Monday, June 20, 2011

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

Hot damn, when it rains it pours.

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

[Federal Register: June 20, 2011 (Volume 76, Number 118)]
[Notices][Page 35941-35943]
From the Federal Register Online via GPO Access


Maritime Administration

Offer for Public Sale of Two High Speed Vessels

AGENCY: Maritime Administration (MARAD),
Department of Transportation.

ACTION: Notice.


SUMMARY: MARAD is offering for public sale, on an ``as is, where is''
basis, two fast ferry vessels, ALAKAI, Official Number 1182234, and
HUAKAI, Official Number 1215902.

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

of Shipyards and Marine Engineering, Maritime Administration,
1200 New Jersey Avenue, SE., Washington, DC 20590. Telephone:
(202) 366-1850; or e-mail Copies of this notice
may also be obtained from that office. An electronic copy of this
document may be downloaded from the Federal Register's home
page at: and the Government Printing
Office's database at:

SUPPLEMENTARY INFORMATION: The Maritime Administration
(``MARAD''), an agency of the U.S. Department of Transportation,
is offering for public sale, on an ``as is, where is'' basis, two fast ferry
vessels, ALAKAI, Official Number 1182234, and HUAKAI, Official
Number 1215902 (each a ``Vessel'' and collectively, the ``Vessels'').
MARAD will warrant title to the Vessels and convey title free and
clear of all liens. The Vessels were previously owned by Hawaii
Superferry LLC and MARAD has obtained title through foreclosure.
The Vessels were built in Mobile, AL by Austal USA and are currently
berthed at Lambert's Point Dock, Norfolk, VA. Specifications for the
Vessels are set forth at the end of this notice (no guarantee or warranty
as to specifications is made by MARAD).

All bids must contain specific information on the offer price, details of
any financing for the purchase of the Vessels, timing of the closing of
the proposed transaction, affidavit stating that the bidder is not
affiliated with the former owner, Hawaii Superferry LLC, or any of its
officers, directors or significant equity owners, and any contigencies
that could affect the closing of the transaction. Bidders may be either
U.S. citizens or foreign citizens. However, because the Vessels are U.S.
flagged, any bidder who is a foreign citizen must be prepared to comply
promptly with the provisions of 46 U.S.C. 56101 and MARAD's
implementing regulations. Responsive and successful bids should
include the following components: (1) Purchase of both Vessels
(MARAD only will consider an offer for sale of a single Vessel if
concurrent sale of both Vessels to separate buyers can be arranged),
(2) monthly reimbursement of any lay-up costs for the Vessels between
the execution of a sale contract and closing of the sale, (3) purchase of
the Vessels on an ``as is, where is'' basis with MARAD only required to
warrant title to the Vessels and that they are free and clear of liens, and
(4) cash sale or owner-procured financing (proposals with MARAD
financing of the Vessels will not be considered).

The successful bidder will be required to submit a $500,000 deposit
for each Vessel. Deposits must be made by wire transfer or in the form
of a certified check, drawn on a U.S. bank and made payable to MARAD,
within five business days of the bidder being advised that its bid is
approved by the Maritime Administrator. The successful bid will be
considered non-responsive if the bid deposit is not received in the
required five business day time frame. The deposit is nonrefundable.
No interest will be paid on the deposit. The successful bidder's deposit
will be credited toward the bid offer. The successful bidder may not
assign its right to the Vessel without consent of MARAD.

The successful bidder will be required to sign the MARAD form vessel
sale contract that, among other provisions, incorporates all of the
requirements set forth in this notice.

MARAD reserves the right to reject any and all bids and to seek
additional bids from the bidders and any other interested parties.
Arrangements to inspect the Vessel must be made through MARAD.
All inspections will be at the bidder's own risk and expense. For
additional information or to arrange an inspection, please contact
Mr. David Heller at (202) 366-1850 or Bids
and affidavits must be submitted by overnight courier to the Maritime
Administration, Office of Marine Financing, 1200 New Jersey Ave., SE.,
Room W23-432, Washington, DC 20590, Attention: Mr. Daniel Ladd,
by 5 p.m. 30 days from date of publication of this notice.


By Order of the Maritime Administrator.

Dated: June 14, 2011.

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

Aggressive Corrosion in Austal's Pride and Joy

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

But wait!, the story never seems to die:

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

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

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

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

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

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

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

Close to Shore

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

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

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

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

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

Two Versions

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

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

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

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

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