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Shipbuilding difficulties remain a roadblock for seafood industry

Update: February, 12/2015 - 09:03
Ha Long Ship-building Company has put a new container ship into use. — VNA/VNS Photo Huy Hung

HA NOI (VNS) — Obstacles in the shipbuilding process are being blamed for the slow implementation of policies intended to develop the seafood sector and the offshore fishing industry.

The central province of Quang Ngai was the first to implement Decree No. 67, but to date, only two of its 65 ship owners have received access to bank loans to build new fishing vessels.

The government's Decree No. 67 came into effect in August 2014, regulating policies on investment, credit, insurance and tax incentives in support of fishermen and ship owners who wish to build new fishing boats, upgrade boats, and buy fishing and marine equipment, among other things.

In Da Nang City, Mai Dang Nhieu, a ship owner and chief of the Fishing Union of Son Tra District's An Hai Bac ward, said fishermen have yet to gain access to loans.

Nhieu noted that 28 organisations and individuals had registered to build new fishing boats, but only 10 units in total were approved.

Nguyen Duy Trinh, a fisherman from Quang Ngai City's Tinh Ky Commune, remarked that accessing bank loans is very difficult even though his name is on the approved list.

Trinh added that he was also wondering which boat model was best suited to his work.

According to the commune's fishermen, the 21 fishing boat models suggested by the Ministry of Agriculture and Rural Development (MARD) were not suitable for the fishing environment in certain regions.

In order to acquire more suitable vessels, many fishermen have withdrawn their approved applications for registered loans and are working with private firms instead to hire workers to build better boats.

These fishermen in Quang Ngai are also questioning the decree's regulations which mandate the use of new machines in the shipbuilding process.

Some of the fishermen suggested that new machines are not necessarily better than old ones that are still in good working condition, noting that they would have to spend more on a new machine.

A new machine costs nearly VND2 billion ($95,000), whereas the old one only costs VND500-700 million (roughly $24,000-$33,000), said Le Van Chau, a fisherman in Da Nang, adding that it is very easy to replace broken spare parts on old machines.

In addition, the cost of a new steel-hulled boat is very high, making many ship owners wary of the purchase.

Two ship owners in Quang Ngai province were approved for loans worth VND16.9 billion ($800,000), but they decided not to borrow anymore due to the loans' high interest rate, which cost them VND1.4 billion ($67,000) per year.

According to local authorities, another reason for the slow implementation of Decree 67 is that the commercial banks have not actively approached ship owners who have registered for loans.

According to Pham Truong Tho, Deputy Chairman of the People's Committee of Quang Ngai, banks should report their decision to the fishermen within 15 days of receiving their documents.

If they run into difficulties, banks should seek assistance from the relevant committees or should request central support.

Deputy Prime Minister Vu Van Ninh also directed the local representatives of banks to help with the implementation of the decree and quickly remove obstacles in order to provide loans for the fishermen.

Ninh also suggested that the bank should help fishermen get loans based on trust rather than collateral.

MARD will study and design more vessels with wooden hulls and other materials best suited to each region, Ninh added.

According to MARD, five months after implementing the decree, 16 out of 28 centrally-run provinces and cities made a list of fisheries projects prioritised for investment and submitted this list to the ministry. There are only five provinces and cities offering insurance for ship hulls, fishing equipment, and crew accidents, with a total cost of over VND6.4 trillion ($300.8 million).

Regarding the credit policy for fishermen to build fishing boats, only 12 out of 28 provinces and cities have approved the building of 352 new fishing boats and the upgrading of 34 others, including the building of 151 new steel-hulled boats, 185 wood-hulled boats and 16 boats made of new materials. However, only 10 fishermen are eligible for bank loans and have been accepted by commercial banks, with a total loan value of VND120 billion ($5.6 million).

Meanwhile, the total number of offshore fishing boats should reach 2,097 in 2020 with 205 logistics service boats. — VNS

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