Government-backed fishing boats sink Vietnamese fishermen into debt

Fishermen in Vietnam's central coastal provinces who took out loans from commercial banks to buy steel fishing boats under a government-backed scheme have reported huge losses.

They said the boats are in disrepair and costing them money just a few months after coming off the production line, and now they are unseaworthy.

In January this year, fisherman Thai Van Duyet from Phu Cat District in Binh Dinh Province received a new boat worth VND19 billion (over $836,000) from Nam Trieu One Member Company Limited.

The boat was built following a decree issued by the government in 2014 to back the development of the fisheries sector that included financing fishermen to buy high-capacity, steel boats for offshore fishing.

Three months later, Duyet started fishing off the coast of Da Nang with the new boat but failed to catch any fish as the nets kept getting caught on the propeller.

It cost him more than VND30 million to install a steel cage around the propeller but that hasn't helped and he's also had to pay over VND100 million to fix his nets.

“In addition, I had to pay each of my crew VND5 million and cover the expenses for 5,000 liters of oil to run the boat and ice to freeze the fish. In total, I have spent VND300 million but I've got nothing to show for it,” he said.

Many boats get rusty after a short time of use. Photo by VnExpress/Dac Thanh

For Dinh Cong Khanh, another fisherman from Phu Cat, things are not much better.

After two fishing trips, his VND18.5-billion boat, which was also built by Nam Trieu Company, is sat in port.

During his first trip last year, the cold storage facility broke down, ruining nearly three tons of fish.

Before his second trip in March this year, the vessel developed transmission problems, forcing him to leave it in port and send the engine to Ho Chi Minh City for repairs.

“The ship is only six months out of the yard but the hull is already covered with molluscs,” Khanh said, concluding that the paint used for the ship was sub-standard.

After two failed attempts, he has lost VND600 million and is now in debt.

And the list goes on.

Vo Van Han from Binh Son District in Quang Ngai Province said he had gone out fishing five times since receiving a steel boat that cost VND14 billion in February last year, but the boat’s engine has constantly broken down and now he is suffering a big loss. Over the past year he had spent over VND1 billion fixing the boat thinking he would be repaid for the repair work as regulated, but so far he has yet to receive any compensation.

Tran Van Lien's boat in Quang Nam’s Thang Binh District broke down the first time it was put into the water and his case has been taken to court after disagreements with the shipbuilder.

According to the government policy, fishermen who want to build steel-clad fishing boats are given loans at interest rates ranging between one and two percent per year, depending on the ship's capacity.

Fishermen can get a loan equal to 70-95 percent of the estimated value of the ship, depending on its capacity, and the security for the loan is the vessel itself.

Regarding insurance for the ship’s body and equipment, the government will pay 70 percent of the total premium for ships with capacities from 90 horsepower (HP) to just under 400 HP, and 90 percent of the same for vessels with capacities of 400 HP or higher.

So far, the owners of ten steel fishing boats in Binh Dinh have signed a petition to complain about the quality of vessels built by Nam Trieu and Dai Nguyen Duong Shipbuilding Company, Vo Dinh Tam, a senior fisheries official from Binh Dinh, told VnExpress.

In wake of the petition, provincial authorities inspected boats built by Dai Nguyen Duong and found that three out of five were in serious disrepair from their hulls to the decks, cabins and cold stowage, Tam said.

Of the 20 ships built by Nam Trieu, four showed signs of wear with molluscs covering their hulls. Their computers and generators were also found to be faulty, along with the sub-standard cold storage facilities.