VietNamNet Bridge – The Ministry of Transport (MOT) believes that it would be better to demolish old ships and sell as scrap iron. However, the current laws don’t allow to do this.

A report by MOT recently released showed that there are a lot of state owned and private ships berthed in Vietnam or foreign countries, which cannot be exploited any more because of they cannot meet the requirements on maritime safety. These include 22 ships that fly foreign flags but belong to Vietnamese enterprises.

The ministry believes that it’d be better to demolish the ships and sell them for some money. However, the current valid Environment Protection Law prohibits legal entities to import used transport vehicles for demolishment.

The existence of the old ships has caused a headache to MOT. It seems that it would be not worth amending the law just to be able to demolish vessels. Meanwhile, if the law is not amended, the ships would still exist, which would cause consequences to the environment and maritime safety.

Some years ago, when the sea shipping industry was in the golden age, many Vietnamese ship owners decided to buy old ships at low prices which flew foreign flags (so as to dodge the Vietnamese laws which did not allow to buy overly old ships).

The investors believed that they made good deals then, because they would make some money with the old ships before selling the ships as scrap iron.

However, their plant were upset when the shipping market fell into a crisis, the ship owners did not get orders, while they could not demolish to sell the ships. It would violate the laws to demolish vessels in Vietnam, while it would be too costly to bring the ships abroad to demolish.

While the ship owners cannot bargain the ships away, they have to spend money on fuel, crew to maintain the operation of the ships and ensure the security and maritime safety. Especially, they also have to pay all kinds of fees and charges.

As such, though the ships cannot bring money, ship owners still have to spend money to keep them. Many of them, who are not financially capable enough, have decided to abandon the ships.

At present, banks, finance leasing companies and ship owners have to leave the ships in the countries which charge low anchorage fees.

The director of a shipping firm agreed that selling the vessels, or demolishing the vessels to sell as scrap iron proves to be the best solution for now. In general, when ships cannot be exploited any more for different reasons, ship owners would try to sell ships, because they would incur losses if they keep the ships, Even if the vessels are not too old, they would be sold if they cannot bring money to the owners, who want to take back the investment capital for other investment projects.

According to the Vietnam Maritime Bureau, by the end of January 2013, 41 vessels berthed at the ports in Vietnam, including the 10 ships flying foreign flags, which had been found as not meeting the maritime safety.

There had been 54 vessels owned by Vietnamese firms, or 14 percent of the total tonnage of the Vietnamese fleet, staying for many days in foreign countries. The owners of 12 out of the 54 vessels are not financially capable enough to maintain the maritime safety conditions.

Lao Dong