Fishermen are miserable because of 'steel-hulled ship 67'

Unable to repay debt

In December 2016, the steel-hulled ship QNa 93455TS, with a capacity of 814CV worth VND 16.3 billion, was built according to Decree No.67 of Mr. Do Van Tien (58 years old, residing in Duy Vinh commune, Duy Xuyen district, Quang Nam province) was officially completed and launched. Mr. Tien expects this ship to steadily reach out to sea, increase exploitation efficiency and bring great profit to his family.

However, what happened next was quite the opposite. The ship's consecutive trips to sea all returned in a state of loss, the former boatmen who had been attached for many years one by one left Mr. Tien. Difficulties piled up, so after 2 years, the shipowner had to accept the ship lying on the shore. After long inactivity, the ship gradually deteriorated, and the equipment rusted. By November 2021, the ship was liquidated for VND 1.5 billion (less than 10% of the original value).

Mr. Pham Tri Thuc (67 years old, residing in An Ky village, Tinh Ky commune, Quang Ngai city, Quang Ngai province), with 30 years of attachment to the marine industry, the assets that Mr. Thuc built up are 3 wooden-hulled ships with a total capacity of 1,000CV operating very efficiently, bringing the family billions of dollars each year.

Decree No.67 was born. With encouragement, Mr. Thuc borrowed nearly VND 15.8 billion from a bank in Quang Ngai province to build steel hull ships for offshore fishing and economic development. In 2017, the ship with the number QNg 91999TS of Mr. Thuc officially went into operation.

This ship is engaged in fishing activities on difficult seas. Crew members on board are not used to practicing on steel-hulled ships, so the fishing efficiency is not high.

In 2021, the bank auctioned the steel hull ship QNg91999TS for nearly VND 2 billion because the shipowner did not fulfill the debt payment obligation according to the contract.

Recently, his family received a notice of enforcement from the Civil Judgment Execution Department of Quang Ngai City. When he could not pay, his family feared losing the whole house.

Causes and problems

Cases like Mr. Tien and Mr. Thuc are just a few of the many fishermen building steel-hulled ships under Decree No.67 in Quang Nam and Quang Ngai provinces.

According to Mr. Vo Van Long, Director of the Fisheries Sub-Department of Quang Nam province, this province has nine ships built under Decree No.67 lying ashore, of which 8 are steel-hulled ships. Currently, the Bank is carrying out liquidation procedures.

Actual fishing shows that steel-hulled ships handle heavy loads with the same fishing profession, have higher costs, and require more labor than wooden-hulled ships. If wooden-hulled boats doing the same job only need 7-8 workers, steel-hulled ships need 12-15 workers. Meanwhile, catches are also similar. Labor on steel hull ships with low income should leave to find other vessels with higher pay.

In addition, the steel-hulled ships designed for occupations are not suitable for the fishing tradition of Quang Nam fishers. The fishers are inexperienced, so the fishing activities are not efficient.

Quang Ngai province also has 62 loan ships built under Decree No.67, including 11 steel-hulled vessels. Of these steel-hulled ships, 80% of ships are inefficient, inactive, or lying ashore.

When the above customers incurred overdue debts, the bank often worked with ship owners to find solutions to overcome difficulties; assess business performance; financial resources to repay the debt… However, the shipowner did not come to work with the bank and did not cooperate with the bank on proposals for asset handling.

From this fact, Mr. Vo Phien, Vice Chairman of the Provincial People's Committee of Quang Ngai province, also sent a written request to the Ministry of Agriculture and Rural Development to advise the Government on promulgating a mechanism to handle specific risks for lending according to Decree No.67 to apply to the whole banking system and to support the risk treatment budget for commercial banks that have used self-mobilized capital to lend under the Decree.