What's up with the Ferries?

http://hamptonroads.com/2011/09/us-weighs-four-bids-hawaiian-superferries

■ 13 SEPTEMBER 2011 | 1:45 PM

U.S. weighs four bids on Hawaiian superferries

The Alakai and Huakai, two Hawaiian superferries docked at Lambert’s Point , may soon be changing hands.

The U.S. Maritime Administration, which put the two vessels up for sale on an “as is, where is” basis in late June, has received four bids.

They were due by 5 p.m. July 20.

The administration is “working expeditiously with bidders and other interested parties in evaluating its options, with a goal of maximizing the government’s return from these vessels,” according to a spokeswoman.

The June 20 sale notice in the Federal Register made it clear the ferries would not be given away.

The administration reserved “the right to reject any and all bids and to seek additional bids from the bidders and any other interested parties.”

The plan was to sell the ferries together – they would be sold separately only if they could be sold at the same time, according to the notice.

Also required: cash sale or owner-procured financing, plus a $500,000 non-refundable deposit for each ferry.

The administration took possession of the ferries in July 2009 after a bankruptcy judge ruled that the owner – Hawaii Superferry Inc. – could abandon them to lenders, owed nearly $159 million. The administration, which guaranteed the loans, moved them to Norfolk. -- Robert McCabe

Damn, just realized something...

This "unofficial" blog outlasted the official entity...

4 Cheap Offers, No Deal, MARAD ain't Desperate

Best review of the news we have seen from Kyle at DMZ Hawai'i:

Source: http://www.dmzhawaii.org/?p=9268

Taxpayers Stuck With Unsold Ferries in Default

August 10, 2011 by kyle

Bloomberg published an article about the wasteful Maritime Administration (MARAD) loan guarantee program, which became the reluctant owner of two high-speed ferry ships after the Hawaii Superferry went bankrupt in 2009:

Two passenger ferries sit at a dock in Norfolk, Virginia, waiting for someone to take them off the government’s hands.

The U.S. Maritime Administration has taken bids for them in an attempt to recover some of the $138 million in taxpayer money paid to cover defaults on loans it guaranteed for the owners, Hawaii Superferry Inc. The company sought bankruptcy protection and defaulted in 2009.

The unwanted ferries are reminders of the defaults and oversight problems reported as recently as December in the so- called Title XI program as vessel owners have won $798 million in new loan guarantees this year, the most since 2001. As it considers two applications for an additional $712 million in guarantees, the maritime agency is trying to recover what it can on $311 million paid out to cover six defaults since 2008.

After protests and legal challenges disrupted Hawaii Superferry operations, the Hawai’i Supreme Court finally ruled that the special legislation retroactively exempting the Superferry from the state’s environmental review laws was illegal. However, it was the company’s arrogance and collusion with state officials to circumvent the environmental review process that doomed the venture from the start. As the article points out, even down to the rationale for the MARAD loan guarantee program, the Superferry project was driven by politics and special interests:

The program’s bipartisan supporters, such as former Senator Trent Lott, a MississippiRepublican, and Democratic Senator Daniel Inouye of Hawaii, credit Title XI with creating jobs and supporting national defense and the U.S. commercial fleet. The U.S. fleet shrank from 17 percent of the world’s oceangoing merchant ships in 1960 to less than 1 percent in 2008, according to the Bureau of Transportation Statistics.

Five guarantees approved since President Barack Obama took office in 2009 will create 8,000 jobs, maritime agency Administrator David Matsuda said in an e-mail.

The program has survived elimination attempts because supporters in Congress “logroll” to keep funding it, said Chris Edwards, director of tax policy studies at theCato Institute. “Some of these ships are built in their districts, and they’ll fight to the death for it,” Edwards said in an interview. His Washington-based group advocates reducing government spending and lower taxes.

[...]

Politics drove decisions to give guarantees to some companies that eventually defaulted, Clayton Cook, the maritime agency’s general counsel from 1970 through 1973, said in an interview.

He cited American Classic Voyages Co., chaired by billionaire real-estate investor Sam Zell, which received a $1.1 billion guarantee for two cruise ships under the banner of Project America. Five subsidiaries of the company accounted for $330 million of the $490 million that defaults cost the government from 1993 through 2002.

Inouye sponsored a provision in a defense bill called the U.S. Flag Cruise Ship Pilot Project, he said at a hearing in 1999. The project gave American Classic Voyages exclusive rights to operate cruise ships in Hawaii, the company said in a Securities and Exchange Commission filing in 2000. The ships were to be built at Ingalls Shipbuilding in Pascagoula, Mississippi, Lott’s hometown. Lott declined to be interviewed.

American Classic Voyages filed for Chapter 11 bankruptcy in October 2001. The default cost taxpayers $187 million, according to the maritime agency.

Hawaii Connections

“The project, while proceeding with considerable difficulty, including delays and increased costs in construction, ultimately became a victim, like many other industries, of the September 11 attack on our nation,” Inouye said in a floor speech in 2003.

Inouye didn’t respond to a question about the default, saying in an e-mail that “loan-guarantee programs are one of the many ways that government can partner with the private sector to create jobs and expand the economy.”

Hawaii Superferry, chaired by former Navy Secretary John Lehman, spent up to $20,000 a year lobbying Congress, the maritime agency, the Environmental Protection Agency and other agencies on Title XI and “vessel financing issues” between 2004 and 2006, according to federal lobbying disclosures. The loan guarantees helped the firm finance the ferry purchases from shipbuilder Austal USA, based in Mobile, Alabama.

The Superferry’s default occurred because a Hawaii court ruled the state shouldn’t have let the company skip an environmental impact study, said William Schubert, maritime administrator from December 2001 to February 2005. “The people of Hawaii wanted the service, and when it went to the state Supreme Court it pretty much put an end to the program,” Schubert said in a phone interview.

The quote from Schubert is incorrect on a few ponts. Activists figured out early on that the Superferry business model was unprofitable. As Austal USA, the shipbuilder, pointed out to the Hawaii Superferry executives in the beginning, the ships on order were too large for the Hawai’i market. But they did meet military specifications, which in the end, paid off for Austal, who leveraged the Hawaii Superferry as a proof of concept to win a contract to supply Joint High Speed Vessels to the military. Some people from some islands may have wanted the Superferry. But many strongly opposed the project as another threat to the environment and sustainability. And Hawaii taxpayers were left holding the bag for $40 million in state harbor improvements that were never recovered from the company.

"As is, Where is" Two Fast Ferries for Sale, Cheap?

Hot damn, when it rains it pours.

This is where we find out who benefits from them. Whoever hopes to buy them at pennies on the dollar benefits from all the other losses:

Source: http://frwebgate3.access.gpo.gov/cgi-bin/TEXTgate.cgi?WAISdocID=N2BQil%2F0%2F1%2F0&WAISaction=retrieve

[Federal Register: June 20, 2011 (Volume 76, Number 118)]

[Notices][Page 35941-35943]

From the Federal Register Online via GPO Access

[DOCID:fr20jn11-127]
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Maritime Administration

Offer for Public Sale of Two High Speed Vessels

AGENCY: Maritime Administration (MARAD),

Department of Transportation.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: MARAD is offering for public sale, on an ``as is, where is''
basis, two fast ferry vessels, ALAKAI, Official Number 1182234, and

HUAKAI, Official Number 1215902.

DATES: Bids may be submitted on or before 5 p.m. July 20, 2011.

FOR FURTHER INFORMATION CONTACT: David Heller, Office

of Shipyards and Marine Engineering, Maritime Administration,

1200 New Jersey Avenue, SE., Washington, DC 20590. Telephone:

(202) 366-1850; or e-mail David.Heller@dot.gov. Copies of this notice

may also be obtained from that office. An electronic copy of this

document may be downloaded from the Federal Register's home

page at: http://www.archives.gov and the Government Printing

Office's database at: http://www.access.gpo.gov/nara.

SUPPLEMENTARY INFORMATION: The Maritime Administration

(``MARAD''), an agency of the U.S. Department of Transportation,

is offering for public sale, on an ``as is, where is'' basis, two fast ferry

vessels, ALAKAI, Official Number 1182234, and HUAKAI, Official

Number 1215902 (each a ``Vessel'' and collectively, the ``Vessels'').

MARAD will warrant title to the Vessels and convey title free and

clear of all liens. The Vessels were previously owned by Hawaii

Superferry LLC and MARAD has obtained title through foreclosure.

The Vessels were built in Mobile, AL by Austal USA and are currently

berthed at Lambert's Point Dock, Norfolk, VA. Specifications for the

Vessels are set forth at the end of this notice (no guarantee or warranty

as to specifications is made by MARAD).

All bids must contain specific information on the offer price, details of

any financing for the purchase of the Vessels, timing of the closing of

the proposed transaction, affidavit stating that the bidder is not

affiliated with the former owner, Hawaii Superferry LLC, or any of its

officers, directors or significant equity owners, and any contigencies

that could affect the closing of the transaction. Bidders may be either

U.S. citizens or foreign citizens. However, because the Vessels are U.S.

flagged, any bidder who is a foreign citizen must be prepared to comply

promptly with the provisions of 46 U.S.C. 56101 and MARAD's

implementing regulations. Responsive and successful bids should

include the following components: (1) Purchase of both Vessels

(MARAD only will consider an offer for sale of a single Vessel if

concurrent sale of both Vessels to separate buyers can be arranged),

(2) monthly reimbursement of any lay-up costs for the Vessels between

the execution of a sale contract and closing of the sale, (3) purchase of

the Vessels on an ``as is, where is'' basis with MARAD only required to

warrant title to the Vessels and that they are free and clear of liens, and

(4) cash sale or owner-procured financing (proposals with MARAD

financing of the Vessels will not be considered).

The successful bidder will be required to submit a $500,000 deposit

for each Vessel. Deposits must be made by wire transfer or in the form

of a certified check, drawn on a U.S. bank and made payable to MARAD,

within five business days of the bidder being advised that its bid is
approved by the Maritime Administrator. The successful bid will be

considered non-responsive if the bid deposit is not received in the

required five business day time frame. The deposit is nonrefundable.

No interest will be paid on the deposit. The successful bidder's deposit

will be credited toward the bid offer. The successful bidder may not

assign its right to the Vessel without consent of MARAD.

The successful bidder will be required to sign the MARAD form vessel

sale contract that, among other provisions, incorporates all of the

requirements set forth in this notice.

MARAD reserves the right to reject any and all bids and to seek

additional bids from the bidders and any other interested parties.

Arrangements to inspect the Vessel must be made through MARAD.

All inspections will be at the bidder's own risk and expense. For

additional information or to arrange an inspection, please contact

Mr. David Heller at (202) 366-1850 or david.heller@dot.gov. Bids

and affidavits must be submitted by overnight courier to the Maritime

Administration, Office of Marine Financing, 1200 New Jersey Ave., SE.,

Room W23-432, Washington, DC 20590, Attention: Mr. Daniel Ladd,

by 5 p.m. 30 days from date of publication of this notice.

------------------------------------------------------------------------

By Order of the Maritime Administrator.

Dated: June 14, 2011.

Murray Bloom,
Acting Secretary, Maritime Administration.
[FR Doc. 2011-15147 Filed 6-17-11; 8:45 am]
BILLING CODE 4910-81-P

Aggressive Corrosion in Austal's Pride and Joy

Was thinking about getting rid of this page just last week.

But wait!, the story never seems to die:

Source: http://www.bloomberg.com/news/2011-06-17/navy-finds-aggressive-corrosion-on-austal-s-combat-ship-1-.html

"Navy Finds ‘Aggressive’ Corrosion on New Ship"
By David Lerman and Tony Capaccio - Jun 17, 2011

The U.S. Navy has discovered “aggressive” corrosion in Austal Ltd. (ASB)’s first new combat ship designed for operating close to shore.

The corrosion is in the propulsion areas of the USS Independence, the Littoral Combat Ship built by the Mobile, Alabama-based subsidiary of Australia’s Austal and General Dynamics Corp. (GD)

“This could be a very serious setback,” said Norman Polmar, an independent naval analyst and author in Alexandria, Virginia. “If the ship develops a serious flaw, you’re not going to continue producing them.”

Permanent repair will require drydocking the ship and removing its “water jets,” a key component of the propulsion system, the Navy said in a written statement to congressional appropriations committees provided to Bloomberg News.

Aluminum-hulled ships such as Austal’s tend to rust faster than steel-hulled ships, Polmar said. “But I’m surprised it happened so early,” he said. “This ship is brand new.”

The corrosion discovery in a ship that was commissioned in January 2010 marks another blow to the Littoral Combat Ship program, planned to ultimately consist of 55 ships. In February, the Navy discovered another ship in the series, from another construction team, had a crack through the hull.

Close to Shore

The Littoral Combat ships are designed to operate closer to shore than the rest of the Navy's surface fleet. They would make up about 17 percent of the Navy’s planned 313-ship fleet. Missions include clearing mines, hunting submarines and providing humanitarian relief.

The Navy in December awarded contracts for as many as 10 Littoral Combat ships to each of two teams of builders, led by Lockheed Martin Corp. (LMT) and Austal.

Austal won a $465 million contract that could reach as much as $3.78 billion if all options are exercised, the Navy announcement said. Building all 55 ships will cost the Navy at least $37.4 billion, according to a Pentagon report released in April.

Officials were concerned about the potential for corrosion during construction of the ship because of “dissimilar metals,” particularly near the steel propulsion shafts, the Navy memo said.

Temporary repairs will allow the ship to operate safely in the interim, the Navy said. The Littoral Combat Ships are designed to last about 25 years. Each ship is expected to cost about $36.6 million a year to operate and support.

Two Versions

The Navy is buying two versions from two teams of builders. The other team consists of Bethesda, Maryland-based Lockheed and Marinette Marine Corp. of Marinette, Wisconsin.

The first Lockheed ship developed a crack as long as six inches through its hull during sea trials in February, prompting a Navy investigation of the design.

Calls to Austal and calls and e-mails to General Dynamics weren’t immediately returned.

The Austal ship is now in Mayport, Florida, undergoing additional testing, the Navy said in its statement. A permanent repair of the existing corrosion damage would be conducted next year, the Navy said.

The Navy statement did not provide an estimate of the cost of the repair work.

Don't Succeed, Try, Try Again

HB191.DOC HB191 Status
Context: The purpose of this measure is to establish the Hawaii state ferry system ...a new chapter to be appropriately designated and to read as follows: "CHAPTER HAWAII STATE FERRY SYSTEM Definitions. As used ...in this chapter, unless the context indicates otherwise: "Authority" means the Hawaii state ferry system authority. "Department" means the department of transportation. ...Director" means the director of transportation. "Ferry system" means the Hawaii state ferry system. "Vessel" ...
Filesize: 26476
Electronic File Date: 1/20/2011 8:26:20 PM

Problems with the New Littoral Combat Ship Dual Contracts Plan

Source: http://www.navytimes.com/news/2010/11/defense-navy-picks-both-lcs-designs-110310/

Navy asks Congress to buy both LCS designs
By Christopher P. Cavas - Staff writer Nov 3, 2010

Rival teams from Lockheed Martin and Austal USA have been waiting all year to see which of their designs would be chosen for the Navy’s littoral combat ship competition. Now, if the Navy gets permission from the lame-duck Congress, the winner could be both...

Source: http://www.informationdissemination.net/2010/11/inside-look-at-new-littoral-combat-ship.html

Thursday, November 4, 2010

Inside Look at the New Littoral Combat Ship Plan

Posted by Galrahn

...The new plan to build 10 of each hull type is said to come as an opportunity. Apparently the competition has produced favorable contract prices from both contractors, and as such it is either cost neutral, or potentially cost saving, to buy 20 ships under these two contracts over the entire Five-Year plan instead of 19 under the old plan.

Dual Award	FY2010	FY2011	FY2012	FY2013	FY2014	FY2015	Total
Marinette	1	1	2	2	2	2	20
Austal	1	1	2	2	2	2
Total	2	2	4	4	4	4

There are a few hurdles to the new plan though.

In order to go with the new plan, the Navy needs Senate and Congressional approval to change the acquisition strategy. There are already statements up on both Alabama Senator websites, Senator Shelby and Senator Sessions. As a senior member of the Senate Armed Services Committee, Senator Sessions appears to have spoken to Ray Mabus about this plan on Wednesday morning and filled in on the details, because the statement implies he has thrown his full support into the plan. Senator Shelby has yet to learn the details, and finishes his statement by having concerns he hopes to work out with the Navy as he learns more details. Neither Senator Kohl nor Senator-elect Johnson has posted a statement on this news.

Both shipyards would have to agree to the new plan, and it appears pretty obvious both would do it happily. On just the details as reported in the press, Austal shares soared up 20% and trading had to be halted. Fox11 in Wisconsin quoted Richard McCreary, the President and CEO of Marinette Marine, the deal "would be a very positive event." I also thought is was noteworthy that Tim Colton, a highly respected shipbuilding consultant well known for his very clever commentary on Navy shipbuilding responded tonight by saying "Amazing, and somewhat hard to believe!"

I agree with Tim Colton that this is very hard to believe, particularly when I started looking at the details of the plan. This plan clearly comes from somewhere, and I believe it comes from way up the civilian chain of command - and by that I mean it almost certainly comes directly from the White House. There is way too much industrial and political consideration in this acquisition strategy for it not to be politically driven, which suggests to me this approach represents the Obama administrations shipbuilding jobs program. Only by accepting it as an Obama administration jobs program can you explain the enormous and obvious flaw in the plan.

The Big Flaw

My primary problem with the new acquisition strategy is how the plan to build both ships does not address the problem of each ship class having a unique combat system. Prior to the Milestone B review, the Navy told Inside the Navy (subscription only):

The Navy will draw up total life-cycle cost estimates for both the Lockheed Martin and General Dynamics versions of the Littoral Combat Ship before the program goes before the Defense Acquisition Board this year for its Milestone B. review.

The service included the announcement in a response to a Government Accountability Office report that criticized LCS life-cycle estimates.

In the September 16, 2009 statement that announced the downselect acquisition strategy, the Navy stated the plan "reduces program ownership costs, and meets the spirit and intent of the Weapons System Acquisition Reform Act of 2009." With each class having unique combat systems, this statement is no longer accurate. By building both designs but not choosing a single combat system, the Littoral Combat Ship program builds a dozen orphan ships rather than just two for some future CNO, SECDEF, etc... to retire, sell, or sink early as a cost savings measure.

The qualification standard for a "hybrid sailor" is higher on the Littoral Combat Ship than on other vessels in the Navy, and the qualifications necessary for one combat system has nothing in common with the other combat system - meaning if the Navy buys both - "hybrid sailors" are not interchangeable among the two classes of Littoral Combat Ship without undertaking a new set of extensive (and expensive) qualifications. Building both hulls with different combat systems will cost the Navy a lot more in the long run than choosing a single combat system in a competition, and spending a little bit of money up front to standardize the combat system on both ships.

The Navy can afford to do this, because there is a dirty secret here that must be addressed anyway. You know that 30mm gun for the surface warfare mission module? Word in the CIC is that it does not work for either combat system right now on either ship, in fact it may not work well with the combat system on the LPDs either, as we discussed the other day. In order to integrate new weapon systems into the Littoral Combat Ship, for each new system extensive work will be required to insure the new system works with both of the combat systems. It will not take long before the Navy spends more money maintaining and integrating new technologies into both combat systems among 2 fleets of 12 ships than it would cost if the Navy just bit the bullet now and selected a single combat system for both ships.

Selecting a single combat system would still allow the Navy to proceed under the plan to build 10 copies of both versions of the ship, although the Navy would probably be forced to get out bids for a new contract to one of the shipbuilders. If the Navy was to select, for example, the AIS combat system from General Dynamics for both hulls, the Navy could then proceed by building the 2 ships in FY2010 and 2 ships in FY2011 as Austal versions while the combat system on the Lockheed Martin version of the ship was converted to the AIS system. With an Austal build rate of 2/2/2/2/1/1 over the next 5 years, the Navy would begin funding the Lockheed Martin version of the ship with Marinette in FY 2012 under a 2/2/3/3 acquisition plan. Such a plan would allow the Navy to build at the same rate 2/2/4/4/4/4 between FY10 - FY15 as under the new plan, but would standardize the combat system.

Failure to standardize the combat system will result in early retirements of one class of Littoral Combat Ships, because it will cost too much before the end of one of the ships hull life to maintain both classes, and some future DoD/Navy leader absolutely will retire ships early to save costs - that's a fact. How do we know? Because the expense of maintaining unique, uncommon systems on ships is the same criteria ADM Roughead and other Navy leaders have used to retire ships over the last decade!...

Source: http://cdrsalamander.blogspot.com/2010/11/lcs-choice-1-or-2-navy-answers-yes.html

Wednesday, November 03, 2010

LCS choice 1 or 2? Navy answers, "Yes!"

Posted by CDR Salamander

From the same Generation of leadership that gave us "Every Child Gets a Trophy" and turned the Navy Achievement Medal into an addendum to PCS orders - via NavyTimes,

The long-awaited decision on which competitor will win the Navy’s littoral combat ship competition is expected to be revealed Wednesday afternoon, and the answer will surprise most people.

The winner? Both teams.

Sources said the Navy, rather than selecting one team to build 10 ships, will instead award construction contracts to both Lockheed Martin and Austal USA to build 10 of their ships, for a total of 20 new LCS hulls.

One source said the ships will continue to be built with separate combat systems, rather than go through a time-consuming effort to install a common system on all the ships.

Really? Really?

I don't want to hear any more from these people about configuration control, systems commonality or gains from economies of scale. I don't want to hear them tell one more Commanding Officer that he needs to make hard choices.

LCS - a dog's breakfast of intellectual fail from CONOPS through production. Almost as bad as sending an XO to Court Martial for failing to implement something that doesn't exist.

If this pans out - it is only one thing; full-spectrum systemic fail.

Would someone make a d@mn decision. The right one would be to kill the entire program before it does more damage to our long-term Operational and Tactical capabilities ... but no ... punt the decision to others to deal with...

Hawaii Superferry’s Bankruptcy = US Navy Opportunity

A good wrap-up article:

Source: http://www.defenseindustrydaily.com/Hawaiian-SuperFerry-Files-for-Bankruptcy-05472

"Hawaii Superferry’s Bankruptcy = US Navy Opportunity"

14-Oct-2010 14:04 EDT

Related Stories: Americas - USA, Corporate Financials, Events, Other Corporation, Surface Ships - Other

Hawaii Superferry
(click to view full)

In his April 6/09 discussion of the FY 2010 budget, Secretary of Defense Robert M. Gates said that the US military wanted to charter another 2 “JHSV-like” fast catamaran ships from 2009-2011, untilthe JHSV ships begin arriving. That meant JHSV-winner Austal would find its products competing once more with Incat, which has had 4 of its wave-piercing catamarans chartered by various American services. Their Swift wave-piercing catamaran is currently chartered by the Navy as HSV-2, just as the Austal-built Westpac Express is chartered by US Military Sealift Command for the Marines.

One obvious option was the Hawaiian Superferry catamarans, a larger pair of Austal-built ships that resemble the Westpac Express….

Alakai arrives
(click to view full)

Oct 10/10: The US Maritime Administration (MARAD) buys the 2 ferries for $25 million each at a US District Court auction in Norfolk, VA. MARAD was able to use its owed debts to cover the bid cost, and will now look to sell the ferries. The US Navy has expressed interest in buying them. Maritime Matters | Alabama Press-Register | Honolulu Star-Advertiser | KITV Honolulu | Virginia Pilot | Gannett’s Navy Times.

May 2010: The federal government sues to get title to the 2 vessels, in order to recoup its $150 million loan guarantees. The suit leads to the October 2010 auction.

Feb 11/10: The former Hawaii superferries Huakai and Alakai are pressed into service by the USA’s Maritime Administration (MARAD), in the wake of the disaster in Haiti. The ships are managed by Hornblower Marine Services (HMS), and the deployment is seen as an earl concept test of the similar JHSV design’s operations. Haiti’s lack of port infrastructure has not, to date, been a major problem for these ships. Maritime Executive magazine.

March 30/09: Hawaii Superferry files for Chapter 11 bankruptcy, as it reportedly has just $1 million in cash, and is facing a $2.9 million principal and interest payment on one of the ferry construction loans. MarineLog’s “Hawaii Superferry files for Chapter 11” explains the situation, and details the firm’s various creditors.

• The US Maritime Administration (MARAD) is owed more than $135.7 million because of 2 loan guarantees under the Title XI program
• Shipbuilder Austal USA is owed $22.9 million, as a 2nd mortgage, on construction fees
• The state of Hawaii, which provided $40 million in harbor improvements, held the 3rd mortgage.
• Superferry is also in default to Guggenheim Funding LLC for $51.7 million, related to a secured note in August 2007.
• J.F. Lehman & Co., the controlling private investor in the project, put up $85.2 million of the $92.9 million issued in preferred stock. The firm was founded by former Secretary of the Navy John F. Lehman, and seems set to lose its entire investment.

Unsecured creditors listed in the bankruptcy petition are headed by:

• The Harbors Division of State of Hawaii: disputed claim for $731,080
• MTU: $544,653 for engine maintenance related services
• Hornblower Marine Services: $113,685 for management fees and services
• Austal USA: $78,198 for travel and labor for professional services

See also: Journal of Commerce.

March 16/09: The Hawaiian Superferry service is shut down, after a Hawaiian Supreme court court decision strikes down a 2007 law that allowed them to operate. The ruling effectively mandates even more environmental reviews for the service, and forces the ferries to stop operating in the mean time. Alakai had been operating between Oahu and Maui. AP.

Additional Readings

• Maritime Professional (August 2010) – Waiting for that Ship to Come In. Joseph Keefe takes a sharp look at the Hawaii Superferry saga. [Ed. note - This is a funny, if not accurate read.]

Well, we're almost done here...

We're told MARAD had the winning bids of $25 million on each of the 2 Hawaii Superferries over and above what was already owed to MARAD.

Now, what does MARAD do with those 2 vessels?

Ferries went to Auction Yesterday?

Source: http://maritimeprofessional.com/Blogs/The-Final-Word-with-Joseph-Keefe/September-2010/Shopping-at-DOT--What%E2%80%99s-in-Your-Wallet-.aspx

Global Maritime Analysis with Joseph Keefe > September 2010
"Shopping at DOT: What’s in Your Wallet?"

...The Real End of Title XI

A regular reader of this column sent me the DOT NOTICE OF PUBLIC AUCTION links for the sale of the vessels ALAKAI and HUAKAI and then added simply via E-mail, “You can get them for a penny above what is owed.” Before you start rifling through the sofa cushions for spare change, just know that Marad’s David Matsuda is on record as pledging to protect the government’s interests in the matter by matching any bid that does not equal the full amount owed. A Marad PAO confirmed that metric on Monday...

Click on the two vessel names above. They go to the classifieds placed a little more than a week ago for the auction of each of the vessels. Notice they were being auctioned separately... Waiting to hear who bought 'em and at what prices, no doubt different prices.

Dicus: Superferry - The "Non-issue" of Campaign, etc.

Source: http://blogs.hawaiinewsnow.com/howard/2010/08/two-non-issues-of-the-gubernatorial-campaign.html

08/31/2010
"Two non-issues of the gubernatorial campaign"
by Howard Dicus (Superferry supporter)

It was a little weird to hear two perfectly intelligent men of substantial achievements who care deeply about Hawaii arguing over two complete non-issues in the debate Monday night.

Former Honolulu Mayor Mufi Hannemann and former Rep. Neil Abercrombie, in this and other debates, have discussed Hawaii Superferry and timeshare tourism. They might as well leave these topics on the table. I almost hate to bring this up because I enjoy amiable relations with both guys. And I hear their aides, spokeshumans and other impediments are increasingly temperamental as the campaign wears on. But I'm going to proceed anyhow. Vote against them if they can't take a joke.

Hawaii Superferry went broke, not merely because of the court challenges against it, but because its basic economic model was flawed. It would have required way more usage by the average resident than it could ever have reasonably counted on. I speak as a Superferry supporter who felt much of the opposition to it was invalid. I rode it once and really enjoyed it. I said at the time that the criticisms of it were more properly directed to other boats in the water that the same people have simply allowed to sail and proliferate. Yet it needed more revenue than it was ever going to get.

The ships are gone, sold off, and the company has died. Not only that, but both Hawaiian Airlines passenger service and Aloha Air Cargo service between the islands have improved a lot since Superferry "sank the island," as they said in the Master & Commander novels. Superferry's not coming back, so talking about it is kind of a waste of time at this point...

There you have it. But, we imagine there are some out there who still don't get it.

Also received the following comment today:

Doctor on a bike said...

My office looks right out on the Hawaii Superferries in Norfolk. They've been moved this morning (Sept. 1) and look to be ready to go somewhere.

To which we said...

BTW, if you go to here: http://www.marinetraffic.com/ais/
Set it to "Satellite," zoom in, and you can look down on the Alakai and Huakai and see they have been moved to a pier right next to the one they have been at.