korea over a $4-million debt that Vinashin Lines owed to Singapore-based GMS Marine.
Vinalines said the detention came after Vinashinlines failed to clear a $4.15-million bail for a lawsuit with GMS Marine.
The Singaporean shipping company then demanded a ‘fee’ of $6.5 million to release the ship.
A Vinalines’ top official told Tuoi Tre that the company had negotiated to get the ship back, but he “did not know how much Vinalines had spent on the task.”
The detention in Korea has caused Hoa Sen ship to lose its leasing contract with Lianyungang CK Ferry due to a clause in the contract stating that the deal could be canceled in case the ship stops operating for 15 consecutive days.
Bui Quoc Anh, Vinalines’ deputy general director, confirmed with Tuoi Tre that the contract had been canceled, adding the ship is doing nothing in China’s Lianyungang port since last May.
The lost contract dealt a loss of $2.4-million to Vinalines.
Vinalines said it had been seeking the government’s approval to put the ship on sale while also searching for partners to lease it.