Decision No. 276/QD-TTg of February 04, 2013, approving the scheme for restructuring Vietnam national shipping lines (Vinalines) 2012 - 2015

DECISION

APPROVING THE SCHEME FOR RESTRUCTURING VIETNAM NATIONAL SHIPPING LINES (VINALINES) 2012 - 2015

THE PRIME MINISTER

Pursuant to the Law on Government organization dated December 25th 2001;

Pursuant to the Prime Minister’s Decision No. 929/QD-TTg dated July 17th 2012 of the Prime Minister, approving the Scheme for restructuring state-owned enterprises, focusing on state-owned corporations and state-owned general companies 2011 – 2015;

At the proposal of the minister of transport and the member assembly of (Vinalines)

DECIDES:

Article 1.Approving the Scheme for Restructuring Vinalines 2012-2015, in particular:

I. TARGETS

Ensure that Vinalines has reasonable structure, focusing on 03 primary industries including shipping, harbor management, and maritime services; step by step resolve the difficulties during 2012 – 2015; create the stability and development suitable for the market conditions during 2016 – 2020; make Vinalines a pivotal state-owned enterprise in shipping, harbor management, and maritime services, contributing to the success of the Vietnam’s Marine Strategy by 2020 and later.

II. CONTENTS

1. 1. Lines of business

a) Primary lines of business

- Providing maritime, waterway, road, and multimodal transport services;

- Operating harbors and river ports;

- Providing warehouse services, logistics services; broker maritime services; provide ships, towing services, crew transit, and other ancillary maritime services.

b) Lines of business related to the primary lines of business:

- Repairing maritime means of transport; producing, trading, leasing means and equipment for transport and loading;

- Labor export and maritime labor supply for Vietnamese and foreign organizations;

- Exporting maritime vehicles, equipment, materials; supplying materials, foods, and freshwater.

c) Other lines of business are decided by the Minister of Transport.

2. The parent company – Vinalines is 100% funded by the state, equitized in 2015.

The dependent accounting units of Vinalines:

- Maritime Labor Export company;

- Branch of Vinalines in Ho Chi Minh city;

- Branch of Vinalines in Hai Phong city;

- Representative office of Vinalines in Singapore.

3. Reorganizing the business and restructuring investments

a) Harbor industry: focus on developing the existing harbor; focus on comprehensive investment to the efficient operation of the harbors in the North in Hai Phong, Quang Ninh, and the harbors in the South in Cai Mep – Thi Vai and Ho Chi Minh city; reviewing and reducing expenses, ensure the efficient operation of harbors.

Stop the Project of  Van Phong International Entrepot in order to attract other Vietnamese and foreign investors to make investments in accordance with the planning.

b) Shipping industry: restructure the fleet to satisfy the demand of the market; provide a plan for selling old and unproductive ships to reduce loss; focus on the domestic market; raise the market share of export and import shipping to 25% - 30%.

Review the ship building program to suit the financial resources of Vinalines and demand of the market. Delay building 06 ships, extend the progress of 11 ships, and finish building and putting into operation 07 ships in ship building programs agreed with Vinashin Business Group (Vinashin).

c) Service provision: develop the ancillary maritime services, especially logistics, towards package services and expansion to other countries; establish some dry docks, goods distribution centers, and developed maritime services at transport epicenters.

Convert ship building companies into maritime service providers, and equitize them when possible.

4. Classification and arrangement of member unit of Vinalines during 2012 – 2015 period:

a) The companies of which 100% of charter capital is held by Vinalines:

- Song Hau Ship Building Single-member LLC.

- Ca Mau Ship Building Single-member LLC.

b) Equitized enterprises.

- The companies of which 75% of charter capital is held by Vinalines:

+ Saigon Port Single-member LLC.;

+ Hai Phong Port Single-member LLC.;

+ Da Nang Port Single-member LLC.;

+ Quy Nhon Port Single-member LLC.;

+ Quang Ninh Port Single-member LLC.;

+ Can Tho – Cai Cui Port Single-member LLC. (Can Tho port is merged into Cai Cui port );

+ Nha Trang Port Holding LLC.;

+ Cam Ranh Port LLC.;

+ Nghe Tinh Port Single-member LLC.;

- The companies of which 50% - 65% of charter capital is held by Vinalines:

+ Khuyen Luong Port Single-member LLC.;

+ Nam Can Port Single-member LLC.;

+ Bien Dong Shipping LLC.;

+ Vinalines Shipping Company (associated company);

+ Vinalines Container Shipping Company (associated company);

+ Hai Phong Vinalines Maritime Service Company (associated company);

+ Nha Trang Vinalines Maritime Service Company (associated company);

c) The companies of which 50% - 65% of charter capital is held by Vinalines:

- Vinalines – Dinh Vu Port JSC.;

- Vinabridge;

- Transvina Co. Ltd.

- Vinalines - Logistic JSC.;

- Dong Do Marine JSC.;

- Vietnam Ocean Shipping JSC.;

- Vitranschart JSC.;

- Vietnam Ocean Shipping Agency Corporation;

- Vinaship JSC.;

- Northern Shipping JSC.;

- Doan Xa Port JSC.;

- International Labor Cooperation JSC.– ILACO;

- Vimadeco JSC.;

- Cai Lan Port Investment JSC.;

d) The companies of which 50% of charter capital is held by Vinalines:

- Vinalines Maritime College;

- + Cai Mep International Terminal LLC.;

- Saigon Port International Container Service Partnership (SSIT);

- + SP – PSA International Port LLC.;

dd) Disinvestment:

Vinalines has disinvested from 37 enterprises during 2012 – 2015 period (in the Annex enclosed herewith).

e)  Maritime Petroleum Trading Company is merged into Vinalines Petrol Company;

g) Dissolved enterprises:

- Branch of Vinalines in Can Tho city (dependent accounting unit);

- Vina – STC

h) Bankrupted enterprises:

- + Vinashinlines LLC.;

- Falcon Shipping JSC.

5. Financial restructuring:

- Focus on restructuring the loans for investment in ships from the Vietnam Development Bank and other credit institutions towards freezing principal, reducing and removing interest;

- Complete the plan on increasing charter capital, then submit it to competent authorities for approval;

- Complete application for loans to restructure the loans in Project 2 belonging to the program “Restructuring State-owned enterprises and supporting company administration” given by Asia Development Bank at 100 million USD;

- Utilize other appropriate financial sources for restructuring debts.

6. Restructuring personnel:

Layoff workers, especially indirect workers; maintain 70% of maritime workers that are formally trained, including 20% technically qualified workers, towards specialization; focus on the employment and training of officers and crewmembers eligible to work under international standards.

7. The restructuring company administration must focus on the following contents:

- Amend and complete the regulations on company administration, ensure clear assignments and decentralization; emphasize the responsibility and raise the effectiveness of the management of Vinalines;

- Concentrate resources of forecasting, finding, and expanding domestic and international markets as the basis for building development, investment, and business plans, and plans for responding to market developments.  Combine shipping, harbor development, and maritime service provision in order to create a soft cooperation, improve support and incentives in accordance with market rules and laws;

- Intensify the application of advanced technologies and managerial science in the world, build systems of quality control, technical – economic standards, and capacity of each ship, each harbor, each service; ensure an accurate, compact, quick, efficient, and transparent managerial system;

- Intensify internal control.

III. IMPLEMENTATION ORGANIZATION

1. The Ministry of Transport shall:

a) Guide, supervise, and inspect the implementation of this Decision; send reports to the Prime Minister periodically; preside and cooperate with relevant agencies in resolving new difficulties, or send reports to the Prime Minister on overwhelming issues.

b) Cooperate with relevant agencies and instruct Vinalines to formulate the regulation on the organization and operation of Vinalines, then submit it to the Government for promulgation.

c) Decide the adjustment of the charter capital of Vinalines after getting consent from the Ministry of Finance.

2. The State bank Vietnam shall request commercial bank and domestic credit institutions to consider restructuring the loans for buying and building ships taken by Vinalines; consider giving loans serving the business of the fleet if Vinalines and its member could prove the efficiency and solvency.

3. The Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Internal Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State bank of Vietnam shall cooperate with the Ministry of Transport in fulfilling the tasks assigned in Clause 1 Part III of this Article.

4. The Member assembly of Vinalines shall:

a) Formulate and submit the 5-year plan for production, trading, and investment to competent authorities for approval.

b) Guide the arrangement and equitization of member enterprises according to the approved master plan 2011 – 2013. Provide specific roadmap and plans for finishing disinvestment from the industries not related to the primary lines of business of Vinalines; formulate a plan for restructure the contribution proportion of Vinalines to SSIT, SP – PSA, in accordance with current regulations, and submit it to competent authorities for consideration and decision.

c) Direct the formulation and approve the plan for reorganizing the business and restructuring the members in accordance with this Scheme in Q1 2013.

d) Focus on restructuring company administration in accordance with Clause 7 Part II of this Article.

Formulate and implement the regulations of law observance, achievement of targets, implementation of strategies, plans, fulfillment of assigned tasks, and assessment of results of subsidiary companies and managers as prescribed.

dd) Send quarterly reports on the implementation of this Scheme to the Ministry of Transport, the Ministry of Finance, the Steering Committee of Reforming and developing enterprises.

Article 2. This Decision takes effect on the date on which it is signed.

Article 3. The Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of People’s Committees of central-affiliated cities and provinces, the President of the Steering Committee of Reforming and developing enterprises, the Member assembly of Vinalines are responsible for the implementation of this Decision.

ANNEX

CAPITAL WITHDRAWAL PLAN OF VINALINES 2012 - 2015
(enclosed with the Prime Minister’s Decision No. 276/QD-TTg dated February 04th 2013 of the Prime Minister)