Vietnamese experts criticize government on shipbuilder's decline

Jul 15, 2010, 11:22 GMT

Hanoi - Vietnamese experts on Thursday accused the government of mismanagement of the Vietnam Shipbuilding Industry Group that led one of the country's largest state-owned enterprises to the brink of bankruptcy.

Senior economist Pham Chi Lan, a former member of the Prime Minister's Research Commission, criticized the government's plan announced last month to restructure the company, also called Vinashin, by moving some of its subsidiaries and a debt of 20 trillion dong (1.07 billion dollars) to other state enterprises, including Vietnam Oil and Gas Group and Vietnam National Shipping Lines Corp.

'Restructuring it this way will bring many problems to Vinashin rather than solve them,' Lan said. 'Passing parts of Vinashin's debt on to other state enterprises does not make the debt disappear.'

She also called on the development of a legal framework to ensure that state-owned economic groups respect market principles.

'Ministries, specific individuals and agencies must be punished,' she said. 'Public funds were not charity funds.'

Economist Nguyen Quang A, former director of the Institute for Stable Development in Hanoi, criticized the government for favouring Vinashin, pointing to a 750-million-dollar loan the government gave Vinashin by issuing international bonds in 2005 and government urging of local banks to provide more loans to Vinahin while it was incurring a big debt.

'It is irrational,' A said.

Lawyer Nguyen Tran Bat, chairman of Investconsult Group, which provides legal consulting services to foreign companies in Vietnam, said the government's mechanism to allocate capital to Vinashin was vague.

'Laws on enterprises have been approved, but there are not sufficient regulations as well as sanctions to manage and punish state-owned enterprises,' he said.

Vinashin got into trouble when it diversified outside its core business and the global recession hit its customers, leaving Vinashin unable to pay up when its debts came due.

Prominent lawyer Cu Huy Ha Vu, who sued Prime Minister Nguyen Tan Dung last year over bauxite-mining projects, called on the National Assembly to establish a team to investigate the Vinashin case and bring charges against Dung for his role in managing Vinashin.

Dung on Tuesday fired the head of Vinashin, Pham Thanh Binh, for alleged mismanagement.

Vinashin, as of the end of June, had assets of 90 trillion dong but logged debts of more than 80 trillion dong, the government said.