Giant State Corporation set to recover

Permanent Deputy Prime Minister Nguyen Sinh Hung made the statement at the National Assembly’s eighth question-and-answer section on November 23.

The Government’s determination

According to Mr. Hung, after analyzing the situation in Vinashin, the Government had proposed a restructuring plan to the Party Politburo and it was agreed that Vietnam would still need a leading corporation to develop the country’s ship building industry.

Deputy PM Hung said restructuring is very hard work but if we manage to do it well, Vinashin will be able to recover and turn a profit.

Restructuring started in 2008 by reducing the number of Vinashin-invested projects from 185 to 106. Today the group has only 28 projects, 13 of which are ship building and industrial projects.

In early 2010, the Government decided to carry out the second stage of the restructure by transferring Vinashin projects in unrelated fields such as transportation to other groups or companies.

The third stage of restructuring is being implemented in accordance with the Party Politburo’s resolution.

Initial results of restructuring

Mr. Hung said with a high sense of responsibility and determination to restructure itself, Vinashin has gained initial positive achievements over the past six months. The group’s employees are all confident in its operation and their jobs, each with an average monthly income of VND2.8 million.

28 ship building factories are now in operation and are expected to build 66 ships, 9 more than the Government assigned. We are also in negotiations on 110 ship-building contracts with domestic and foreign partners, said Mr. Hung.

23 of Vinashin’s 26 ships transferred to the Vietnam National Shipping Lines (Vinalines) have resumed operation and are expected to earn as much as VND1,400 billion. In addition, the Hoa Sen ship will be leased out which is expected to earn about US$4 million a year.

Profit making

If Vinashin can manage well without a hitch, it will be quite capable of paying back all its debts and continue to grow, said Deputy PM Hung, adding that the development of support industries for the ship building sector will help Vinashin earn more money to pay its debts.

Judging from its total assets worth VND104 trillion against the overdue debts of VND86 trillion, the Deputy PM said Vinashin will suffer further losses in 2010.

However, he is confident that, with its better management and efficient operation, Vinashin will be able to reduce losses by 2011 and start to make profits in 2013 or 2014.

The Deputy PM said those who have violated the principles will be punished according to the law and investigations are underway to deal with the problem.