Tuesday, July 27, 2010

Superferry's Boondoggle Business Plan

Source: http://thegardenisland.com/news/opinion/mailbag/article_ffeeaac0-993a-11df-a4d1-001cc4c03286.html?mode=story

Superferry’s boondoggle business plan

The July 24 letter writer Cayetano Gerardo must have missed the recent AP news item in The Garden Island, “The Hawaii Superferry was sailing under a facade of success ... shortchanging the state on its monthly fees. The company’s inability to pay fully [as early as] July 2008 indicates it was in troubled waters nine months before [voluntarily ceasing operations]...”

Indeed, let’s remember and support the elected officials who took a stand against a boondoggle business plan that was destined to fail in the free market.

Furthermore, the voters/consumers of Hawai‘i can thank the blind political supporters of the Superferry for 18 more years of higher prices to cover the more than $40 million that the state lost on the Superferry and which other harbor users now have to cover and pass on to the consumers of Hawai‘i.

Indeed, come election day let’s remember the politicians who did not speak up and those who supported a Superferry business plan that was destined to fail under top-heavy operating expenses and ultimately cost the taxpayers and consumers more money for nothing. Vote ‘em out.

Goofy Hannemann's Super Fairy Dreamin'

Larry Geller called this spot on before and after Hannemann's press conference yesterday:

Sunday, July 25, 2010

"Will Mufi 'turn to desperate measures, like, say, reviving Hawaii’s Superferry' if he becomes governor?"

by Larry Geller

Internet find:

Will Birmingham-area politicians turn to desperate measures like, say, Hawaii's Superferry to solve the Grants Mill Road bridge problem? Never say never. [The Birmingham News, Chat live with Driving Miss Crazy on Monday at 1, 7/25/2010]

Before they do anything that desperate, I hope they check Google. They’ll learn of the extensive subsidies Hawaii bestowed upon the ferry business, that it was losing money, and that the state knew about it months before the ultimate bankruptcy filing.

Of course, as a government-owned operation, it would be reasonable for Birmingham to decide to invest in a ferry as a public service, just as government runs transportation systems anywhere. New York City provides the Staten Island Ferry for free, as an example of a subsidized ferry service.

It was interesting, though, just to see “Hawaii Superferry” and “desperate measures” in the same sentence. There really isn’t much in it.

This next, however, is much more serious. It’s a snip from an interview with gubernatorial candidate Mufi Hannemann, in which he seems unaware that Hawaii Superferry was not a viable business from day one:

My next question is one of my favorites because every politician loves the idea. So Mufi is elected and on the first day of session the legislative leadership says he can give them one bill and they will immediately pass it - what is the bill.

Mufi thought about this for a good 20 seconds. And then he said funding to restart the super-ferry and do the EIS. Mufi went into great detail about the great benefit that people in the state had when it was running. [David Thielen (Huffington Post), Mufi Hanneman Interview, 7/12/2010] [The PUC CPCN needs to be redone too.]

In the audio record of the interview, Mufi says “I saw enough of it that I knew it was going to be successful” (around 29:35 in the interview). Unfortunately, this is contrary to the facts as revealed by the Associated Press story of 7/21/2010 (after the interview date).

Again, a decision by government to create a Hawaii inter-island ferry service and pay the cost could be a rational decision (if they can also figure out how to do it without causing extensive seasickness). The Hawaii Superferry, however, was to be a private, profitable business, not a municipal- or state- run ferry. The taxpayer was subsidizing the potential profit of Hawaii Superferry’s owners.

But look, Mufi has a rather poor record at implementing water transportation so far, and a tolerance for high losses:

TheBoat, Honolulu's commuter ferry from Kalaeloa to Aloha Tower, gives West O'ahu residents an oceangoing alternative to increasingly clogged highways, for no more than $4 per round-trip ticket.

What makes the service so cheap is that Honolulu taxpayers pay an additional $120 per roundtrip rider to cover the actual costs of operating TheBoat, according to a city study.

The cost of carrying each passenger on TheBoat is about 62 times more than the cost of an average trip on TheBus. It is also significantly more expensive than comparable Mainland ferry services. [Honolulu Advertiser, High subsidies may scuttle Hawaii's ferry, 2/15/2009]

It was ok with Mayor Mufi to charge taxpayers $120 for each roundtrip rider on his boat service before it was finally terminated.

Hawaii Superferry certainly had an EIS problem, but even without that, the business appears to have been dead in the water from day one. The Superferry fiasco wasn’t Mufi’s responsibility, but his lack of understanding of what ultimately sank the business combined with willingness to tolerate losses incurred by TheBoat should be a concern, given the need to control costs for a possible rail transit system planned for Honolulu.

(Thanks to Kevin for pointer to the interview story)

Monday, July 26, 2010

"Mufi fiscally irresponsible to ignore Superferry losses"

by Larry Geller

Again, the news tells us that Mufi Hannemann is serious about trying to revive the Hawaii Superferry, with the same ships that couldn’t be economically successful the first time around.

Maybe, like Sarah Palin or George Bush, he just doesn’t read the newspapers. The Associated Press revealed on 7/21/2010 that the Superferry was unable to pay its fees to the State fully nine months before it ultimately went bankrupt. Analyst Brad Parsons had estimated the costs of running such a large, fuel-hungry ship much earlier and published the information on his popular blog.

Our press seems unwilling to ask the hardball questions. Won’t a reporter please confront him on this one day soon?

Perhaps hizzoner knows the economic facts but is playing to the Oahu voter’s dreams of the Superferry’s return, and their belief that it was viable business killed by a bunch of Kauai tree huggers and Maui whale worshippers.

All the more reason for some reporter to call him on it and set the record straight.

See also:

Hannemann Wants To Revive Hawaii Superferry: Opponent Abercrombie Called That A Fantasy (KITV, 7/26/2010)

Candidates for governor pitch economic plans (AP, 7/26/2010)

Will Mufi “turn to desperate measures, like, say, reviving Hawaii’s Superferry” if he becomes governor? (7/25/2010)

[Editor's note - We believe the only reason that Goofy Hannemann raises this issue now is because he believes it is a way to energize the Oahu vote, regardless of whether it is realistic or not. By raising the Super Fairy Dream, Hannemann shows what kind of a baseless Governor he would be.]

Monday, July 26, 2010

Goofy Hannemann's Plan for Recovery: Roads, Rail & da Superferry!

Oh, man, this is a frickin' joke. Superferry should be a total non-issue. They don't even have a Certificate of Public Convenience and Necessity anymore, not to mention the EIS that the state hasn't even begun. The Superferry is so insignificant considering the problems the state has to deal with, esp. considering that the Superferry's own business plan wasn't working, it's a farce that a Gubernatorial candidate would so desperately grasp at straws to even mention it:

"Candidates for governor pitch economic plans"
MARK NIESSE, Associated Press Writer
Monday, July 26, 2010, 10:09 p.m.

HONOLULU (AP) — Hawaii's Democratic candidates for governor proposed competing economic plans Monday, with Mufi Hannemann's ideas focused on construction and Neil Abercrombie's pitch centered on energy and agricultural sustainability.

Hannemann wants roads upgraded, Honolulu's rail project built and the Hawaii Superferry revived. He also would seek an audit of state spending and a commitment for the NFL's Pro Bowl to be hosted in the islands...

Abercrombie countered that the former Honolulu mayor's ideas emphasize projects instead of long-term policies to improve the business climate.

The former congressman is aiming for the state to use more renewable energy, produce more of its own food and remove governmental red tape.

"I propose that we save the state of Hawaii and immediately invest in our survival by having a long-term plan," said Abercrombie. "What we need to have is not just projects ... What we need to have is economic plans."

Hannemann's 10-point economic plan first calls for an audit of state government to help eliminate waste.

Abercrombie responded that a study of the government would delay needed changes.

Hannemann said an interisland ferry could be successful if it were tried again and followed environmental guidelines this time. He hopes to partner with a private company to bring back the same ferries previously operated by the bankrupt Hawaii Superferry.

"If it had been done properly, we wouldn't have experience the kind of difficulties that it had," Hannemann said. "It's just too good of an idea to let it go by the wayside."

But Abercrombie said a new ferry system would need to be more financially sound than the Superferry was.

"The only way the Superferry is going to be able to come back, except in a fantasy, is if there is a partnership with the United States military," he said. Abercrombie said he would seek a public-private partnership for a ferry system.

The Associated Press reported last week that the Hawaii Superferry had fallen short on its required payments to the state nine months before the Hawaii Supreme Court decision widely blamed for the ferry's closure came in March 2009.

The leading Republican candidate for governor, Lt. Gov. James "Duke" Aiona, has an economic platform based on easing government barriers to business and encouraging technology development... >>>Full Article>>>

Saturday, July 24, 2010

Superferry Politics: The Devil is in the Details, Mr. Schatz

Candidate for Lt. Governor Brian Schatz comments on the Superferry shortly before and after the unconstitutional Act 2 was passed by the Legislature, followed by a clip on the latest news about the unsustainable business plan that the Superferry always was:

Source: http://honoluluweekly.com/diary/2007/09/lessons-from-the-superferry/

"Lessons from the Superferry"
How do we move forward?
by Brian Schatz Sep 19, 2007

OK, we’ve heard the arguments. Depending on your perspective, either the Superferry is an example of how unfriendly Hawai’i is toward business, or it’s a cautionary tale for those who skirt environmental regulations. Both sides of this cultural and environmental divide are outraged. But where do we go from here? What are the lessons from this ongoing fiasco?

For Government:

Yes should mean yes, no should mean no.

The Superferry was told by one part of the government (the Transportation Department) that an Environmental Assessment wasn’t required, and then another part of the government (The Supreme Court) told them to do it. The Superferry folks are right in saying that this situation is ridiculous and that it shows how complicated and difficult Hawai’i’s process is. [?] I’ve heard smart legal arguments on both sides, [?] but the way to prevent a mess like this in the future is to have the Legislature clarify who has the final authority to decide issues like this. [?]

For Developers:

Do the Environmental Assessment if you have any doubt at all.

There are several reasons to just go ahead and do an Environmental Assessment for a major project. First, it’s the right thing to do, because it’s often the only opportunity for the public’s voice to be heard about important projects. Second, the law usually requires it. [?] And even if you can construct a legal case in which it isn’t required, you are going to end up fighting in court, which will make people angry and delay the project anyway. Finally, the Environmental Assessment process is not an approval thing–it’s a disclosure thing, which means that when the environmental disclosure is complete, the project goes forward... [???]

Source: http://honoluluweekly.com/diary/2007/11/the-next-legislative-session/

"The next legislative session"
Stay away from old issues and spend a little time on things that matter, like sustainability
by Brian Schatz Nov 14, 2007

Superferry Session is pau...

Avoid superobsession

The Superferry war isn’t over until a series of court rulings are made, but for legislative purposes, it’s done, and the vote wasn’t close. As the battle rages on elsewhere, it shouldn’t occupy the energy of the Legislature. This will take discipline because both sides are still fighting mad. But it’s no longer in the Legislature’s hands. One more caution on this issue: The majority of the general public wanted the Superferry, and they were willing to carve an exemption in our environmental laws to let it happen. [?] But they do not want this to become a habit, and they do not want weaker laws.

Get focused on supersustainability not the Superferry...

Source: http://www.businessweek.com/ap/financialnews/D9H3E6P80.htm

"Hawaii Superferry shorted state"
By MARK NIESSE The Associated Press July 21, 2010

HONOLULU--The Hawaii Superferry was sailing under a facade of success in the summer of 2008 -- boasting of record ridership -- but it had already begun to shortchange the state on its monthly fees, according to an Associated Press review of Department of Transportation records.

The company's inability to pay fully in July indicates it was in troubled waters nine months before the Hawaii Supreme Court decision widely blamed for the ferry's closure came in March, 2009. The court overturned a state law that allowed the Superferry to operate while an environmental impact statement was being conducted...

[Editor's note - The Devil is in the Details. Good policy is not always merely a matter of political compromise. Wisdom and experience would know that.]

Tuesday, July 20, 2010

Surprise, Surprise, Superferry "shorted state" even in it's best month

From: http://www.staradvertiser.com/news/breaking/98869884.html

"Hawaii Superferry shorted state"
By Mark Niesse Associated Press July 20, 2010

The Hawaii Superferry was sailing under a facade of success in the summer of 2008 -- boasting of record ridership -- but it had already begun to shortchange the state on its monthly fees, according to an Associated Press review of Department of Transportation records.

The company's inability to pay fully in July indicates it was in troubled waters nine months before the Hawaii Supreme Court decision widely blamed for the ferry's closure came in March, 2009...

>>>Read rest of article>>>

All you had to do was count cars and you could see this comin' many months in advance...