Best of this Blog

When I think back on it, I think this post was the best out of almost 500 that I did on this blog.

The post seems simple enough, but after searching the U.S. DOT database on all ferries in the U.S. and finding, "102 can transport at least 500 people at a time." I then had to Google every single one of those 102 ferries to find the ones that could transport at least 200 vehicles. It took many hours to determine, "Of those 102 ferries, only 5 operating in the U.S. can also transport at least 200 vehicles."

It was a useful effort, though, because it gave me a unique look into the total ferry operating environment in the whole U.S. Plus it nailed down the "closed class of one," which no one else had done publicly up to that point in time.

Hawaii DOT officials would do well to understand the whole ferry industry such as this in determining what should actually be studied in the new Chapter 343 EIS and what is realistic for Hawaii. Hulls A615 and A616 are not realistic for Hawaii as commercial concession vessels.

It sure would have been nice to have been paid as well as Belt Collins was to do this better work than what they have done on the subject matter.

Aloha, Brad

Alaka'i's Last Departure?

A media person sent this to me:

"Here's a pic of the Superferry leaving for good, shot from Aloha Tower today. You can have it and post it for free. Just don't (DO NOT) credit me."

Click on image to enlarge.

Bon Voyage one day early Saturday 3/28/09

----- Original Message -----
From: "Lori Abe"
Sent: Saturday, March 28, 2009 1:28 PM
Subject: Alakai Departs for Mobile

News Release
For Immediate Release
Saturday, March 28, 2009

Alakai Departs for Mobile

Hawaii Superferry today announced that the Alakai departs Honolulu Harbor at 3:30 pm today for Mobile, Alabama. The Alakai's 7,600-mile journey from Hawai'i through the Panama Canal, directly to Mobile, will take approximately three weeks.

Alakai's move to Mobile is to position her for future employment. Unfortunately, as a result of the Supreme Court decision, the company doesn't have a business opportunity in Hawaii for the foreseeable future.

Our customers require and deserve regular, reliable service. Plus, the ship has to be put to work...

# # #

Contact:
Lori Abe

JoAnn Yukimura: It's more than just the letter of the EIS law

From: http://the.honoluluadvertiser.com/article/2009/Mar/26/op/hawaii903260316.html

HAWAII SUPERFERRY

SHOULD HAVE HEEDED LAW FROM THE START

Following the law in the first place would have spared the Hawaii Superferry, government and the community all the expense and agony we have gone through. Yes, there would have still been conflict and differences of opinion, but they would have played out within the procedures set forth in the EIS law.

Those may seem onerous and expensive, but not half as expensive as Superferry's arrogant journey has caused to date for all involved. If the Superferry had followed the EIS law from the beginning, it would probably be operating free of any lawsuits today. Unfortunately, the EIS law requires only disclosure of impacts and mitigating measures. It should, but does not, require the decision-maker to stop the Superferry based on negative impacts.

The Superferry refused to follow even this weak law because it saw itself as "above the law." The governor and the majority of lawmakers who took oaths to uphold the constitution and state laws helped the Superferry avoid the law. Thank God the Hawai'i Supreme Court understands its role in the separation of powers and checks and balances set forth in our federal and state constitutions. When we do not follow the rule of law, we weaken ourselves. If we do not follow the law, what is there to keep order and credibility?

The Supreme Court has given us a chance to restore our confidence in the constitution and our system of government. Real credibility and trust (pono) will come when government, in resolving this issue, effectively addresses the negative impacts of the Superferry.

JoAnn Yukimura
Lihu'e, Kaua'i

Good Hawaii Public Radio show and response to Tim Dick

Good radio interview on Hawaii Public Radio this evening with Senator Hooser, Mike Formby, and Irene Bowie (it will be up on podcast in a few days). The host Beth-Ann Kozlovich mentioned Tim Dick's recent blog entry on HSF. I had not seen it. Later in the show Tim Dick called in to try to state his case particularly for the size of the vessel. Actually the size of the vessel is not the most important point. The key point for commercial viability is not size but instead the amount of engine power, four 9000 kW utility scale marine diesel engines...almost twice the effective engine power, fuel consumption, and carbon emissions of any other comparable means of regularly scheduled interisland travel here.

Based on a complete survey of all ferries operating in the United States, I believe the ideal Hawaii interisland ferry would utilize half of the engine power of the Alakai and Huakai, not transport vehicles for personal use, only cargo vehicles, be able to make the interisland transits in 4 to 5 hours, and be able to transport 400 to 500 people and less than 50 cargo vehicles only. The new Chapter 343 EIS should allow for such realistic viability instead of continuing to be for one type of vessel or company.

Have reposted a comment to this in reply to Tim Dick's recent post on his Use Half blog.

Aloha, Brad

Good Legal Review of Court's Act 2 Decision

Even though there is more significant detail in the actual decision, Attorney Robert Thomas does a good job reviewing the recent Act 2 decision by the Hawaii State Supreme Court in the following excerpts:

From: http://www.inversecondemnation.com/inversecondemnation/2009/03/hawaii-superferry-part-ii-judicial-supremacy.html

March 26, 2009

Hawaii Superferry II: Rooting Out Pretext In Legislative Actions

"Unlike Bulgo, in this case there is no evidence in the record that any company, other than Superferry, met the definition provided by section 2 when Act 2 was enacted."

Sierra Club v. Dep't of Transportation, No. 29035 slip op. at 36 (March 16, 2009) (emphasis added)

If you take away nothing else from the 124 pages of majority and concurring and dissenting opinions in the second "Hawaii Superferry" case, remember that sentence. It's the key to the case and understanding the Hawaii Supreme Court's recent willingness to put teeth into judicial review of legislation. In Superferry II, the court faced an interesting jurisprudential issue: whether Act 2, a statute most everyone who was paying attention just knew was designed to cover a single private entity was nonetheless a "general" law under the provision which requires that legislative power over state and county lands be exercised only by general laws, and therefore entitled to constitutional and judicial respect. Haw. Const. art. XI, § 5. In other words, whether Act 2's provisions providing benefits to all "large capacity ferry vessels" was merely a pretext to hide special benefit to the Superferry.

Superferry I Leads To Act 2

In Superferry I the court held the State DOT's exemption of the Superferry from the EA/EIS procedures in Hawaii Revised Statutes chapter 343 was erroneous, and that the ship could not continue sailing until the State completed at least an EA. Act 2 was a reaction by the other two branches of state government to that decision, exempting any "large capacity interisland ferry" from chapter 343, and creating an alternate review process which allowed the ferry to continue to operate while its environmental impacts were evaluated.

All five Justices joined the majority opinion authored by Justice Duffy, and held that Act 2 was not a general law, but one specifically designed to aid the Superferry. In doing so, the court pushed aside the usual deference courts pay to legislative judgments -- including the legislature's judgment about what it is doing and more importantly why -- and held that the legislature's intent in Act 2 was to benefit a single private entity. Justice Nakayama, joined by Chief Justice Moon, concurred in part and dissented in part on the limited issue of the state's liability for attorneys' fees...

Legislative Power, State Lands

The court held that Act 2 was the exercise of "legislative power over the lands owned by or under the control of the State and its political subdivisions" under article XI, § 5 because Act 2 purported to unwind the trial court's finding that the state-Superferry agreement by which the ferry used the harbor:

[s]ection 15 of Act 2 reauthorized Superferry to use the [state owned] lands at Kahului Harbor. The legal authority provided by DOT's exercise of executive power was removed by the circuit court's October 9, 2007 order rendering the operating agreement void as it related to the Kahului Harbor lands. Without the legal authority provided by Act 2 through an exercise of legislative power, the operating agreement would have remained void and unenforceable. Therefore, we hold that Act 2 was an exercise of legislative power over State lands.

Slip op. at 29-30.

Special Laws Measured by "Substance and Practical Operation"

Having determined article XI applied, the court next addressed what standard of review governed its analysis of whether Act 2 was a general or a special law:

Sierra Club contends that whether a law is special or general should be determined by its "substance and practical operation, rather than on its title, form or phraseology."

In contrast, DOT and Superferry argue that Act 2 is a general law that does not violate any provision of the Hawaii Constitution. They argue that the correct test for a general law is whether it creates a rationally based classification and whether the law applies to all members of the class created. For the following reasons, we agree with Sierra Club.

Slip op. at 30-31. In other words, the court rejected traditional "rational basis" review under which a court will uphold a law if there is any conceivable basis to support it.

Substance of a Statute is Found "In the Record"

Even thought Act 2 was facially neutral and did not expressly single out the Superferry for special treatment the Superferry II court held it was a special law. The critical holding is that courts should not defer to the legislature's assertion about what it was doing in Act 2 (providing a separate environmental review process for any "large capacity ferry vessel") but must examine the record in the case. The court rejected rational basis review, instead requiring an examination of facts before the court:

Unlike Bulgo, in this case there is no evidence in the record that any company, other than Superferry, met the definition provided by section 2 when Act 2 was enacted.

Slip op. at 36...

The Superferry II court did not discuss rational basis review, even though Act 2 surely can be classified as economic legislation which usually is subject to only cursory judicial review in which the facts of the case really are not all that relevant. Under rational basis review, what is important is whether the government's attorneys and the courts could "conceive" of any plausible rationale on which the legislature might have based the statute, not whether the legislature actually did so, or whether the legislation might actually fulfill its stated goals. Instead, the Superferry II court determined that the class of "large capacity ferry vessels" to which Act 2 purported to apply was "illusory" and could only apply to the Superferry.

After Superferry II and the cases noted above, governments defending challenges under the Hawaii Constitution no longer can rely upon creative lawyers to brainstorm after-the-fact rationales to support a statute. Instead, the facts of the case as developed in the record, and the court applying its own logic, resulted in the court holding that "[t]he benefits provided by Act 2 to a large capacity ferry vessel company were clearly intended to benefit only Superferry." Slip op. 63 (emphasis added).

The Achilles' Heel of Act 2 was the short time frame in which it applied; the court held that the "actual probability that the law will apply in the future" (slip op. at 45) must be considered, and it rejected the state's claim the record did not show that other ferries besides the Superferry might benefit from Act 2. Slip op. at 49-62. The court deconstructed the state's claim, and held that no other company but the Superferry could build or acquire a qualifying vessel, enter into an operating agreement with the state, and comply with all federal and state regulations within the 21 months of Act 2's life.

[Might add that the Achilles' Heel was not only the short timeframe. It was also more fundamentally in the narrow definition of a "large capacity ferry vessel" arbitrarily created in Act 2.--Ed.]

The briefs in the Superferry II appeal are posted here, and the archive of our live blog of the December 18, 2008 oral arguments is posted here. Our Superferry case page here.

Young Brothers Barge Company corrects misperceptions

From: http://www.mauinews.com/page/content.detail/id/516482.html?nav=10

"Young Bros. refutes claims;
Company officials say story contained ‘incorrect facts’"
By CHRIS HAMILTON, Staff Writer Maui News

POSTED: March 26, 2009

KAHULUI - Young Brothers Ltd. freight company officials this week countered recent claims from passengers and local business representatives that Hawaii Superferry was a less expensive and quicker transportation alternative.

Young Brothers spokeswoman Lynette Lo Tom contacted The Maui News on Tuesday to counter and clarify some "incorrect facts that people have said" about the barge company in a story published Sunday on Page A3 and continued on A5.

The story came in the wake of Superferry officials' decision to stop interisland service after a Hawaii Supreme Court ruling that the ferry could not operate under a state law passed to allow a "large-capacity vessel" to operate without an environmental impact statement. The story was told primarily from the viewpoint of Superferry employees as well as local contractors, small-business owners and farmers who had come to rely on what they said was the Superferry's fast and affordable service over the past 11 months.

"We want to be sensitive to Superferry employees (who were laid off last week) and what they are going through," said Young Brothers sales and marketing manager Keith Kiyotoki. "We don't want to seem insensitive to their plight and same time be careful not allow incorrect information out there."

Here are some of the exceptions Kiyotoki and Roy Catalani, company vice president of strategic planning and government affairs, took to the business owners' and passengers' comments:

* Superferry passengers said other methods of transportation between Kahului and Honolulu "take days" while the ferry could get passengers and their vehicles to their destination within a matter of hours. Young Brothers officials said their barge service typically takes two days. Weekday trips depart about 5 p.m. and arrive 5 or 6 a.m. the next morning. Customers can book their trips up to one day in advance.

* The Young Brothers officials said it's not correct to say that their company and others have not undergone environmental review for harbor projects. The 109-year-old Young Brothers has in the past and is today undergoing environmental reviews consistent with the same environmental review laws that apply to Superferry. The requirements kick in whenever the Hawaii Department of Transportation makes harbor improvements, including those laid out in the current Kahului Harbor 2020 master plan and proposed 2030 master plan.

* Contrary to what some may believe, Young Brothers has offered a 30 percent discount to agricultural distributors for the past 13 years, company officials said.

* Young Brothers has the ability to plug in refrigeration trucks during an interisland trip. The barge company also has its own refrigeration containers that cost as little as $30 to rent to store 500 pounds of fresh produce or more...

Young Brothers has a request before the Public Utilities Commission to reduce a number of rates, company officials said.

"We believe we provide an essential service to the islands and want to ensure that we continue to provide that service at a fair rate," Catalani said.

"Conspiracy Ferry: Did we get taken for a ride by Hawai‘i Superferry?"

Another very good article by NYT's freelance reporter Chris Pala:

From: http://honoluluweekly.com/feature/2009/03/conspiracy-ferry/

Conspiracy Ferry:

Did we get taken for a ride by Hawai‘i Superferry?

Christopher Pala
Mar 25, 2009

---

Hawai‘i’s Superferry ended its choppy ride last week, leaving tantalizing clues, but no proof, that the whole venture was about more than providing “reliable commercial service in these islands,” as CEO Thomas B. Fargo insisted at his dawn press conference.

“You look at the players involved, you have to question their motives, there are some pretty significant defense contracts involved,” said Rep. Hermina Morita, who chairs the House Energy and Environmental Protection Committee.

The defense contracts come in two categories.

First, the construction of the two ferries by Austal USA helped the young company get a contract to build a military version of the fast cargo and troop-transport ship—with an option for nine others—for a total of $1.6 billion, according to defense analysts and Austal USA itself. It also played a role in getting a contract for a Littoral Combat Ship prototype, a separate project to build up to 50 fast, aluminum warships at more than twice the price for each. The question is: was that the real purpose of building the Superferry?

Second, there are the ferries themselves. Now that the Hawai‘i Supreme Court has freed them of any obligation to serve the Islands, which has proved to be a money-losing operation, are they going to fetch a better price elsewhere? If they do, was that the main point for building them and bringing them here?

Austal and INCAT are the two giants of the big, fast aluminum catamaran business that have been supplying the world market for decades from their shipyards in Australia. Unlike most countries, the United States can’t buy foreign vessels for internal or military use: the Jones Act specifies they must be built domestically. So to crack the American market, Austal and INCAT needed to set up shipyards in the United States. Austal USA set up shop in Mobile, Ala., in 2001 and INCAT partnered with Bollinger Shipyards, Inc. in South Lockport, La., both with their eye on a contract for a military version of the Superferry.

By the summer of 2004, when work started on the first Superferry, Austal USA had built eight ships, all smaller than the Superferry. “Bollinger/Incat [USA] was a credible threat,” Bill Pfister, VP for external relations at Austal USA, said in a telephone interview from Mobile. “Building the Superferry was very helpful in demonstrating that we can build these ships in the United States as well as Australia, it was a major part of our credibility, almost a prerequisite,” he said. “It allowed us to build up the work force and the facilities.” Once the first Superferry was finished, that work force moved to the Littoral Combat Ship prototype, he said. And last November, as work was ending on the second Superferry, the Huakai, Austal beat Bollinger/Incat USA for the contract for the military version of the Superferry, called the Joint High Speed Vessel—essentially a Superferry with a helipad in the back.

In an interview together last year, Tig Krekel, vice chairman and partner of J.F. Lehman & Company, an investment bank in New York, and John Garibaldi, a former Hawaiian and Aloha Airlines executive who was CEO of Hawai‘i Superferry when it launched service, described how Garibaldi, Tim Dick and Terry White started the project together, financing it out of their savings until early 2004, when they raised $3.3 million. In September 2004, Lehman & Company took over the company and its principal, John F. Lehman, signed a deal to provide $85 million for the first Superferry.

“The ship started being built in summer of ’04, basically on spec,” Garibaldi said. “It was done on verbal assurances from Lehman and me that we would not leave them with the ship.” By the fall of 2005, Krekel said, Lehman was chairman of the board and the Maritime Administration was ready to guarantee $140 million of the $185 million loan.

Garibaldi said the shipyard had started building the ship “on spec” because the project’s financial success was so obvious “it was a no-brainer.” Krekel added, “We expect service to grow to five ships, the market’s there.”

But Alan Lerchbacker, the founding CEO of Austal USA, painted a different picture in an interview in Honolulu with Pacific Business News published on January 19, 2007, the same week Hawai‘i Superferry took delivery of the Alakai.

“I just worry about getting enough business to cover costs because of the sheer size of it,” he was quoted as saying. “They may need 400 to 500 passengers to break even.” Indeed, Hawai‘i Superferry executives had said the financial break-even point lay at 50 percent capacity, or 143 cars and 433 passengers, which the Superferry rarely attained.

Lerchbacker said he had suggested a 220-foot vessel, but the company chose the 326-foot model–and then another one of 344 feet.

Still unclear is whether Austal started building the Alakea “on spec” because it was the perfect way to prove its mettle to the military procurement community or because it believed that whatever the Hawai‘i plan’s merit, the ship itself would be attractive to the military. Also opaque is J.F. Lehman & Co.’s financial interest in Austal’s success. Atlantic Marine, which the company purchased recently and has a shipyard that adjoins Austal’s in Mobile, works with steel ships and “has no connection to Austal,” said Tim Colton, a shipping analyst in Florida.

The second kind of military contract that may be involved has to do with what would happen if the Superferries fail in their mission to make money in Hawai‘i or are prevented from operating by the courts.

On Thursday, Superferry CEO Fargo said, “We’re going to have to go out and find other employment for Alakai.” He added, “There are other ferry operations that would like to expand their service. Certainly the military may very well want to lease this particular ship.”

In July, BYM Marine and Maritime News reported, “Austal was recently awarded a new contract to provide additional features and equipment on the second Hawaii Superferry to facilitate its use by the military. This follows on from the long-term charter, since 2001, of the Austal-built 308-foot vehicle-passenger catamaran WestPac Express by the III Marine Expeditionary Force based on Okinawa, Japan.”

Pfister, the Austal vice-president, sidestepped in an e-mail exchange the question of whether a contract had been signed with the military to lease the Huakai. He explained that modification in question is a ramp that allows the ship to discharge cargo pretty much anywhere. It’s not usually used in civilian service because it’s heavy and cuts the number of cars by about 20 to 25, he wrote.

Lori Abe, a spokeswoman for Hawai‘i Superferry, said the ramp was added for use in the Big Island and that BYM is wrong.

Loren Thompson of the Lexington Institute in Arlington, Va., said leasing the superferries to the military would be difficult to pull off. “Leasing military equipment is not popular in Congress,” he said. Another analyst, who asked to remain anonymous, added: “Tolerance for leasing rather than buying ran out. Another lease now could be a hard sell.”

But Colton, the analyst, said that if anyone can pull it off, it’s Lehman. The Navy secretary in the entire Reagan administration who famously advocated a 600-ship navy (from about 500) was a major adviser and fund-raiser for John McCain and was seen as his likely his chief of staff. “He’s much better positioned than anyone else to get these boats leased,” Colton said.

While we may never learn what interest Lehman had in helping Austal get the military contracts, the value of the two civilian superferries should soon become apparent.

If Lehman fails to lease them out and stops servicing the loan, the federal maritime administration, the loan’s guarantor, would have to take over the ships and likely sell them to the Navy. That could trigger headlines like “Feds Bail Out Another Well-Connected Fatcat.”

And there would be some irony in Obama’s Navy bailing out one of his most powerful opponents.

"Hawaii Court Backs Protestors vs. Superferry" by Jerry Mander & Koohan Paik

Another good article, by Jerry this time. Nice not to have to expend any energy and see others pretty much get it all correct:

From: http://www.thenation.com/doc/20090406/mander_paik
Hawaii Court Backs Protestors vs. Superferry
(But the Sage Continues)
By Jerry Mander & Koohan Paik

March 24, 2009

In the latest turn of events in Hawaii's impressive grassroots uprising against a huge corporate-military boondoggle, the state's Supreme Court has ruled unanimously (5-0) that the Hawaii Superferry has no legal authority to continue its operations in the state, at least for the time being. But, hold the cheery encomiums and ginger-blossom bouquets; there are downsides to this story that, so far, most media have neglected. First, the good news.

The ruling struck down as "unconstitutional" a law instigated by right-wing Republican Governor Linda Lingle called Act Two, which was intended to circumvent an earlier unanimous Hawaii Supreme Court ruling (August 2007). That prior decision asserted that the giant high-speed catamaran--which races at 40 miles per hour through humpback whale calving grounds, uses 12,000 gallons of gas on a round trip between islands and may have other extremely serious environmental effects--could not begin operations without first completing a full Environmental Impact Statement (EIS) under the Hawaii Environmental Policy Act (HEPA). The Superferry company, however, owned by the infamous New York militarist financier John F. Lehman, former Secretary of the Navy under Ronald Reagan, advocate of a 600-ship Navy to dominate the world's oceans and member of the neocon Project for the New American Century, said it would not comply with the 2007 decision. Governor Lingle immediately backed Lehman via her (illegal) legislative foray, which exempted the Superferry from doing an EIS under HEPA and gave faux authority for the boat to keep operating. This was the biggest of many favors she did for Lehman and the company in a campaign many critics believe was designed as much for her own future in the Republican Party as for any concerns about Hawaii. Lehman was likely to be John McCain's chief of staff, had he won (according to a New York Times report before the election), a position that might have put Lingle in good position for national office, which she apparently craves.

And yet, after last week's court ruling, the Superferry company showed surprisingly little desire to fight, quickly announced it would suspend all Hawaii service within three days and did. This struck some observers as out of character for such an aggressive, self-important outfit, and raised new questions about the company's and Lehman's intentions: What's up now? Could it be the company actually wanted to get out? Does this confirm that the Hawaii adventure was really only a demo for bigger military options, as many suggest? We will come back to that below.

Anyway, the good news set off celebrations on the islands of Kauai and Maui, which have led the protests against the Superferry. Eighteen months earlier, on the occasion of the boat's maiden voyage, Kauai was the site of a landmark two-day uprising, where 1,500 protestors occupied the shoreline at Nawiliwili Harbor. They shouted their demands for an EIS, as dozens of surfers leaped into the water and paddled out dangerously close to the catamaran blades of the oncoming 350-foot colossus, stopping it cold in the water. It was a convincing display of determined resistance and daring from a laid-back community not usually known for political action. The boat never came back to Kauai.

Similar joy was displayed on Maui, which had suffered the only remaining Superferry run. After cancellation of service to Kauai, and then also to the Big Island, the Honolulu-Maui-Honolulu run, once daily, was the company's last hurrah. Three Maui groups--the Sierra Club, Maui Tomorrow and Kahului Harbor Coalition--were plaintiffs in both lawsuits that brought the Supreme Court victories. Irene Bowie of Maui Tomorrow said, "It's unfortunate all this had to take place; I wish the state and Superferry had taken the correct action in the beginning, and followed the law."

But wait! The battle may not be over. As David Brower, the celebrated leader of the Sierra Club during its heyday in the 1960s, often said, "there are no environmental victories, only holding actions; they always come back."

First there is the Cheneyesque Governor Lingle, who never admits mistakes, and never quits pushing. She said that ending Superferry service would be "devastating" to Hawaii--she may have meant devastating to herself--and arrogantly re-asserted that Act Two was entirely legal, whatever the unanimous court said.

Lingle revved up the conservative Honolulu broadcast media to blame environmentalists rather than herself for the loss of 236 Superferry jobs. But as one opponent responded, "If it's illegal jobs the Governor wants, then growing marijuana would be more profitable, better for the environment and doesn't need absentee owners."

Lingle announced that her Attorney General will ask the Court to "reconsider" its verdict, and that her Department of Transportation would do the EIS under HEPA that the company refused to do in 2007, hoping to someday lure it back. Lingle is also trying to again persuade the Democratic legislature to save the Superferry via some tricky legal interventions. Opposition leader, State Senate Majority Leader Gary Hooser, would have none of it, blaming the whole situation on Lingle for exempting the Superferry from an EIS in the first place. Senator J. Kalani English agreed: "It goes back to the beginning. We [opposition senators] told the Superferry, 'simply follow the EIS law.' If they had done that, none of this would have happened."

Then there's the Superferry company itself and its absentee owner, John F. Lehman. Most people assumed the court decision would also be "devastating" to the company. But now the sense is growing that it is secretly delighted, for two compelling reasons.

First, the operation has been a commercial flop and the company and its investors are losing money fast in hard times. According to the Honolulu Advertiser, during the past three months the Superferry has operated at below 25 percent of capacity for people, cars and trucks. And according to a citizens' watchdog commission set up by Act Two, the Oversight Task Force, overall performance figures since the project's inception are little better. The company itself always suggested 50 percent of capacity as its break-even point (at rates that included a gasoline surcharge), a mark it has only hit sporadically. It just looks like most people are not that into a three-hour boat ride through famously rough waters; the Superferry barely dented the far more popular, and far more fuel-efficient, airplane ridership. It would probably be less headache for Lehman to sell the two boats--each built for about $90 million (and one of which, because of all the cancelled routes, has never begun operating)--and transform a losing enterprise into, maybe, $200 million cash while also eliminating operating costs. Or to lease the boats at a profit to the military, or Singapore, or someplace without activist surfers. The Supreme Court served up the perfect escape route. (A strong rumor has the boats headed for a Guam-Saipan-Tinian career that, alas, would not avoid protestors. There are a lot of anti-military activists on Guam.)

Secondly, there's the military angle. As we reported on March 16 in The Nation and in our book, The Superferry Chronicles, during the last several years it became apparent that the Hawaii Superferry may have had more to do with military intentions than with its advertised role as friendly local transport for people and avocados between islands. The evidence is circumstantial but strong: Lehman's military advocacies, a board of directors that's like a shadow Pentagon and a CEO, Admiral Tom Fargo, who was commander of all US military operations in the Pacific under George W. Bush. What do all those military celebrities have to do with a neighborly ferry service? And why was the boat itself built completely out of scale for Hawaii--way too big, powerful and gas-guzzling, as the numbers are proving--but perfect for trans-Pacific purposes.

The company routinely denies this. At his shut-it-down press conference last Thursday, March 19, Admiral Fargo scoffed at the notion. "Not true," he said. "We certainly would not have gone to the trouble to paint the Alakai [Superferry] in the manner we did, to appoint her with first-class seats...if that [military use] was our goal." And yet, there have been innumerable contradictory published statements by other company executives (including Lehman) over the past eight years, that the Superferry might well be used for such military purposes as carrying Stryker tanks among the islands, among other uses. Why deny it? What can of worms does it open?

Most intriguing, for example, is the fact that in November 2008, the manufacturer and designer of the Superferry, Austal US, of Mobile, Alabama, a division of an Australian company, was awarded a huge US Navy contract to build ten new high-speed, light, high-capacity, aluminum-hulled, shallow water catamarans--which except for military accouterments (and that paint job!) are nearly identical to the Superferry design--for the Navy's Joint High Speed Vessel program. This is one of two Navy programs that contemplate some fifty-five aluminum-hulled boats in the Pacific in preparation for possible challenges from China. This first ten-boat contract with Austal is worth $1.6 billion.

According to the New York Times, Bill Pfister, vice president for external affairs of Austal, credited the Superferry project with helping Austal develop a credible US workforce and construction process. "Building the Superferry was very helpful in demonstrating we can build these ships in the United States" he said. Now they get to build ten more.

Even more important was getting the Superferry into the water in Hawaii and keeping it there to demonstrate its seaworthiness, making it a perfect demo model, a working prototype for the Austal-US contract. So was this a central goal of the Superferry project all along, to help Austal get the contract? Is this why it was so important to avoid an Environmental Impact study, which might have delayed the boat's deployment? Did Linda Lingle know this? And with the contract established, is this why the company can so willingly leave Hawaii? A lot of people believe that.

Whether, or how, John F. Lehman or any of his corporations, including the Superferry, actually achieves any financial benefit from Austal's bonanza, remains unknown. Two years ago, however, Lehman bought a shipbuilding company called Atlantic Marine, adjacent to Austal in Mobile, Alabama. So far, however, we have found no reports of further agreements between the two companies for collaborative work on the Navy contract.

So here's the wrap-up: Assuming Lingle can't overcome the court, the people of Hawaii are free of the Superferry, possibly forever, and have time to contemplate what kind of alternative ferry service might be desirable--smaller scale, slower, environmentally friendly, locally owned or better yet, publicly owned. And, a new diverse activist resistance coalition has been born. As for Governor Lingle, she has been embarrassed and exposed for her many disgraceful actions, and politically she may now be toast.

And John Lehman? Well, it appears his business acumen is confirmed. He will probably come out of his Hawaii adventure escaping financial harm, and maybe with considerable gain, depending on the sales and/or rental agreements he makes for his giant boats, increasingly admired by potential military clients. And if he does somehow get involved in the Austal production bonanza he helped support, that will bring him personally closer to fulfilling his grandest dreams of expanded US domination of Pacific waters.

Jerry Mander is director of the International Forum on Globalization and co-author, with Koohan Paik, of The Superferry Chronicles: Hawaii's Uprising Against Militarism, Commercialism and the Desecration of the Earth (Koa). more...

Koohan Paik is an Hawaii filmmaker and co-author, with Jerry Mander, of The Superferry Chronicles: Hawaii's Uprising Against Militarism, Commercialism and the Desecration of the Earth (Koa). more...

State gets extra time in Superferry Motion for Reconsideration

The State Supreme Court is being nice:

From:

invcondemnation

Robert Thomas

State gets extra time in Superferry recon motion:
http://www.state.hi.us/jud/opinions/sct/2009/29035ord.pdf


Aloha, Brad

Superferry Saga...week in review

There were so many rumors, reports, letters and videos out there in the media over the past week, that it was hard to keep up with all of them. This post will be a quick review of the more interesting of those:

First a letter to the editor in the Maui paper:

LETTER TO THE EDITOR

Count on Harry Eager to get it wrong (Maui News 3/17). In fact, the five member Hawaii Supreme Court unanimously agreed that Act 2 is unconstitutional special legislation. All five justices also agreed that the private attorney general doctrine applied and that attorney’s fees and costs are warranted to the prevailing environmental groups.

The only dissent involved two justices who took the position that Superferry should pay the attorney’s fees and costs, while the three member majority held that both the State of Hawaii Department of Transportation and Superferry are responsible.

Jeffrey Parker

Haiku

Media rumors were reported that the Alakai might go to Guam. Was also reported that the Alakai might be sent to an Austal yard to be fitted with an onboard ramp. Media rumors were reported that the Huakai (the second vessel) might go to Malta or may be leased to the military. The NYT reported that the Huakai was completed last week. KGMB-9 reported off the record that last week HSF had begun hiring Kaua'i staff and was planning on starting service to Kaua'i again in May, before the Supreme Court decision came down.

KITV/MSNBC reported on Wed. March 18, 2009, that Senate President Colleen Hanabusa said, "'I believe the new Superferry is not going to fall within the purview of the present environmental laws.' The Senate president is also an attorney trained to find loopholes. Hanabusa pointed out another one: [she feels] there is no legal barrier to Superferry going to and from Kauai or the Big Island. The state attorney general agreed."

KGMB-9 reported on Wed. March 18, 2009, that Lingle said of the decision, "It basically concluded that the Legislature can never do anything that favors one group over another, but that's what they do everyday." And Hanabusa added, "That's more of the concern that we have as a Legislature. It goes beyond just Superferry it goes to other pieces of legislation that we've done." Never mind that that's not what the specified decision actually said.

KGMB-9 reported on Wed. March 18, 2009, with video on a press conference on Kaua'i about the Supreme Court decision. The press conference had been originally called in response to the expected speaking engagement of Fargo that had been planned for March 19, but was cancelled. [March 19 was also the day of the Act 2 Scoping Meeting on Kaua'i one year earlier and fittingly March 19 is also the anniversary of the Iraq War.] Here is the The Garden Island newspaper report on the press conference.

San Francisco Chronicle reported on Thurs. March 19, 2009, Hawaii Insider travel reporter Jeanne Cooper writes a nice recap of these events and ends the article "Superferry's Sunken Image" with the following, "While Hawaii Insider is fond of taking ferries elsewhere on this planet, her stay on Maui last week reminded her again of how precious the whales and their island waters are to the people of Hawaii and its visitors. They're certainly worth the time it would take for an environmental study to prove (or disprove) that they would not be harmed if the Superferry continued."

The Honolulu Advertiser's Lee Cataluna on Thurs. March 19, 2009, had the best mainstream media Op-Ed of the week in "Superferry didn't have to be fiasco."

The Maui Time Weekly reported on Thurs. March 19, 2009, in "Ferry Interesting," Rob Parsons (no relation) writes a post Supreme Court decision follow up to his widely read status report of the prior week. Good quotes in this one. ; )

The Honolulu Advertiser reported on Fri. March 20, 2009, in "Study Ordered as Ferry Ends," reported low ridership figures for the fall and winter and the following quote, "Brennon Morioka, the director of the state Department of Transportation, said state contractor Belt Collins 'has completed most of the work' on the $1.5 million environmental review ordered by the law the court struck down. The department will essentially start the process over under the procedural framework of state's more stringent environmental review law, known as Chapter 343, but hopes to transfer the bulk of the work already performed into the new document. Morioka said a completed environmental review could be used by Superferry or any other ferry company interested in the Islands."

Brennon Morioka and Mike Formby have agreed in e-mail that a NEW Draft EIS under Chapter 343 needs to be written and comments on it sought from the public. They did not say, though, whether the state DOT recognizes that new scoping meetings need to be held on that new Draft EIS to properly set it's new parameters.

The Got Windmills? Daily Op-Ed Tilt from Rabid Reporter Andy Parx on Fri. March 20, 2009, in USED GUIDE DOG FOR SALE writes a piece of biting satire that attracted wide attention for the best sarcasm of the week on this topic.

KITV reported on Sat. March 21, 2009, that "The new [EIS] review will take four to six months...employees said the Superferry told them Saturday it may be back in touch in two month when it knows more about the possibility of resuming service here with its second ship. The Superferry's second ship has just been completed and is sitting in Mobile."

Lastly from Disappeared News on Sun. March 22, 2009, was the following spot on comment, "In the short, erratic regulation like that demonstrated by the entire Superferry debacle only increases transaction costs making it hard to enter markets and harder to remain profitable. If we truly want to be business friendly, we need to weed out this kind of erratic, ad hoc regulation and utilize systematic policy making and planning to inform regulation. Otherwise, businesses will spend more money lobbying when they see one business getting a pass. Yet, in order to spend money you've got to have it and so this system of back scratching only helps incumbents and tends towards oligopoly and monopoly." posted by line of flight 5:22 PM HST

There you have it, the dope on this for the past week,
Aloha, Brad

Paper of Record Nails It...and 2nd vessel is the 'Huakai'

Well this one is even a notch better than what Koohan just wrote. This article appears in the current New York Times and quotes from two well known leading industry analysts and from a current Austal-USA executive. Chris did an outstanding job with this article. BTW, the second vessel's name is the Huakai...shoulda been the Koa. Reposting with the author's permission:

From: http://www.nytimes.com/2009/03/22/us/22ferry.html?_r=1&scp=1&sq=superferry%20and%20christopher%20pala&st=cse

A Hawaii Ferry Ends Its Choppy Ride

By Christopher Pala for The New York Times
Published: March 21, 2009

HONOLULU — The Hawaii Superferry made its final interisland voyage last week, capping a period marked by lawsuits, low ridership and suspicion that its ultimate purpose had more to do with military contracts than with connecting the Hawaiian islands.

On Monday, the State Supreme Court effectively grounded the vessel, the Alakai, when it struck down an act passed by the Legislature last year that exempted its operator, Hawaii Superferry Inc., from carrying out an environmental impact study. The company said it would not appeal the decision.

“We’re going to have to go out and find other employment for Alakai,” said the president of Hawaii Superferry, Thomas B. Fargo, a retired Navy admiral who once commanded American forces in the Pacific. “Certainly the military may very well want to lease this particular ship.”

The Marine Corps already leases a similar transport catamaran, the Westpac Express, in Okinawa, Japan.

A shipbuilding analyst in Florida, Tim Colton, said the company’s owner and chairman, John F. Lehman, a former Navy secretary, was well positioned to lease the Alakai and a just-finished sister ship to the Navy.

In its 19 months of sporadic operations, the Alakai — an $85 million, 350-foot aluminum catamaran that sliced through some of the world’s roughest seas at 40 miles per hour — is widely thought to have lost money for Hawaii Superferry. The passenger-vehicle ferry usually operated well below the 50 percent capacity that the company had designated as its break-even point. For much of the winter, it operated at about 25 percent capacity, according to figures released by the company.

Responding to a lawsuit filed by environmentalists, the State Supreme Court initially struck down a permit that the administration of Gov. Linda Lingle, a Republican, had granted Hawaii Superferry to operate its boats without an environmental assessment. After that ruling, Ms. Lingle persuaded the Legislature to pass the act exempting the company from the requirement.

Why the company chose to risk operating without an environmental review, which would have taken the better part of a year, has been the matter of debate across the state, with Mr. Lehman’s background leading to speculation that Hawaii Superferry was primarily hoping to prove itself to the United States military.

Nearly two years ago, a former chief executive officer of Austal USA, an Alabama shipyard that built the Alakai, was quoted in a local weekly, Pacific Business News, as saying the ship was too big for its market of 1.3 million people.

“I just worry about getting enough business to cover costs because of the sheer size of it,” said the executive, Alan Lerchbacker.

Mr. Lerchbacker said that he had suggested Hawaii Superferry order a 230-foot vessel but that the company instead ordered two 350-foot models. The Alakai traveled between Oahu and Maui; the second ferry, the Huakai, was completed last week and had been scheduled to link Oahu and the Big Island.

State Representative Hermina M. Morita, a Democrat and chairwoman of the Committee on Energy and Environmental Protection, said she never thought either ferry would be profitable.

“You look at the players involved,” Ms. Morita said. “You have to question their motives.”

In November, Austal USA was awarded a contract to build up to 10 military versions of the ferry.

Austal’s Australian unit had built scores of giant aluminum catamarans used as fast ferries around the world, but the United States requires that all ships sold to its armed forces must be domestically built.

Austal USA, with a shipyard in Mobile, Ala., was created in 2001. “They have managed to become a major player in a very short time,” said Robert Button, a naval analyst with the RAND Corporation.

Austal USA’s vice president for external affairs, Bill Pfister, said that while the company had built several smaller ships in Mobile, the construction of the two Hawaii ferries had helped it develop the work force and demonstrate the construction processes to bid credibly for a similar military version.

The contract calls for one ship for the Army, with an option for four more for the Army and five for the Navy, for a total of $1.6 billion.

“Building the Superferry was very helpful in demonstrating that we can build these ships in the United States as well as Australia,” Mr. Pfister said.

At a news conference on Thursday, Admiral Fargo denied that Hawaii Superferry had any military agenda.

“We always get the question, ‘Was this designed as a military operation?’ ” he said. “That’s absolutely not true.

“We certainly wouldn’t have gone to the trouble to appoint her with 836 first-class seats, to spend huge sums of money to establish service here in Hawaii if that was our goal, which was unmistakably to provide a regular, reliable commercial ferry service in these islands.”

A version of this article appears in print on March 22, 2009, on page A18 of the New York edition.

"Coup de Superferry" by Koohan Paik and Jerry Mander

This is well written. This is the best this aspect has been written about yet. Reposting with the author's permission.

See also the next post here:

Paper of Record Nails It...and 2nd vessel is the 'Huakai'

From a website that is turning out some great articles: http://www.thehawaiiindependent.com

Coup de Superferry

Posted March 20th, 2009 in Opinion by Koohan Paik and Jerry Mander

But the biggest coup of all for the Superferry corporation is that it got what it needed out of the deal: to prove the boat’s seaworthiness as a demo model in competition to build the Navy’s Joint High-Speed Vessel (JHSV).

When the Superferry set sail on its last roundtrip voyage across the channel between Honolulu and Maui, Oahu grieved. CEO Tom Fargo gave his swan-song statement as the ship pulled out of the harbor, announcing soberly that the company would seek contracts for its two boats elsewhere. Tearful passengers lamented the end of this “alternative mode of transportation” that enabled FedEx and Love’s Bakery to ply their wares on Maui. At Kahului Harbor, on Maui, a tugboat tributed the final run by spraying seawater skyward. The evening newscasts were filled with images of many of the 236 employees who had been laid off, victims of a seemingly unfair (and unanimous) state Supreme Court ruling. “It’s like a death,” uttered port utility operator Corrine Dutro-Ponce.

Superferry is the supposed “victim” in the latest ruling that determined that “Act 2,” the bill that Lingle and the Legislature rushed into law, was unconstitutional, on the grounds that it was custom-tailored for one company: Hawaii Superferry. It cannot continue to operate, unless it first conducts an Environmental Impact Statement (EIS).

Economically speaking, this ruling gives the company a golden opportunity to cut their losses and bow out gracefully. Though Fargo and the media have been repeating like a mantra the phrase “over 250,000 customers” (as if this cumulative passenger count somehow justified the company’s existence), nonetheless, it has been operating at a loss since it arrived on our shores. According to figures presented in a March 18, 2009 Honolulu Advertiser story, for the three months of November through January, the company never attracted more than 25% capacity, far below the ridership necessary to break even. Figures revealed monthly at the Oversight Task Force meetings showed similar public disinterest in ridership.

In addition to staunching the fiscal hemmorhaging, the ruling enables the company to recoup more money through legal actions should they choose, now that Act 2 has been struck down. Act 2 had included a provision prohibiting the company from suing the state. Not only that, shutting down operations frees up the two vessels, which cost $180 million, to be leased or sold.

This, along with the cushy federal loan guarantee for $140 million issued by the U.S. Maritime Administration, leaves the departing company in much better financial shape than if they were to continue in Hawaii, running at a loss.

But the biggest coup of all for the Superferry corporation is that it got what it needed out of the deal: to prove the boat’s seaworthiness as a demo model in competition to build the Navy’s Joint High-Speed Vessel (JHSV). Austal USA, an investor in Superferry as well as its builder, won the contract worth $1.6 billion last November to build ten JHSVs.

That’s why conducting an EIS has been anathema to Superferry from the very start. Doing so would have kept the boat out of the water, and unable to prove itself against Austal USA’s competitors for the lucrative Navy contract.

That’s also very likely why Hawaii Superferry ignored Alan Lerchbacker, former CEO of Austal USA when he suggested to the company that it build a vessel smaller than 340 feet, concerned that the company would never break even on fuel costs. Lerchbacker was Austal USA’s outgoing CEO when he advised Hawaii Superferry in mid-2003, several months before the boatbuilder and Superferry sealed the deal in 2004 to build two 340-foot catamarans. A smaller vessel, as recommended by Lerchbacker, would not have been considered in the running for the JHSV contract. Cost-effectiveness as a civilian ferry ship did not seem to factor into the final decision. Building the largest high-speed aluminum-hulled catamaran in the United States seemed to be paramount, and certainly a premium in a competition for a Navy contract.

As it now stands from Superferry’s point of view, its job in Hawaii is pau already.

While the big winner in this fiasco is Hawaii Superferry, the losers are clearly the 236 workers who have lost their jobs during these rough economic times. If the company ever really cared about them, they would have done things right from the start, complied with state environmental law, conducted a proper EIS, and encouraged community participation in shaping what could have been a great public service.

Koohan Paik and Jerry Mander are the authors of The Superferry Chronicles: Hawaii’s Uprising Against Militarism, Commercialism, and the Desecration of the Earth.

See also the next post here:

Paper of Record Nails It...and 2nd vessel is the 'Huakai'

Kaua'i March 18th Press Conference on Superferry Shutdown

This press conference was originally called in preparation for HSF's CEO expected speaking engagement the next day on March 19th on Kaua'i. Instead, Kaua'i citizens speak on the 3/16/09 Hawaii Supreme Court ruling declaring Act 2 unconstitutional and the effort that led up to that:

From: http://video.google.com/videoplay?docid=24399614112386664



Pictures: http://www.flickr.com/photos/21400600@N03/sets/72157615836711738/

At the end of the video Koohan Paik appears who co-wrote a book on this subject matter, The Superferry Chronicles: Hawaii's Uprising Against Militarism, Commercialism, and the Desecration of the Earth (Paperback). The book is a good read for those wanting to understand how events got to where they are today on this issue.

Aloha, Brad

This blog is almost done...

I have a few more posts to do. There have been a lot of interesting reports and rumors over the past few days that I have been viewing and reading and not commenting on here. I may do a post or two on that. There are a few other things I wanted to comment on over the past few months but never got around to. May do that too.

This blog was a research project to actualize the phrase, "Ye shall seek the truth, and the truth shall make you free." Some of you may recognize where that phrase is used and comes from. I also wanted to back up the people on Kaua'i who intuitively knew right from wrong even if they were a couple years ahead of the official interpretation of the "law." Personally, I viewed it as a disgrace that the Governor would threaten mothers and children with violence when they were just standing up for righteousness and what the law should be, what our government is suppose to be founded upon. To this day I believe the Governor owes a number of individuals and the people of Kaua'i a personal apology.

When I started this blog, I didn't even know what a blog was. This just seemed like a good way to post comments in a public forum, but I am glad this research project is almost done. It has been a little too time consuming.

Aloha, Brad

What is the real reason that the Hawaii Superferry is leaving?‏

The following is an accurate compilation by DM on Maui based on information in the following Christie Wilson article:

What is the real reason that the Hawaii Superferry is leaving?

It would seem that the real reason that the Hawaii Superferry company is stopping operations is that their financial model is NOT working. They seem to be using the Supreme Court decision as an excuse... The failure to attract enough passengers/vehicles, even with severely discounted fares, seems to be the real rationale for the HSF withdrawal from the Hawaii inter-island market. The investors [may be] thankful that they have been given an excuse to immediately cease operations.

The Superferry Company claimed to the PUC that it would have a capacity for 866 passengers (50% break-even would be 433), and a capacity to carry 282 vehicles (50% break-even would be 141). If it is NOT attracting enough passengers and vehicles, it will be unable to cover its expenses.

It was claimed by Hawaii Superferry Company that their financial break-even point was to be able to travel at 50% of vessel capacity. The financial break-even assumed higher ticket prices (rather than the discounted fares now being offered), and it required a "fuel- adjustment surcharge" that is NOT being imposed. They have failed to attract sufficient ridership.

HAWAII SUPERFERRY -- RIDERSHIP
	Passengers (Break-even = 433)		Autos (Break-even = 144)		Commercial Vehicles
NOVEMBER 2008	18,890		5,100		621
DECEMBER 2008	16,590		4,868		586
JANUARY 2009	13,312		3,718		622
3 Month TOTAL	48,792		13,686		1,829
NOVEMBER-2008 Approximate Average per one-way transit	249		67		8
DECEMBER-2008 Approximate Average per one-way transit	207		61		7
JANUARY-2009 Approximate Average per one-way transit	166		46		8
3 MONTH Approximate Average per one-way transit	207		58		8

Ridership Source: Numbers from the Wednesday, March 18, 2009 Honolulu Advertiser.