Nghe An unties the knot for 'fleet 67'
(Baonghean.vn) - After nearly 10 years of implementing Decree No. 67/CP, Nghe An fishermen are facing difficulties as bad bank debts are increasing, many ships are forced to stay ashore...
Ship 67 in trouble
Fisherman Tran Ngoc Bien in Dai Hai hamlet, Quynh Long commune (Quynh Luu), owner of the boat with license plate NA 96588 TS built under the policy of Decree 67/CP (abbreviated as boat 67), said: My boat was built in 2016, with a total cost of 9 billion VND. Of which, I and 6 other fishermen in the commune mortgaged the red book to borrow 6.4 billion VND from the Vietnam Joint Stock Commercial Bank for Industry and Trade - Quynh Luu branch.
After 7 years of exploitation, although actively sticking to the sea, due to increasingly difficult fishing grounds, along with the sharp increase in fuel prices, from 12,000 VND/liter (in 2017), now increased to over 20,000 VND/liter, while seafood prices have not increased, so it is facing difficulties. Especially in 2020 - 2021, due to the impact of the Covid-19 pandemic, many fishermen had to be quarantined, seafood could not be consumed but bank debts still had to be paid... causing many 67 ships to fall into debt.
Mr. Bien said that after 7 years of putting the ship into operation, out of the 6.4 billion VND loan from the bank, he has only paid 3 billion VND so far, and currently owes 3.4 billion VND. The deadline for repaying the bank loan to build the ship according to Decree 67/CP is within 10 years, so the remaining debt of 3.4 billion VND must be paid off in the next 3 years, which is very difficult. Because during the operation, in addition to the cost of all activities at sea, there is also the need to maintain machinery, repair fishing gear, etc.
Faced with such difficulties, 5 of his former crew members quit their jobs to find other jobs, leaving him alone. Therefore, each trip he had to hire many workers, the cost was high, and without going to sea, he had no money to spend, no money to pay his customers, no money to pay the bank. Over the years, Mr. Bien had to accept borrowing billions of dong from organizations and individuals to pay the bank on time, in order to maintain his fishing career.
“The fishing profession has been with my family for generations, so if I quit my job because of a bank loan, what will I do when my family's life depends on me?” Mr. Bien said.
While repairing fishing gear after a trip at sea in early October of the lunar calendar, fisherman Tran Dinh Thien in Quynh Long commune, owner of fishing boat NA 98668 TS, said: His fishing boat has a capacity of 820CV, with a length of 25m, width of 7.3m, built according to the policy of Decree 67/CP, with a total value of more than 10 billion VND, of which 7 billion VND was borrowed from the Branch of the Bank for Agriculture and Rural Development of Quynh Luu district, which has not been fully paid off yet.
Due to the difficult fishing situation, the bank has created conditions for fishermen to pay 800 million VND in interest and principal each year. However, even with the bank's extension, paying the interest is still a challenge for the boat owner.
Mr. Thien said that due to difficulties in fishing grounds, increased fuel prices, etc., the profit after each trip is not significant. For example, the trip at the end of the ninth lunar month, the seafood was sold for 200 million VND, minus the costs of fuel, ice, food, etc. for 18 people drifting at sea for nearly 20 days, so the profit was only 20 million VND.
“If this profit is divided among 18 members, there will be nothing left to pay the bank. Despite his best efforts, his ship can only pay 400 million VND in principal and interest to the bank each year. By 2027, the 10-year loan period for building ship 67 will expire, but the bank debt is still nearly 4 billion VND. With this situation, it will be very difficult to pay off the debt on time,” Mr. Tran Dinh Thien worried.
It is known that after many years of use, dozens of 67 ships have been operating inefficiently, causing the ship owners to fail to pay their debts on time, even having to go to court to resolve risks. Typically, in Quynh Luu district, there are up to 20 fishing ships being handled for risks, the remaining 32 ships are continuing to urge debt collection.
Mr. Bui Xuan Truc - Deputy Head of the Department of Agriculture and Rural Development of Quynh Luu district said that the reason why many fishing boats 67 in the district had to deal with risks was because they were unable to pay debts, due to ineffective exploitation, some sank and burned. For example, in July 2023, in the fire of 5 fishing boats at Lach Quen fishing port, there were 2 boats 67 belonging to fishermen Ho Dinh Viet and Dao Xuan Thang, currently 2 boats are being salvaged, waiting for the authorities to handle according to the regulations of the bank, because each boat owner still hasBank balanceover 5 billion dong
According to information from the State Bank of Nghe An Province Branch, as of September 30, 2023, out of a total of 104 ships 67, 9 ships with problems have paid off their loans; 95 ships are still obligated to repay the bank with a principal debt of more than 525 billion VND; the entire province has 68 ships with overdue debts, of which 65 ships have been transferred to bad debt, with a total bad debt value of 420.3 billion VND, accounting for 80% of the principal debt according to Decree 67.
The reasons for the bad debt of the 67 ship owners to the banks have been assessed, one of the main reasons being the Covid-19 pandemic that has lasted for 3 consecutive years, and the ships have been quarantined. In addition, the opportunity to exploit and fish in foreign waters has been limited due to the expiration of the Agreement on the Common Fishing Zone in the Gulf of Tonkin; the State has strictly implemented measures to strictly control the situation of fishermen illegally exploiting in foreign waters, in order to ensure compliance with the European Union's IUU regulations. Another reason is that the fishing grounds in Vietnam's waters are increasingly depleted of seafood resources. Meanwhile, seafood prices have fallen sharply despite limited output. Some of the fishing equipment of the ships built from the beginning are outdated and damaged.
Another difficulty for fishermen is that since the end of 2019, PJICO Nghe An Insurance Company has stopped selling hull insurance to ships that have borrowed capital under Decree No. 67/2014/ND-CP, causing some ships whose insurance has expired to not be able to buy new insurance, or have to buy external insurance without receiving cost support under the State's policy. For ships that have purchased insurance from PJICO, insurance compensation is also prolonged, causing financial difficulties for ship owners.
What is the solution for ship 67?
Faced with the difficult situation of the 67 ship owners in the province, the State Bank of Nghe An Branch has proposed that the Government allow the implementation of a ship owner conversion mechanism with more flexible conditions, ensuring that the asset value at the time of conversion corresponds to the value of the debt that the new ship owner receives from the old ship owner, the outstanding debt difference between the current outstanding debt and the actual value of the ship together with overdue principal debts and interest incurred will be the responsibility of the old ship owner to continue to repay to the bank or the State will have other support solutions.
Consider adjusting the lending interest rate applied to ships borrowing capital under Decree 67/2014/ND-CP in the context of decreasing lending interest rates, all subjects affected by the Covid-19 epidemic are entitled to support from the Government and the banking sector. Consider and have appropriate mechanisms to freeze and write off debts for customers borrowing under Decree 67 who are subject to objective and force majeure risks.
Ms. Nguyen Thi Thu Thu - DirectorState Bank of Vietnam, Nghe An Province BranchThe unit also proposed that the Ministry of Finance soon issue documents amending and guiding the implementation of insurance rules for fishing vessels borrowing capital according to Decree 67/2014/ND-CP in accordance with current regulations; at the same time, direct PJICO to continue selling insurance to fishermen and promptly pay insurance premiums to fishermen when they encounter risks.
Mr. Tran Xuan Hoc - Deputy Director of the Department of Agriculture and Rural Development said: Besides some ship owners who seriously carry out production and diligently pay the bank, there is still a situation where the owner of ship 67 intentionally delays paying the bank loan.
The Ministry of Finance should soon continue to have mechanisms and policies to support fishermen in purchasing crew and vessel insurance. For fishermen, it is necessary to pay attention to carefully studying fishing grounds so that each sea trip is effective. Fishermen must eliminate the idea of procrastination, actively produce and have a plan to repay bank loans according to regulations. Commercial banks also need to create conditions for serious ship owners who produce, but due to objective factors, cannot repay their debts on schedule, by extending the debt so that fishermen have conditions to repay gradually...
