Mega bargain: Vietnam SOE sells unused dock 13 times less than buying price

By An Hong   June 6, 2016 | 04:04 pm GMT+7

Vinalines, Vietnam’s largest state-owned shipping firm and port operator, has sold an unused floating dock for $1.7 million, on which the company spent around $26 million, said the company last Friday.

The dock was mocked by the country’s press as an “iron heap” as criticism came flooding of misspent state funds and the company’s lax business management.

Vietnam National Shipping Lines put the dock up for auction after it had managed to secure government approval to sell it in March, according to the Ministry of Transport.

An individual investor made the highest bid for the dock at VND38.5 billion ($1.7 million), a company source said.

“Vinalines is working with government authorities to handle things related to the dock, such as anchoring costs. After that the company will make [information about the sale] public,” the source added.

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The dock is mocked by Vietnam's press as an “iron heap” to stress the company’s lax business management. Photo from Tranport Ministry

On March 19, the government finally gave Vinalines the go-ahead to sell the dock and gave it full responsiblity for the sale, said Deputy Minister Nguyen Van Cong.

“The ministry has been working with the company to come up with a final solution, but we haven't been successful. The longer the dock is left unused, the greater the losses, and the higher the environmental risk,” said Cong.

In February, Vinalines submitted a proposal to the government expressing the intention of putting dock 83M up for auction at a starting price of nearly VND35 billion.

Vinalines reportedly spent VND22.85 trillion dong between 2005 and 2010 on 73 second-hand ships, including 17 described as “too old” by a government report.

Among them was the purchase of a 51-year-old Japanese-built floating dock that a Singaporean seller had put a price tag of $5 million on. However, Vinalines ended up paying $9 million for the dock.

Repair work raised the cost to $26.3 million, which was said to be about 70 percent of the price of a new dock.

The unused dock is now mocked in Vietnam's press as an "iron heap", symbolic of Vinalines' losses.

According to government inspectors, Vinalines lost VND434 billion in 2011 due to careless corporate management.

Four Vinalines' executives have been arrested since then, including former Chairman Duong Chi Dung, who was accused of deliberately mismanaging the company.