Act 2: A Closed Class of One (Part 4)

Revisions on 12/31/08 Begin with the 4th Paragraph Down:

This Part 4 will look at the timing and logistical problems and incompatibilities with the possibility of whether there could be a second 'large capacity ferry vessel' company that could get approval to operate under Act 2. Part 5 of this series will look at how 'need' was and was not estabilished by the PUC, commented on formally by Mina Morita, and how Act 2 subtly altered that PUC conditioned 'need' to at one point what Act 2 calls 'critical' need, regardless of the fact that there was never a formal study undertaken to determine if in fact these designs would satisify any 'need' at all.

For Part 4 the ideal document to be able to review and reference would be the Operating Agreement between DOT and HSF dated 9/7/05 and any amendments to that. If I were a State Supreme Court Justice, I would want to get a complete and thorough look at that document as it may shed light on any exclusive points of agreement that may exist that could logistically limit use of harbor facilities by any other 'large capacity ferry vessel' company, or any other points that the State might not be able to repeat for another company. Unfortunately that document is not available to the wider public to view, so I cannot draw from it.

Nevertheless, one can make some interesting conclusions, not widely known, from the official documents that are available to the public on this, and so I will make use of those listed in Part 1 of this series.

First, we should review some of the timeframe involved with Act 2. Act 2 was passed by the Legislature on 10/31/2007 and was enacted by the Governor on 11/02/2007. Act 2 (except for Section 16) will be repealed no later than the 45th day, excluding Saturdays, Sundays, and holidays, following adjournment sine die (early May) of the regular session of 2009, which would be about July 6th, 2009. That can be expected to be a total of a few days more than 20 months.

Assuming another company had a qualified 'large capacity ferry vessel' available to operate here by the end of those 20 months, that other 'large capacity ferry vessel' company would in that time period need to:

1) Attain a Certificate of Public Convenience and Necessity from the PUC;
2) Negotiate an operating agreement with the DOT that would not be in conflict with the other ferry company's operating agreement;
3) Issue a PUC approved tariff and schedule that would not conflict with the other ferry company's schedule;
4) Rely upon the State and DOT Harbors Division to have the additional facilities/alterations in place at the necessary harbors ferry terminals/barges while not in conflict with the other ferry company's logistical demands;
5) Rely upon Legislative approval for any additional funding not approved nor authorized by Act 2 that would be necessary for ferry terminal/barge alterations to assist more than one 'large capacity ferry vessel' company;
6) Comply with DOT and Belt Collins requirements in preparing the Act 2 'EIS.' (Presumed to be 1 'EIS' for the two or more companies; although, this is not clarified in Act 2 and might require 2 or more Act 2 'EIS's done simultaneously.); and
7) Rely upon the OEQC accepting the Act 2 Final Draft 'EIS' by the early July 2009 deadline.

Regarding the above point 1) A CPCN from the PUC: How long might this take and should it be given before or after the EIS is accepted? As an example for the time that it might take, on July 22, 2004, HSF filed an application for a CPCN and through an expedited process received a 'conditioned' CPCN on Dec. 30, 2004, a minimum expected period of about 5 months. It is clear under Chapter 343 that the CPCN should not be issued until after the EIS is completely resolved. (See Letter from OTF Hawaii County Member Michael Matsukawa, from page 58 of the OTF November Report to the Legislature and Formal Complaint from Rep. Hermina Morita to the PUC.) But, under Act 2 presumably the 'EIS' would not need to be resolved before the CPCN is issued, although it is hard to understand why the PUC would issue the CPCN to a new company in light of recent events without knowing whether the Act 2 'EIS' would be accepted. Nevertheless, under Act 2 the question of when the CPCN would be needed for a second 'large capacity ferry vessel' company depends on when it's vessel/s would actually be here to operate or not.

Regarding the above point 2) Negotiate an operating agreement with the DOT that would not be in conflict with any other ferry company's operating agreement: How long might this take? As an example of the time that it might take, HSF appears to have begun negotiations in mid-2004 with DOT for use of harbor facilities. A Letter of Intent (LOI) from DOT was later agreed to on December 9, 2004, and the completed Harbors Operating Agreement was reached on September 7, 2005. That is a minimum of 10 months of negotiations with DOT, or 13 to 14 months from the beginning of the PUC/Consumer Advocate applications to the completed Harbors Operating Agreement with DOT. As to whether this could be done with a second or more 'large capacity ferry vessel' company and not be in conflict with the prior Harbors Operating Agreement of Sept. 7, 2005, would require reviewing completely the Harbors Operating Agreement of Sept. 7, 2005, something not available to the general public but which should be available to the Hawaii State Supreme Court Justices.

Regarding the above point 3) Issue a PUC approved tariff and schedule that would not conflict with the other ferry company's schedule: What is the example of the tariff and schedule from HSF and how long did it take to issue following PUC approval of a CPCN for HSF? HSF's initial tariff and schedule is here and was issued much later but prior to need on April 11, 2007, more than 27 months after PUC approval of it's CPCN. The significant point here is not the amount of time involved but instead it would be whether another company could propose a schedule that would be compatible with HSF's schedule using at different times much of the same relatively limited pier space.

Regarding the above point 4) Additional facilities/alterations in place at the necessary harbors ferry terminals/barges while not in conflict with the other ferry company's logistical demands: Refers to each harbor's limited ferry pier space and barge/ramp measurements in place. For ferry pier space at Honolulu Pier 19 & 20, Kahului Harbor Pier 2, Nawiliwili Pier 1, and Kawaihae Pier 1 et.al., the key question is whether the State DOT may have already exclusively agreed to lease to HSF those gated facilities completely, all of the time? This would be determined by the Harbors Operating Agreement of Sept. 7, 2005. Click here to see properly scaled graphical representations of each pier mentioned above, pp. 25-33.

Another key problem would be HSF's approved plan to base both Hull 615 and Hull 616 at Pier 19 & 20 in Honolulu along with the barge there and begin both of those vessels' daily routes from that point. The space at the State's Ferry Piers 19 & 20 would not allow more than 2 'large capacity ferry vessels' with the barge to be there overnight as a base. A solution might be that HSF base Hull 616 at Kawaihae Harbor overnight which could actually be the basis of a much more efficient routing system than HSF currently has planned. These would likely be changes from HSF's existing Operating Agreement that HSF might not agree to.

For barge/ramp measurements there are no other American made Austal 'large capacity ferry vessels' (beyond Hulls 615 & 616) available for this purpose, and the exact measurements for the barge/ramps would likely vary for any other 'large capacity ferry vessel' type. In fact, recently DOT stated that they were waiting on the exact measurements for Hull 616 before they could finalize the design of any barge/ramp for use at Kawaihae Harbor. If a different maker were likely used for another 'large capacity ferry vessel', at a minimum some sort of adjustable alterations might need to be made to the barge ramps in order to marry to the slightly different exit/entrance heights of the vessels (as between Austal vs. Incat). Adjustable alterations to the barge/ramps would need to be able to be done within the 20 month life of Act 2 and not interrupt the service of HSF. This kind of adjustable alteration to the existing barge/ramps might or might not be possible. The alternative is that these space-consuming barge/ramps may very well not be useful for any other 'large capacity ferry vessels' than HSF's.

For an enlightening look at internal DOT communications on the development of harbor facilities for HSF click here.

Regarding the above point 5) Legislative approval for any additional funding not approved nor authorized by Act 2 that would be necessary for ferry terminal/barge alterations to assist more than one 'large capacity ferry vessel' company: From the Final OTF Report of Dec. 29, 2008, "At the Nov. 6, 2008 OTF meeting, DOT-Harbors informed the OTF [and media] that the State had reached the limit of the State funding authority...[as approved by the Legislature]. As such, the State did not intend to fund further ferry specific harbor improvements in excess of the $40 million appropriated by the Legislature." For further explanation of how all of the $40 million+ has been spent, see the State Auditor's Report Part II pp. 18, 22, and 30. Therefore, there is no more funding reauthorized by Act 2 available for any additional harbor alterations to facilitate the use of harbor facilities by any more than the one intended 'large capacity ferry vessel' company.

Regarding the above point 6) DOT/Belt Collins preparation of the Act 2 'EIS': DOT/Belt Collins had stated the following schedule in their Scoping Meetings with the public...




...But those dates were recently pushed back to the Act 2 Draft 'EIS' being released sometime in January 2009 and the 45 day comment period beginning then. Under this new schedule DOT/Belt Collins are giving themselves less time for Final Draft preparation and even less leeway should OEQC require additional re-submission as potentially envisioned in Act 2 Part III Section 12.

Regarding the above point 7) OEQC accepting the Act 2 Final Draft 'EIS' by the early July 2009 deadline: Act 2 (except for Section 16) will be repealed no later than the 45th day, excluding Saturdays, Sundays, and holidays, following adjournment sine die (early May) of the regular session of 2009, which would be about July 6th, 2009. That can be expected to be a total of a few days more than 20 months.

It is interesting to note that the DOT controlled OTF Committee just recommended to the Legislature in its Final Report (pp. 3 & 25), "Repeal the repeal date set forth in Act 2, Part 4, Section 18 (p. 25)." This would have the effect of creating a moving target for any other potential 'large capacity ferry vessel' companies and it may also be proposed to create a permanent exception to Chapter 343 for 'large capacity ferry vessels' not originally a part of Act 2 nor likely envisioned by Legislators previously voting for Act 2. Furthermore, this last proposal by the DOT/OTF could potentially be used to circumvent too narrow a State Supreme Court ruling on Act 2.


Am publishing this now, will make additions later,
Aloha, Brad

Act 2: A Closed Class of One (Part 3)

In Act 2 there are at least 5 places, 3 Sections in the Act, where prior agreements or approvals that had been invalidated by the courts are explicitly stated to be reauthorized by Act 2. The key Sections for these reauthorizations are Section 1(d), Section 3, and Section 15. The reauthorizations are for:

1) The certificate of public convenience and necessity;
2) Any agreements between the department of transportation or the state and a large capacity ferry vessel company previously entered into;
3) Any state lands previously authorized to be used;
4) Any state harbor improvement or state or county facilities previously made or made available; and
5) Any tariffs issued by the company for the purpose of facilitating this provision of service.

Section 1(d) basically states that neither prior acceptance nor condition precedence of an environmental impact statement is required for the above listed reauthorizations. Section 3 basically says the same regardless of Chapters 205A, 269, 271G, and 343, Hawaii Revised Statutes.

Section 15, though, is the interesting one. Section 15 basically says that any previously made appropriation or previously authorized expenditure of funds for a large capacity ferry vessel company or for harbor improvements or operating expenses to accommodate the company are expressly re-approved and re-authorized under Act 2. But, Section 15 nor anywhere else in Act 2 neither approves nor authorizes additional future appropriation or expenditure of funds needed to accommodate any additional large capacity ferry vessel company. Section 15 is as follows:

PART IV SECTION 15. Any previously made appropriation or previously authorized expenditure of funds for any inter-island ferry operations of a large capacity ferry vessel company, or for improvements or operating expenses to accommodate its provision of inter-island ferry service, shall be approved and authorized to the extent they are needed to effectuate the provisions of this Act.
Any state lands previously authorized to be used to facilitate or support the operation of a large capacity ferry vessel, shall be authorized to be used to effectuate the provisions of this Act.
Any state harbor improvement or state or county facilities previously made or made available to facilitate or support the operation of a large capacity ferry vessel may be used by any large capacity ferry vessel company or any other person to effectuate the provisions of this Act.
Any certificate of public convenience and necessity previously issued to a large capacity ferry vessel company may be used to effectuate the provisions of this Act.
Any tariffs issued for the purpose of facilitating the provision of service by a large capacity ferry vessel may be used to effectuate the provisions of this Act.
Any agreements between the department of transportation or the state and a large capacity ferry vessel company previously entered into for the purpose of facilitating the provision of service by a large capacity ferry vessel may be used to effectuate the provisions of this Act.

Of all of the provisions in Act 2 that deal with the re-authorizing issues previously invalidated by the courts, Section 15 is clearly the one that does so inconsistently with regard to the prior large capacity ferry vessel company relative to any additional large capacity ferry vessel company seeking to come in under Act 2 and requiring some appropriation or expenditure of state funds for operations of the latter large capacity ferry vessel company, or for additional improvements or operating expenses to accommodate its provision of inter-island ferry service.

Beyond this implicit unconstitutional special privilege drafting of Section 15, the timetable of how a second or more large capacity ferry vessel companies could not meet the requirements listed in Act 2 Part III and in Sections 1, 3, and 15, within the maximum of 20 months of the life of Act 2 will be the subject of my next post, Act 2: A Closed Class of One (Part 4).


Aloha, Brad

Act 2: A Closed Class of One (Part 2)

Among the most significant points within Act 2 that create a "closed class of one" special law, the first point I will mention is not the most egregious, but it is one of the points that I find most interesting, so I will start with the definition of a "large capacity ferry vessel":

PART II SECTION 2. As used in this Act, unless the context otherwise requires:
"Large capacity ferry vessel" means any inter-island ferry vessel that transports, is designed to transport, or is intended to transport per voyage at least five hundred passengers, two hundred motor vehicles, and cargo between the islands of the state...

From the U.S. DOT RITA BTS most recent annual database update there were 691 ferry vessels operating in the U.S. Of those 691 ferries in the U.S., 102 can transport at least 500 people at a time. Of those 102 ferries, only 5 operating in the U.S. can also transport at least 200 vehicles.

There are 2 more ferries in Washington state that fall just under the 200 vehicles number, and there are 3 ferries in Alaska that fall just 1 person short of the 500 passengers required capacity. There are also some very interesting 600 passengers only (no vehicles) fast ferries operating in Santa Catalina, Martha's Vineyard, Boston, and in the U.S. Virgin Islands. But, only 5 ferries are operating in the U.S. that meet the new and arbitrary requirements for a 'large capacity ferry vessel' class of 500 passengers and 200 vehicles that Attorney General Bennett created in drafting Act 2. [See quote and points below at bottom about the logical size of vessel recommended to HSF for these conditions by Austal's former CEO which fall short of Bennett's Act 2 requirements for a 'large capacity ferry vessel.']

Of those 5 currently operating 'large capacity ferry vessels' in the U.S., 3 are gainfully deployed by the Washington State DOT, 1 is an Incat fast ferry built outside of the U.S. and so operating and gainfully deployed between Maine and Nova Scotia, and the Alakai and her sister ship are the only other vessels in the U.S. that meet the 'large capacity ferry vessel' class description. Other than the Alakai and her sister ship, none of those vessels would be available to be deployed to Hawaii. Of the 5 ships built in the U.S. (required under the Jones Act) to operate in the U.S. that meet the 'large capacity ferry vessel' class description, all of them took about 2 years to build, the expected time it would take to build a new ship to meet the 'large capacity ferry vessel' requirements.

But, Act 2 was passed Oct. 31, 2007, and by it's content sunsets in late June 2009:

PART IV SECTION 18. This Act shall take effect upon its approval; provided that this Act shall be repealed on the earlier of:
(1) The forty-fifth day, excluding Saturdays, Sundays, and holidays, following adjournment sine die of the regular session of 2009; or
(2) Upon acceptance of the final environmental impact statement as provided in this Act...

From the time that Act 2 was passed on Oct. 31, 2007, to when it sunsets (June 2009) 45 days after the Legislative session ends sine die in early May 2009, will have been a maximum of 20 months, not enough time to build a new 'large capacity ferry vessel' in the United States that would meet the Act 2 and Jones Act requirements.

There are no other available vessels other than HSF Hulls 615 and 616 that could meet the new and arbitrary vessel class requirements and timing in Act 2 drafted by Attorney General Bennett.

The following are the only ferry vessels operating in the U.S. that fall under the new and arbitrary Act 2 class description of a "large capacity ferry vessel":

VESSEL------MSPEED-----OPSPEED-----PASSENGERCAP-----VEHICLECAP---YEARSBUILT---OWNER
Wenatchee-----21------------18----------------2500-------------------218---------1996-1998---WASH ST DOT
Puyallup--------21------------18----------------2500-------------------218---------1997-1999---WASH ST DOT
Tacoma---------21------------18----------------2500-------------------218---------1995-1997---WASH ST DOT
The Cat---------40------------36----------------900--------------------240----------2000-2002---BAY FERRIES
Alakai A-615---40------------35----------------836---------------------230---------2004-2007---HSF
A-616----------40+-----------35+--------------866---------------------282---------2007-2009---HSF

It is an interesting question of how and why Attorney General Bennett came up with the 500 people and 200 vehicles limitations for Act 2 benefits. Of the two, the 200 vehicles is the more significant number that dramatically limits this.

Among Austal vessel designs, the 200 vehicles requires their larger vessel sizes of 86 meters or larger (their 72 meter and smaller designs handle much less than 200 vehicles). Among Incat vessel designs, the 200 vehicles also requires their vessel sizes of 86 meters or larger (their 81 meter and smaller designs handle less than 200 vehicles). These 86 meter and larger fast ferries are less fuel efficient on longer routes of 3 hours or more. An interesting quote on this from Pacific Business News:

"Whether Hawaii Superferry will be profitable is something that concerns Alan Lerchbacker, the former CEO of Austal USA, which built the ferry. 'I just worry about getting enough business to cover costs because of the sheer size of it,' said Lerchbacker, who came to Hawaii to sell the ferry but works in another industry now. Lerchbacker said he suggested a 72-meter vessel only to see the company order the 100-meter model. 'For a smooth ride on the ocean, that ferry will have to go over 35 knots, and it costs a lot of money on fuel to go that fast,' he said. 'They may need 400 to 500 passengers to break even.'"

From the OTF Reports it is clear that since beginning operations, HSF has averaged well under 200 vehicles per load (often times close to and under 100 vehicles) and averaged well under 400 passengers per load (often times between 200 and 300 passengers).

There are no other available vessels other than HSF Hulls 615 and 616 that could meet the new and arbitrary vessel class requirements and timing in Act 2, but even they struggle to do so profitably because of the mismatch in scale, design, propulsion, and arbitrarily drafted legislative requirements of Act 2 that do not properly match the economic conditions and environmental distances of this location.


Act 2: A Closed Class of One (Part 3) to follow soon,
Aloha, Brad

Act 2: A Closed Class of One (Part 1)

This report will rely upon the content of Act 2 and the applicable citations from Act 2 as listed in The Act 2 Citations Creating a 'Closed Class of One'.

Due to references in Act 2, I have also undertaken to look at the PUC's Dec. 2004 CPCN, Hermina Morita's formal complaint to the PUC on that CPCN, HSF's Tariff, all of the OTF Committee reports, the RRA report and RRA Appendix with EO 07-10, and the State Auditor's Report I and II. I did not have access to the protected Operating Agreement of 9/7/05 between the State and HSF which I believe would provide uniquely useful information on the special privilege awarded here. Additionally, to put 'large capacity ferry vessel' in context of the whole ferry industry, I reference a few related documents, and I accessed a database of ferry vessels operating in the U.S. maintained by the U.S. DOT RITA BTS, and developed reports from that.

This report is not a legal document, but it is intended to provide insight where legal scholars may lack the time to research and/or ferry industry knowledge to place the relatively newly coined phrase/class 'large capacity ferry vessel' into proper context. In evaluating Act 2 for a 'closed class of one,' I will be looking at the type of vessel within the industry as limited by Act 2, timing limitations involved in Act 2, the special advantage of previous agreements between DOT and HSF that Act 2 re-legalized, and determining need for 'public convenience and necessity.'

Part 2 of this report to follow,
Aloha, Brad

The Rapid Risk Assessment Did Not Adequately Respond to the Requirements of Act 2 Section 4

Although the more important point right now would be going over the list of citations (that is completed) from Act 2 that creates a "closed class of one," I feel I first have to point out a significant and telling mistake that has been made regarding the reporting requirements under Act 2 Section 4.

Following reading and re-reading Act 2 line-by-line, the Governor's enabling EO 07-10, and the PUC's decision on this of Dec. 30, 2004, I decided to review the last few OTF reports.

In the OTF meeting of October 9, 2008, showing up in the OTF Document Report of October 31, 2008, on pages 7-10, OTF Kauai Member Lynn McCrory brings up a number of questions based on the code of Act 2 and the Governor's EO. In posing one question to the Committee, Member McCrory read from Act 2 Section 4(c),

"The governor shall also review and determine the efficacy and appropriateness of all conditions or protocols established pursuant to this section and report to the legislature at the end of each fiscal quarter of the State on the efficacy and appropriateness of all conditions or protocols established pursuant to this section and the costs incurred by the State in establishing and maintaining the enforcement activities required under this section."

Quoting further from the OTF Report, "Member McCrory asked if the Governor prepares a quarterly report on the efficacy and appropriateness of the conditions and protocols, as well as costs incurred. Member Formby said he would check but he believed the [Rapid Risk Assessment] RRA and [OTF] legislative reports meet that specific requirement. Member Formby also noted that...DOT continues to compile additional cost data." The cumulative cost data that Member Formby referred to was presented a month later in the next OTF Report of November on page 45 of that document.

Ms. McCrory continued a line of questioning regarding the efficacy of the conditions and protocols in protecting natural resources which over the summer had become an issue on the outer islands.

To clarify, the OTF Reports are a seperate requirement under Act 2, Section 13. The OTF Reports DO NOT fulfill the requirements of Act 2, Section 4. Furthermore, regarding the 'Rapid Risk Assessment' as it was fashioned, it DID NOT fulfill all of the requirements of Act 2, Section 4 either.

Act 2 Section 4(c) calls on the Governor to, "review and determine the efficacy and appropriateness of all conditions or protocols [EO] established pursuant to this section and report to the legislature at the end of each fiscal quarter of the State on the efficacy and appropriateness of all conditions or protocols established pursuant to this section and the costs incurred."

Act 2 Section 4 is referring to the efficacy and appropriateness of the Governor's EO conditions and protocols, NOT merely whether the company and it's passengers were in compliance with the EO's limited conditions as they exist. Furthermore, the RRA was based only on limited observations in the first half of the year when ridership was not high and conditions were different from the next quarter, and the RRA was submitted as one document not as quarterly reports to the Legislature. Furthermore, the RRA did not include information on costs incurred to the state. But, most importantly, the RRA content dealt mostly with determining compliance with the Governor's EO, and not in evaluating the efficacy and appropriateness of the conditions and protocols themselves. Lastly, the point of Act 2 Section 4 was to enable the Governor to amend the EO and improve it throughout the year. There have been no official amendments by the Governor to EO 07-10.

How Belt Collins lost the intent of Act 2 Section 4(c) can be seen partly in the following quote from the RRA Appendix p.15:

"The purpose of the Rapid Risk Assessment (RRA) is to provide early and independent assessment of: 1) observed environmental risks associated with the Hawaii Superferry operation, if any, and 2) operational compliance with mitigation measures enumerated in section 4(a) of Act 2, Executive Order (EO) 07-10 and the Agreement between Hawaii Superferry, Inc. and the State of Hawaii..."

"The RRA shall commence on contract award. The RRA shall be completed within three (3) months of commencement of field investigations. At the end of the three (3) month period, a written report shall be delivered by the RRA contractor to the Governor, Director of DOT, Chairperson of DLNR, and Chairperson of DOA."

The quarterly reports were suppose to be from the Governor (or her designee) to the Legislature in addition to the monthly and annual reports from the OTF to the Legislature.

How badly Belt Collins missed the intent of Act 2 Section 4, especially by mostly focusing in the RRA on evaluating compliance with the EO rather than recommendations on improved EO conditions and protocols, has to make one wonder if their staff and consultants working on this have all actually read and understand all of Act 2 much less whether they have the capability and initiative of carrying it out fully and properly under the new 'EIS' by creating real solutions as with original and thorough mitigation measures.

Mahalo to Lynn McCrory for caring enough about natural resources to ask the right questions, even if she was not given the right answers,
Aloha, Brad

Who owns HSF's Bonds?...the Majority of it's Financing

It had been ABN Amro, but it appears it may now be the Dutch Government:

From: http://www.abnamro.com/en/home.cfm

"ABN AMRO was acquired by the consortium of Fortis, RBS and Santander in October 2007. On 3 October 2008, the Dutch state announced that it has bought Fortis Netherlands, including its interests in ABN AMRO. The Dutch state de facto replaces Fortis as a stakeholder in RFS Holdings, which continues to manage ABN AMRO. RBS-bound businesses are not affected by this change.

ABN AMRO is now owned by RBS, Santander and the Dutch government. Its various businesses around the globe are currently being separated from ABN AMRO and integrated in line with each owner's plans."

From: http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_315767.html

Dec 18, 2008
"Sale of ABN Amro assets halted"

THE HAGUE (AFP) - "THE sale of some assets of Dutch bank ABN Amro by its new part-owner, government-owned Fortis Netherlands to Germany's Deutsche Bank, has been cancelled, Dutch news agency ANP reported on Wednesday.

It quoted a letter circulated among staff of the entities identified for sale, and said the information had been confirmed by ABN Amro.

The deal was approved by the European Commission competition watchdog in October.
Fortis, then a Belgian-Dutch banking and insurance company, said in July it would sell some of ABN Amro's commercial banking activities in the Netherlands to Germany's Deutsche Bank for 709 million euros (S$1.46 billion).

Deutsche Bank was to acquire two corporate client units, 13 commercial advisory branches, parts of the Hollandsche Bank Unie NV, and the services company IFN Finance BV.

Fortis was obliged to sell the assets to get regulatory approval for the takeover of ABN Amro last year as part of a consortium with Britain's RBS and Santander of Spain for a total sum of 71 billion euros.

The sale has since become a bane for Fortis as questions about the financing of the operation contributed to a liquidity crisis two months ago.

Fortis was subsequently dismantled and its Dutch assets, including ABN Amro, nationalised by the Dutch government for 16.8 billion euros."


Aloha, Brad

Where are the Act 2 Section 4 Quarterly Reports?

I am about half way through Act 2 listing the conditions that create a "closed class of one," but in the process I came across the following. Where are these quarterly reports?

"PART II SECTION 4. (c) The governor shall also review and determine the efficacy and appropriateness of all conditions or protocols established pursuant to this section and report to the legislature at the end of each fiscal quarter of the State on the efficacy and appropriateness of all conditions or protocols established pursuant to this section and the costs incurred by the State in establishing and maintaining the enforcement activities required under this section."

There's more where this came from,
Aloha, Brad

Great Star-Bulletin Editorial Today on Act 2

From: http://www.starbulletin.com/editorials/20081220_our_opinion_state_leaders_bungling_led_to_superferry_mess.html

OUR OPINION:
"State leaders' bungling led to Superferry mess"
Honolulu Star-Bulletin Dec 20, 2008

"IF a single situation could be held up as a model to discourage enterprise and investment in the state, it is that of the Hawaii Superferry. The Lingle administration and an equally culpable state Legislature did no one -- not taxpayers, the visitor industry, businesses or public or environmental interests -- any favors in their bungling of the ferry issue.

Had officials simply adhered to legal requirements from the get-go, the harm imposed and that could yet be brought to the ferry company and others, and the community divisiveness their mistakes have generated would not have occurred.

A report by the state auditor criticizing special legislation tailored to benefit the ferry company served as a prelude this week to arguments before the Supreme Court on constitutional challenges of the law.

The audit concluded that the legislation -- known as Act 2, passed after the court ruled that the state should not have exempted the ferry from environmental reviews -- "compromised" the law and "set a precedent for future government intervention that puts the interests of a single business before the state's environmental, fiduciary and public safety responsibilities."

In addition, the audit asserted that Act 2 puts restraints on other laws by allowing the ferry to operate concurrent with preparing an environmental review.

The report criticized the state for ignoring recommendations of the Department of Transportation's technical staff and allowing the ferry company to dictate harbor improvements.

The improvements, mainly comprised of loading ramps and barges, cost the state $40 million and have proven inadequate in winter weather at Kahului harbor. The audit found that five times over a period of five months, storm surges and high winds damaged lines, bollards, fenders and barges. For safety, tugboats are necessary to keep the barges in place at additional cost, which resulted in a dispute between the state and the company about who was responsible for the bill.

The audit's finding about the legal vulnerabilities of Act 2 was echoed in the court hearing on a suit that argues the state Constitution forbids the Legislature from conferring special exemptions and benefits on individual entities that don't apply to others.

The state's claim is that the law wasn't designed only for the Superferry since it refers generically to any "large-capacity ferry vessels." However, as the suit's plaintiffs and the audit both note, the law's effective window of 15 to 16 months was too narrow to allow any other ferry business to take advantage of it.

Should the court disagree with the state's contention, the ferry's operations could again be suspended..."

Also, a good recap on the proceeding in the Supreme Court is at the following:
Supreme Court to decide constitutionality of lawmakers’ Superferry actions
by Travis Quezon December 19th, 2008

Am about half-way through Act 2 listing the conditions that create a "closed class of one,"
Aloha, Brad

The Act 2 Citations Creating a 'Closed Class of One'

These are ALL of the citations within Act 2 that lend themselves toward creating the "closed class of one" requirement for special legislation. That state lands were used to award special benefits and that public necessity was never established as studied fact in this case complete the legal argument that this was special law and not general law. There are a few additional glaring citations not directly related to "closed class of one" that I have included. I am putting the citations up in order now, and will analyze them, particularly as to timing in a later post, soon.

PART I SECTION 1. (a) ...The legislature also finds that it is clearly in the public interest that a large capacity ferry vessel service should commence as soon as possible...

PART I SECTION 1. ...The legislature also finds that it would be desirable and appropriate for the department of transportation to prepare or contract to prepare an environmental impact statement regarding commercial harbor improvements undertaken to accommodate a large capacity ferry vessel company and its operations...

PART I SECTION 1. ...The legislature further finds that it would be appropriate for:
(1) An oversight task force to study the State's actions regarding the establishment of the operations of any large capacity ferry vessel company as a whole, and the impact of any existing or proposed large capacity ferry vessel operations...

PART I SECTION 1. (b) ...during the period in which any required environmental review and studies, including environmental assessments or environmental impact statements, are prepared, and also following their completion:
(1) A large capacity ferry vessel company and large capacity ferry vessels may operate...

PART I SECTION 1. (b) ...
(2) Agreements with respect to the operations of a large capacity ferry vessel company, including a large capacity ferry vessel company operating agreement, entered into between the State and a large capacity ferry vessel company, may be enforced as written or as executed or re-executed...

PART I SECTION 1. (c)
(1) Due to the unique nature and critical importance of the inter-island ferry service industry to the people of our state, the construction and use of harbor improvements to facilitate this new type of inter-island ferry service is to be governed by this Act, and not by chapter 343, Hawaii Revised Statutes...

PART I SECTION 1. (d) The purpose of this Act is to facilitate the establishment of inter-island ferry service and, at the same time, protect Hawaii's fragile environment by clarifying that neither the preparation of an environmental assessment, nor a finding of no significant impact, nor acceptance of an environmental impact statement shall be a condition precedent to, or otherwise be required prior to:
(1) The operation of a large capacity ferry vessel company pursuant to any certificate of public convenience and necessity approved by the public utilities commission;
(2) The operation of a large capacity ferry vessel company and large capacity ferry vessel between any port or harbor in Hawaii pursuant to any written operating agreement;
(3) The construction, use, or operation of any improvements at Kahului harbor and any other harbor in the state relating to the operation of a large capacity ferry vessel company or large capacity ferry vessel;
(4) The appropriation or expenditure of any funds, the use of state lands, the issuance of any permits, or the entering into of any agreements; or
(5) The taking of any other necessary or appropriate actions for the purpose of facilitating any matter covered by paragraphs (1) to (4)...

PART I SECTION 1. (e) The purpose of this Act is also to amend all relevant existing laws to provide that, while any environmental review and studies, including environmental assessments or environmental impact statements, are prepared and following their completion:
(1) A large capacity ferry vessel company and large capacity ferry vessels may operate;
(2) Agreements with respect to such operation, including the operating agreements, entered into between the State and a large capacity ferry vessel company may be enforced, executed, or re-executed...

PART II SECTION 2. As used in this Act, unless the context otherwise requires:
"Large capacity ferry vessel" means any inter-island ferry vessel that transports, is designed to transport, or is intended to transport per voyage at least five hundred passengers, two hundred motor vehicles, and cargo between the islands of the state...

PART II SECTION 3. Notwithstanding chapters 205A, 269, 271G, and 343, Hawaii Revised Statutes..., and further notwithstanding that environmental assessments and environmental impact statements have not been prepared or completed, or have been completed and an environmental impact statement is not accepted, is found unacceptable, or a finding of no significant impact has not been made:
(1) A large capacity ferry vessel company shall have the right to operate and the right to utilize Kahului harbor improvements and other improvements and facilities on any island, pursuant to and subject to any and all agreements and contracts with state entities...
(2) All state harbor improvements, projects, and facilities available for or to be utilized by the large capacity ferry vessel company may be completed and utilized for any purpose agreed to and authorized by appropriate state entities;
(3) A large capacity ferry vessel company and the appropriate state entities may proceed pursuant to and subject to all executed tariffs, agreements, and contracts between the company and the state entities, whether the tariffs, agreements, and contracts may have previously been found to be in violation of chapter 343, Hawaii Revised Statutes, or any other law and may re-execute the same, including an operating agreement, in the same general form as previously executed;
(4) The operation of large capacity ferry vessels...is declared to be a required public convenience and necessity;
(5) A certificate of public convenience and necessity issued to a large capacity ferry vessel company shall not be revoked or modified on the basis that environmental assessments or environmental impact statements have not been prepared or completed; and
(6) The construction, use, or operation of any facilities or improvements authorized by any agreement between a large capacity ferry vessel company and a state department, board, commission, or agency shall not be subject to or require any county permits or approvals,
notwithstanding the fact that the non-preparation or non-completion of environmental assessments or environmental impact statements, the lack of acceptance of an environmental impact statement, or the lack of a finding of no significant impact, would otherwise have barred, delayed, been a condition precedent to, or interfered with the same.

PART II SECTION 4. (a) As a condition precedent to the rights conferred by section 3 of this Act, any large capacity ferry vessel company seeking to operate pursuant to this Act shall comply with the following conditions:
...(3) Any other conditions or protocols the governor deems necessary and appropriate...without regard to chapter 91, Hawaii Revised Statutes, or any other provision of law.

PART II SECTION 4. (b) Any large capacity ferry vessel company authorized to operate pursuant to this Act shall execute an agreement with the State, in a form acceptable to the attorney general, by which the large capacity ferry vessel company shall expressly agree to abide by any conditions or protocols established pursuant to this section.

PART II SECTION 4. (c) The governor, by means of an executive order, and without regard to chapter 91, Hawaii Revised Statutes, or any other provision of law, may amend the conditions and protocols established under this section...In addition, the governor, by means of an executive order, and without regard to chapter 91, Hawaii Revised Statutes, or any other provision of law, shall also impose additional conditions and protocols on a large capacity ferry vessel company's inter-island operations to mitigate significant environmental effects that the governor determines, in the governor's judgment, are likely to be caused by such inter-island operations.

PART II SECTION 4. (c) The governor shall also review and determine the efficacy and appropriateness of all conditions or protocols established pursuant to this section and report to the legislature at the end of each fiscal quarter of the State on the efficacy and appropriateness of all conditions or protocols established pursuant to this section and the costs incurred by the State in establishing and maintaining the enforcement activities required under this section.

PART II SECTION 4. (d) The legislature reserves the sole right to:
(1) Review the adequacy of any conditions or protocols imposed or amended by the governor under this Act; and
(2) Impose, by law, any other conditions or protocols it deems necessary and appropriate to further protect the state's environment or communities...

[What about resource depletion and transport on the vessel of reef fish, limu, maile, and mokihana? Not mentioned in the Governor's conditions or protocols.]

PART III SECTION 6. Nothing in this part shall be deemed or construed to impose a condition precedent to any activity authorized under parts I, II, or IV of this Act.

PART III SECTION 8. The department of transportation shall prepare or contract to prepare an environmental impact statement for the improvements made or to be made to commercial harbors throughout the state that require the expenditure of public funds to accommodate the use thereof by a large capacity ferry vessel company and the secondary effects of those operations on the state's environment, including the operation of the large capacity ferry vessel company.

PART III SECTION 10.(a) (4) A project description which shall include the following information...:
...(D) Use of public funds or lands for the action...

PART III SECTION 10.(a) (11) All probable adverse environmental effects which cannot be avoided. Any adverse effects such as water or air pollution, urban congestion, threats to public health, or other consequences adverse to environmental goals and guidelines established by environmental response laws, coastal zone management laws, pollution control and abatement laws, and environmental policy...

PART III SECTION 11.(g) The draft and final statements shall be prepared by the department and submitted to the office. The draft statement shall be made available for public review and comment through the office for a period of forty-five days...The department shall respond in writing to comments received during the review and prepare a final statement.

PART III SECTION 12.(f) A non-accepted statement shall be revised by the department to address the concerns of the office. The revision shall take the form of a revised draft environmental impact statement document which shall fully address the inadequacies of the non-accepted statement and shall completely and thoroughly discuss the changes made. The requirements for filing, distribution, publication of availability for review, acceptance or non-acceptance, and notification and publication of acceptability shall be the same as the requirements prescribed by this part for an environmental impact statement submitted for acceptance. In addition, the revised draft statement shall be evaluated for acceptability on the basis of whether it satisfactorily addresses the findings and reasons for non-acceptance.

PART IV SECTION 13. (a) There is established under the department of transportation, a temporary Hawaii inter-island ferry oversight task force. The department of transportation shall be responsible for administering the work of the temporary Hawaii inter-island ferry oversight task force, providing a facilitator, and submitting reports to the legislature and governor. The goal of the temporary Hawaii inter-island ferry oversight task force shall be to study the State's actions regarding the establishment of the operations of any large capacity ferry vessel company as a whole and to examine the impact, if any, of the operations of any existing or proposed large capacity ferry vessel company...

PART IV SECTION 15. Any previously made appropriation or previously authorized expenditure of funds for any inter-island ferry operations of a large capacity ferry vessel company, or for improvements or operating expenses to accommodate its provision of inter-island ferry service, shall be approved and authorized to the extent they are needed to effectuate the provisions of this Act.
Any state lands previously authorized to be used to facilitate or support the operation of a large capacity ferry vessel, shall be authorized to be used to effectuate the provisions of this Act.
Any state harbor improvement or state or county facilities previously made or made available to facilitate or support the operation of a large capacity ferry vessel may be used by any large capacity ferry vessel company or any other person to effectuate the provisions of this Act.
Any certificate of public convenience and necessity previously issued to a large capacity ferry vessel company may be used to effectuate the provisions of this Act.
Any tariffs issued for the purpose of facilitating the provision of service by a large capacity ferry vessel may be used to effectuate the provisions of this Act.
Any agreements between the department of transportation or the state and a large capacity ferry vessel company previously entered into for the purpose of facilitating the provision of service by a large capacity ferry vessel may be used to effectuate the provisions of this Act.

PART IV SECTION 18. This Act shall take effect upon its approval; provided that this Act shall be repealed on the earlier of:
(1) The forty-fifth day, excluding Saturdays, Sundays, and holidays, following adjournment sine die of the regular session of 2009; or
(2) Upon acceptance of the final environmental impact statement as provided in this Act;
and
Provided further that:
(1) The final environmental impact statement by the department of transportation that is accepted by the office of environmental quality control under this Act shall be and remain effective for all purposes under the laws of this state, notwithstanding the repeal of this Act; and
(2) Section 16 of this Act shall not be repealed when this Act is repealed.

Next will analyze the above cites with the official documents referenced herein, with available large capacity ferry vessel industry information, and with the logistics of the calendar as to how this can be nothing other than a "closed class of one."

Aloha, Brad

'Public Need' was Never Established as Fact

The State Supreme Court did not issue a quick decision on the status of Act 2. I imagine they need to carefully word whatever they issue on this. Politically, it would be much easier to uphold Act 2 than to take the time to form a solid legal decision to rightly strike it down.

You can watch for the decision at the Court Website. They don't usually issue opinions on Saturday or Sunday, so I imagine we won't hear anything new until no earlier than Monday, maybe even later. Many of their decisions appear to take a week or two to be issued. I'm going to try to take Saturday and Sunday to come up with a detailed post on "Act 2: Content Creating a Closed Class of One."

For now though, Derrick DePledge had another fairly good article today, "Intent of EIS relief for ferry debated; Supreme Court hears arguments on whether law applies only to firm." My comments to two points in that:

Re: "If the court rules in favor of the environmentalists, Superferry could possibly have to halt service while the state prepares a new environmental assessment under the state's environmental review law, which could take another year."

NO. The state would NOT prepare the new environmental assessment nor EIS under Chapter 343, that is the responsibility of the company, just as it has been with other entities covered under Chapter 343. There are no freeby EA/EIS handouts under Chapter 343 as opposed to Act 2.

Re: "Ginoza countered that...the public interest with the new law. (The new law) 'specifically balances the public need for an innovative and alternative mode of transportation...'"

Neither the Governor nor the Legislature nor the PUC undertook any studies to establish as fact that HSF and it's particular design would actually satisfy a public need or benefit (hastily written Resolutions in 2004 did not establish a fact of need). If HSF does not return, another company with a better, smaller design for these conditions could come in under Chap. 343.


Aloha, Brad

Justices: Please tell us how it is a "closed class of one"

Just reviewed the live blog transcript by Atty. Robert Thomas. Mahalos to Robert Thomas for the following:

"Audio Recording of Hawaii Superferry Supreme Court Oral Arguments (mp3)"
"The Court has released the audio recording of this morning's oral arguments in the Hawaii Superferry (part II) case. Download the mp3 here (caution, it is a 40mb file). The archive of this morning's live blog of the arguments is posted here. The briefs in the case are posted here."

Was surprised that there was very little discussion/questions on the fact that Act 2 has no "No Action" alternative on the whole project, a reduction in public rights from Chapter 343 to Act 2.

Instead there were a slew of questions from the Justices on whether Act 2 is special legislation for a "closed class of one." From the actual audio file, rather than the live blog reporting, it is clear that Hall did specify points in Act 2 that create the "closed class of one." By the below transcript, it appears that the State was not well prepared for that line of questioning from the Justices.

If I have time, I'm going to go through Act 2, word for word, and list all of the conditions, explicit and implied, that narrow this to a "closed class of one."

On an implied point, others noted in the live blog that the state had already built the barges and ramps that were made specifically for HSF's exact measurements.

Another implied point is that to operate here in Hawaii, the large capacity ferry vessel would have to be built in the United States. There are no other companies with large capacity fast ferry vessels that would have met that requirement before the sunset of Act 2. I'll have to see if there are any other slow large capacity ferry vessels that could have met the domestically constructed requirement, but I think not. These are some of the key implied constraints that create a "closed class of one." I'll go over Act 2 soon for the explicit constraints toward the same.

Karen Chun has taken the time to cite the events of the past 12 hours. It is all interesting stuff. Hope she won't mind me reposting it here, so I can spend time on the "closed class of one."

From: http://savekahuluiharbor.blogspot.com/

Thursday, December 18, 2008

"State Supreme Court Hears Constitutionality of Act 2"

"You can view the briefs here. And a summary here. You can read along with live blogging from the Court starting 8:45am Thursday Dec 18 here.

The State Auditor released the second part of her report and it says:

'Because Hawai'i Superferry Inc. is the only ferry vessel company able to take advantage of the small window of time created by Act 2, it appears that the legislation was designed to benefit a single operator.'

The State Auditor's report is available here.

Derrick DePledge of the Honolulu Advertiser adds his reporting here. The Star Bulletin's Tom Finnegan here. Even the rabidly Republican, Lingle-fauning Maui News had to report this damning audit.

Sample of State Attorney Dodging the Justice's questions blogged by Robert H. Thomas at http://www.inversecondemnation.com/:

9:34: Nakayama: how many businesses does Act 2 aplly two ..how many businesses fit the description?

9:34 DOT: nothing in record to show that

9:35 Acoba: Act 2 says 'large cap ferry vessel company, etc...'

9:35 Is there any entity that fits that descript other than HSF?

9:35 DOT: on this record, no. Acoba: I am asking YOU.

9:35 DOT: not a factual distinction.

9:36 acoba: my question was whether any other entity that fits description.

9:36 acoba: any other ferry that uses Kahului harbor now?

9:35 DOT: not a factual distinction.

9:36 acoba: my question was whether any other entity that fits description.

9:36 acoba: any other ferry that uses Kahului harbor now?

9:36 Acoba: state only has agreement with HSF for use of K Harbor, right? No other entites or contracts?

9:37 DOT: Act 2 contemplates use of K harbor by others. Acoba: before it sunsets?

9:37 Acoba: you mean that other ferry companies may use K Harbor and sign agreements with State before Act 2 sunsets?

Check the Court Website to watch for the opinion."

Aloha, Brad

"The barge and ramp systems are unequivocally [NOT] the most efficient system to on and offload"

Harry Eager has two articles today on the State Audit in the Maui News, "Auditor questions rules for input, blurring of environmental obligations," and "Auditor critical of ferry." The latter article contains the following quote:

"Hawaii Superferry released a statement commenting on the audit. It said...'Eight months of operations have proven the barge and ramp systems are unequivocally the most efficient system to on and offload the ship and quickly disperse traffic.'"

The barge and ramp at Kahului Harbor is NOT the most efficient, as is the following system:



The above filmed ramp system is both faster and much more efficient than the barge and ramp at Kahului Harbor and much less expensive than the high-dollar $38.5 million hastily spent on the Hawaii barge and ramps made in low-cost China.

Aloha, Brad

State Auditor Released Final Report on This Today

The Final State Auditor Report on this is out today:

Performance Audit on the State Administration’s Actions Exempting Certain Harbor Improvements to Facilitate Large Capacity Ferry Vessels from the Requirements of the Hawai'i Environmental Impact Statements Law: Phase II

Here are the 'Summary' and 'Recommendations and Response' from that report:

'Summary'

"We conducted the second phase of this performance audit in response to Act 2,
Second Special Session Laws of Hawai'i 2007. The audit examines the state
administration’s actions against the requirements of the Hawai'i Environmental
Impact Statements (EIS) law, Chapter 343, Hawai'i Revised Statutes. The audit
reviewed the State’s actions in not considering potential secondary environmental
impacts of the harbor improvements prior to granting the exemption from these
requirements. The Phase I report, Report No. 08-09, was issued in April 2008.

We found that with the impending arrival of Hawai'i Superferry, Inc., the Department
of Transportation (DOT) in 2004 and 2005 reversed a long-standing policy of not
providing additional pier-side equipment for harbor users. State officials ignored
the recommendations of their technical staff, setting off a chain of events that
culminated in the selection of inadequate harbor improvement systems. Moreover,
the DOT’s passive approach to the issue of addressing secondary or cumulative
effects was made possible by a combination of flawed or unclear EIS laws and rules.

Saddled with a deadline imposed by Hawai'i Superferry and supported by
administration officials, DOT technical staff implemented the only harbor
improvement system that could meet their time horizon, a combination of barges
and ramps, which was not their preferred choice. The state-funded $38.5 million
harbor improvement system has proved to be problematic, best exemplified by
Kahului Harbor’s barge, which is continually battered by high winds and waves.
Not only have the barge and pier incurred more than $3 million in damages (the
liability of which has yet to be determined), the barge also requires the services of
a tug boat to secure it to the pier during ferry operations. Like the barge and pier
damage, responsibility for this significant extra expense has yet to be determined.

But the State has a larger and more expensive challenge over the horizon. Last
summer, Hawai'i Superferry officials announced that they will be outfitting their
second ship with an onboard ramp, a feature that eliminates the need for the $10
million barge-and-ramp system at Kawaihae Harbor and the $2.5 million ramp at
Näwiliwili Harbor, both built to accommodate Hawai'i Superferry and no other
users. If company officials choose to retrofit their first ship, the Alakai, with
a loading ramp, the State’s entire $38.5 million barge-and-ramp system would
quickly become unnecessary. Because the barges were designed specifically for
Hawai'i Superferry use, they cannot be repurposed in their present configuration
by other harbor users. In addition, since they were built in China and are therefore
prohibited from transporting cargo within U.S. waters, the barges may have little
use for potential buyers. This situation would have been avoided if state officials
had required Hawai'i Superferry to carry an onboard ramp in the first place.

We also found that the legislation on behalf of Hawai'i Superferry compromised
the State’s environmental laws and set a worrisome precedent for future
government accommodation that puts the interests of a single business before
the State’s environmental, fiduciary, and public safety responsibilities."

'Recommendations and Response'

"Our recommendations are designed to address the flawed or unclear
EIS law and rules. The Office of Environmental Quality Control in the
Department of Health should establish guidelines, including a checklist
for agencies to ensure that all of the steps required by the rules have been
properly addressed and documented before according an exemption.

The Environmental Council should establish a process to provide guidance to
agencies in determining whether an action is projected to have a significant
environmental impact which would make an exemption inapplicable;
amend the EIS rules to ensure the OEQC provides training to state and
county agencies; clarify the agency consultation process regarding proposed
exempted actions; and establish clear definitions of cumulative and secondary
impacts in regards to water carrier operations and the scope of their coverage.

Finally, we recommend the DOT Harbors Division investigate options
for a new barge mooring and fender system for the Kahului pier,
determine responsibility for barge maintenance, and resolve financial
liability issues over damage and unplanned expenses such as tug services.

The DOT response sidesteps many of the issues and challenges some wording.
But most of the language came from documents from the department.

The department disagreed that on-board loading ramps would render the State’s
$38.5 million barge-and-ramp system unnecessary. Yet, the ferries’ shipbuilder
as well as ferry officials have declared that on-board ramps would avoid the use
of the problematic barges.

After a careful review and consideration of the department’s comments, we
made minor changes and clarifications to our report, none of which affected our
findings and conclusions."

Marion M. Higa,
State Auditor

The 'findings and conclusions' in the Phase I report are here:

Performance Audit on the State Administration’s Actions Exempting Certain Harbor Improvements To Facilitate Large Capacity Ferry Vessels From the requirements of the Hawai‘i Environmental Impact Statements Law: Phase I

Including from the 'Summary' of that:

"...Our audit work was delayed by access issues, including access to public information and allegedly private, attorney-client, and executive privileged information. The attorney general took an active role in reviewing requested documents and interceding in our audit interviews."

And from the 'Recommendations and Response' of that:

"...The attorney general raised concerns about the breadth and scope of our audit activities and requests and the impact it had on his staff. Had we been allowed to follow our normal audit process, the Department of the Attorney General would have had limited involvement and we would not have encountered delays."


Aloha, Brad

Competitor Go! Extends Their $39 Inter-island Offer

"Happy Holidays from Go!

Dear Valued Customer,

We have extended our $39* fare sale!. In celebration of the holidays this year, Go! is offering special $39* and $48* one-way fares. Be sure to visit http://www.iflygo.com/ now because these great deals will go fast. Our exciting $39* fares are valid for travel through December 31, 2008 and must be purchased by 10 p.m. Hawaii Standard Time, Thursday, December 18, 2008. Go! also today announced it is adding extra flights to its regular schedule during the holiday season due to high demand. Continuing our mission to bring you closer to your friends and families at the lowest possible cost, we have added the following extra flights during the holidays [see their website].

* Tickets must be purchased at http://www.iflygo.com/. Tickets are nontransferable and nonrefundable. Seats are limited and fares may not be available on all flights or in all markets...$39 special fares are valid for travel from December 15, 2008 through December 31, 2008 and must be purchased by 10:00 p.m. Hawaii Standard Time, Thursday, December 18, 2008. Other restrictions may apply."


Aloha, Brad

European Rider Notices that the Shallow Draft makes No Sense for Hawaii

A couple of interesting blog posts recently by riders of this vessel. First, a European comments on the shallow draft not making sense for these waters and reducing the seakeeping nature of the vessel:

The SuperFerry. Three of us would not call it “super”
Posted in Hawaii by Ulf on December 17th, 2008

"After a rather eventful Sunday we took the Hawaii Superferry from Honolulu, Oahu, to Kahului, Maui, on Monday 24th. While the Superferry was highly disputed in Hawaii in the last years, it turned out to be helpful for the Maui residents. They can now take their pickup trucks to Oahu for shopping tours, especially after the “Aloha Airlines” went out of business. Some natives have a different opinion on this as tourism to Maui grows.

There are controversies about the environmental impact of these ships. I’m not worried about this, at least concerning a possible impact on the sea life. The Alakai just has a draft of 12ft. That is very little. Other ferries which I traveled with on the Baltic see have a draft between 20 and 23ft. Maybe some of the harbors on the Hawaiian islands are not deep enough for larger ships. So, why am I telling you about the draft of these ships? A small draft will make ships less stable..."

Here are my replies:

Re: “…it turned out to be helpful for the Maui residents. They can now take their pickup trucks to Oahu for shopping tours, especially after the 'Aloha Airlines' went out of business. Some natives have a different opinion on this as tourism to Maui grows.”

It has proven to be helpful to Oahu residents. The pickup truck users you notice are mostly Oahu construction workers going to Maui and returning. There are plenty of retailers on Maui as they would attest. We still have 3 major interisland airlines, Hawaiian, Go!, and now Mokulele, which offer better fares than HSF. We call them residents or locals or kama'aina. And tourism to Maui on all fronts is dramatically down in the year that HSF has been operating. HSF is not a significant contributor to the tourism industry in Hawaii even though it did get a disproportionate level of support from the Republican administration here.

Re: “There are controversies about the environmental impact of these ships. I’m not worried about this, at least concerning a possible impact on the sea life.”

Mechanically the ship has not yet been able to operate through the entire Humpback Whale season here. The waters that you rode through later on in the Winter become some of the most densely populated Humpback Whale waters in the world. In the Canary Islands these types of vessels kill whales on average every 2 months. It remains to be seen what the effect will be on marine mammals here. On land, destructive non-indigenous invasive species spreading from one island to another are a real problem. For example, mongoose, fire ants, varroa mites, and coqui frogs are not yet a problem on Kauai.

Re: “The Alakai just has a draft of 12ft…Maybe some of the harbors on the Hawaiian islands are not deep enough for larger ships.”

No, all of the harbors that HSF had planned to use are deep enough to take deeper draft commercial ships. The shallow draft of this vessel was not chosen for the need of these harbors and the principals overlooked that the shallow draft would make the seakeeping nature of the vessel less stable for acceptable commercial passenger comfort and profitability in windy and swell conditions a good portion of the year here. They and the DoD have also overlooked that the high cross beams between the cat hulls makes the vertical motion (a key MSI variable in determining motion sickness) that this vessel can go through substantially greater than other fast cat hulls that have lower cross beams or M hulls. The shallow draft design that you point out is intended for much grander purposes than the deeper draft accommodating harbors of Hawaii.

Re: “…I must admit that it was a bit like traveling in a glider while looking for lift winds. Perhaps irrational driving trains to stand these conditions?”

Check this out, it gets really interesting in the last 30 seconds: http://www.youtube.com/watch?v=tSfoWWquSq8 and also http://www.youtube.com/watch?v=g20Qho-JeRA.

The other recent blog post was from a passenger, Aaron, who noticed a weird question:

Flashback: Hawaii Superferry questionnaire 12 15 2008

"Back in September, I went to Hawaii for a week with my family, and we decided to go from Honolulu to Maui by ferry. It’s a slow trip compared to taking a flight, but worthwhile especially if you are traveling with kids.

As you approach the boarding lanes, a Hawaii Superferry employee goes through the standard procedure of checking your vehicle and asking you questions about what you are taking with you. Even though you are hopping from island to island in the same state, the procedure resembles crossing the border with a neighbouring country or boarding an international flight, which makes sense in today’s world, and also for environmental reasons. So both sides engaged in this somewhat flat but polite conversation that goes like this:

'Are you carrying any firearms or ammunition?' 'No.'

'Are you taking any domestic animals with you? Any livestock?' 'No on both accounts.'

'Do you have any flammable materials in your baggage?' 'No.'

'Any plants, seeds or soil?' 'Nope.'

'What about human bones?' 'No. Wait. What???'

I know that there must be a reason for the question, some historical precedent or technical legality justifying it. But I can’t help but wonder if anyone was ever caught in the process.

'Human bones? Hummm, let me see. Hey sweetheart, are those bones in your bag human?'"

And my reply:

Aaron,

Yeah, they seem like weird questions. Here is the Lingle inspired document that they came from: http://www.hawaiisenatemajority.com/wp-content/uploads/2007/11/superferry-governor-operation-conditions-11-2007.pdf

Actually, I thought more about your observation today and re-read the Governor’s E.O., and I think you have a good point that the company doesn’t need to ask all of those questions in the questionnaire in the manner that they are doing. Asking about bones and such seems very odd taken out of context, and people here would not be transporting bones anyway. It’s more like artifacts and opihi that they could ask about and that might be attempted to be smuggled. Not to mention excessive amounts of limited resources like reef fish, limu, maile, and mokihana that are allowed to be taken on the vessel.

In the case of the opihi, the Governor’s E.O. says they are not suppose to be transported on HSF, but there is no penalty for being caught with them, so why wouldn’t passengers attempt to smuggle them aboard when they can be sold on Oahu for an 'average price at local fish markets of roughly $30 per pound for shelled opihi.'

Anyway, fine points like this are an example of how the Governor’s E.O. and Act 2 were not well thought out and hastily written. Tomorrow we have a State Supreme Court case about all of this.

We'll see if the Hawaii State Supreme Court has the intellectual fortitude to set this all straight,

Aloha, Brad

Hope this guy can type fast...Live blogging Act 2 Case

From www.inversecondemnation.com:

"Live Blog of HAWSCT Superferry Oral Arguments (Dec. 18, 2008)"

"On Thursday, December 18, 2008, starting at 9:00 a.m., the Hawaii Supreme Court will hear oral arguments in 'round 2' of the Hawaii Superferry case. Starting at about 8:45, this page will go live with updates.

Bookmark this page and return then, or sign up below to receive a reminder email. Your email will not be saved, and will not be used for any purpose other than to remind you.

The arguments are scheduled to last for one hour (1/2 hour per side), and although the Justices have the discretion to keep going past that time, they rarely do..."

Hope somebody can live blog the reading of the decision too,
Aloha, Brad

Recap and Briefs of upcoming State Supreme Court Case by inversecondemnation.com

Atty. Robert H. Thomas has a good recap today of the State Supreme Court case and hopes to be live blogging it on Thursday. Briefly from www.inversecondemnation.com:

"Hawaii Superferry Supreme Court Briefs"

"The case that would not go away, the 'Hawaii Superferry' litigation, is back in the Hawaii Supreme Court this week, with oral arguments scheduled for 9 a.m. on Thursday, December 18, 2008. I'll be attending the oral arguments, and technology and typing skills permitting, live blogging it.

The key briefs of the parties are posted below:

Sierra Club, et al.'s Opening Brief

State of Hawaii Dep't of Transportation Answering Brief

(Hawaii Superferry filed an Answering Brief, which "incorporates by reference the arguments set forth in the State's Answering Brief, filed August 18, 2008.")

The Court's web site describes the issues in the appeals:

'A prior review by this court in Sierra Club v. Department of Transportation of the State of Hawaiʻi (Sierra Club I), 115 Hawai`i 299, 167 P.3d 292 (2007) [for that opinion, and the briefs in that phase, go here]...'"

My understanding, Robert, is that they each have only 30 minutes to orally restate their cases and that the proceedings on Thursday will be short. Not sure it will be too conducive to live blogging. The decision may be as early as Thursday or Friday.

Aloha, Brad