Radioactive

Source: http://www.maritime-executive.com/article/seaward-services-to-operate-hsvs-alakai-huakai-for-us-navy

Seaward Services to Operate HSVs Alakai & Huakai for US Navy
Monday, March 19, 2012

Seaward Services (SSI), a HMS Global Maritime (HMSGM) company based in New Albany, Indiana, is pleased to announce that it has been awarded a contract through Military Sealift Command (MSC) to operate and convert the former Hawaii Superferry vessels HSV Alakai and Huakai for MSC...

The contract is anticipated to extend to last for one year and will end with the delivery of the vessel to Naha, Okinawa, Japan, where it will provide services to the 3rd Marine Expeditionary Force...

[Ed. Note - Report does not say where the Alakai and Huakai will be in the year before delivery to Okinawa...]

What's up with the Ferries?

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

■ 13 SEPTEMBER 2011 | 1:45 PM

U.S. weighs four bids on Hawaiian superferries

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

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

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

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

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

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

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

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

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

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

Hot damn, when it rains it pours.

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

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

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

[Notices][Page 35941-35943]

From the Federal Register Online via GPO Access

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

DEPARTMENT OF TRANSPORTATION

Maritime Administration

Offer for Public Sale of Two High Speed Vessels

AGENCY: Maritime Administration (MARAD),

Department of Transportation.

ACTION: Notice.

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

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

HUAKAI, Official Number 1215902.

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

FOR FURTHER INFORMATION CONTACT: David Heller, Office

of Shipyards and Marine Engineering, Maritime Administration,

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

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

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

document may be downloaded from the Federal Register's home

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

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

SUPPLEMENTARY INFORMATION: The Maritime Administration

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

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

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

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

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

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

Superferry LLC and MARAD has obtained title through foreclosure.

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

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

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

as to specifications is made by MARAD).

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

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

the proposed transaction, affidavit stating that the bidder is not

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

officers, directors or significant equity owners, and any contigencies

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

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

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

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

implementing regulations. Responsive and successful bids should

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

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

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

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

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

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

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

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

financing of the Vessels will not be considered).

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

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

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

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

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

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

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

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

assign its right to the Vessel without consent of MARAD.

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

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

requirements set forth in this notice.

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

additional bids from the bidders and any other interested parties.

Arrangements to inspect the Vessel must be made through MARAD.

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

additional information or to arrange an inspection, please contact

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

and affidavits must be submitted by overnight courier to the Maritime

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

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

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

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

By Order of the Maritime Administrator.

Dated: June 14, 2011.

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

Aggressive Corrosion in Austal's Pride and Joy

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

But wait!, the story never seems to die:

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

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

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

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

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

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

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

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

Close to Shore

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

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

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

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

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

Two Versions

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

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

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

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

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

What are the Hawaii Superferries Worth?

There is a new KITV report on a MARAD official's statements yesterday in Honolulu on the expected auction of the two Hawaii Superferries here and here. In those reports the MARAD official is quoted as saying the lien that MARAD has on the vessels is a total of $150 million. The report further quotes,

"'I can tell you we already have a $150 million lien on both ships. So, you can of course, provide a cash bid higher than that amount and take ownership of both the Alakai and the Huakai,' said Matsuda. Matsuda was in Honolulu Friday for the groundbreaking ceremony for the renovation of the Pier 29 container yard at Honolulu Harbor. The project is funded with federal stimulus money. Matsuda said Maritime Administration wants the Superferry vessels for military and humanitarian projects."

Hold that thought.

You can look a number of places to try to find what the two Superferries actually cost to build including all the nice extras in the interiors and things added later like the Whale detection systems to the Alakai and the ramp, wastewater treatment, and desalination plants added to the Huakai. A simple place to look is Wikipedia which says each vessel's total costs were $88 million each, here and here. Of course that's just Wikipedia and the Huakai's costs were at least $5 million more than the Alakai. But a quick thumbnail estimate is that the combined cost for the two was at least $181 million new before depreciation. Hold that thought.

Now, it took a little bit of hunting but we went back and looked at some of the early Bankruptcy Court filings, and it looks like the outstanding senior lien that MARAD has on the two vessels is actually closer to $140 million, not $150 million. Additionally Guggenheim Corporate Funding, LLC has a lesser priority outstanding lien of about $48 million and Austal had an even lower priority lien of about $22 million. The State of Hawaii was junior to them. Austal wrote off their loan as a loss. Guggenheim's lien was "secured" in equity. It is understood that all equity holders would lose their money on this. So the key takeaway on the liens is that MARAD's is $140 million, not $150 million and that Guggenheim also has a lien and would be out $48 million. The total of those two adds up to $188 million, only slightly more than what the two vessels originally cost to build. Hold that thought.

Now, let's got back to that MARAD official's quote about $150 million. First of all, does MARAD determine and run the auction? NO, they do NOT. It is the Bankruptcy Court that does that. The MARAD official's comment, "So, you can of course, provide a cash bid higher than that amount ('$150 million') and take ownership of both the Alakai and the Huakai,' said Matsuda," is not something that MARAD will determine and is misleading. First of all, MARAD's outstanding lien is $140 million, and NOT $150 million and more importantly because these ships are possibly worth closer to $180 million than $150 million, but also because it is not for MARAD to say what exact dollar figure will be enough to take ownership of the two vessels, that's the purvue of the Bankruptcy Court.

So, what are these ships worth? Well, it's somewhere between $150 and $180. They have a tax depreciable life of at least 20 years, even though the Huakai is almost like brand new and should not be depreciated as much as the Alakai. The Alakai, if you will remember, had significant damage to the rudder, was run aground going into drydock, and fell off it's blocks in drydock. But, if they were both actually being used continuously over the past 2 to 3 years, then the total depreciation on $180 million would be about $4.5 million for the Huakai and about $13.5 million for the Alakai for a total of about $18 million off of $180 million equaling about $162 million, which is about what these two vessels are really worth, leaving $140 million for MARAD, not $150 million, and the other $22 million for Guggenheim, recovering almost half of their potential loss. Keep in mind, to build these brand new for commercial use would be at least $90 million each and also the builder Austal is being paid about $180 million to build just one of these very similar ships for the U.S. military as JHSV's.

Our conclusion is then that these two vessels together are worth no less than $160 million total. Their actual worth is probably a little more than that. We would expect Guggenheim to be a bidder on this in addition to MARAD. We believe MARAD will actually be satisfied to recover their $140 million, but we also believe MARAD when they say the, "Maritime Administration wants the Superferry vessels for military and humanitarian projects."

Now, let's see if somebody gets 'em for less than that?

By the way, Mufi, your cheap friends aren't in the running.

TO ALL KNOWN CREDITORS...

On their Website:

http://www.hawaiisuperferry.com/

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: HSF HOLDING, INC., et al.,1 Debtors.

Chapter 11 Case No. 09-11901 (PJW) Jointly Administered

NOTICE OF BAR DATES FOR FILING OF PROOFS OF CLAIM

TO ALL KNOWN CREDITORS OF THE FOLLOWING DEBTOR ENTITIES:

Debtor	Address	Case Number
HSF Holding, Inc.	Pier 19 Ferry Terminal, Honolulu, HI 96817	09-11901
Hawaii Superferry, Inc.	Pier 19 Ferry Terminal, Honolulu, HI 96817	09-11902

On July 20, 2009, the United States Bankruptcy Court for the District of Delaware

(the "Court") entered an order in the above-captioned chapter 11 cases (the "Bar

Date Order") establishing certain claims bar dates in the chapter 11 cases of the

above-captioned debtors and debtors in possession (collectively, the "Debtors").

By the Bar Date Order, the Court fixed August 24, 2009 at 5:00 p.m., Prevailing

Eastern Time, as the general claims bar date (the "General Bar Date") in these

cases...>>Click here to read the rest>>

Winding down...Questions about the EIS

Not much to post here anymore. I still have the "webbots" going on this, but even they don't send back much info to me anymore. But, received an interesting letter to the editor cc'd to me recently. Here was my reply to that letter below:

Sally,

Good to hear from you again. About the EIS. As far as I know DOT put it on temporary hold after the Supreme Court decision, but that was before the bankruptcy. As far as I know DOT has not publicly said anything about the EIS since the bankruptcy proceedings began. The situation may have changed given those recent bankruptcy proceedings and as to the "need" for an interisland ferry and relative to the state budget problems.

As for your last question, "And what has happened to John Lehman, former chairman of the Superferry, and his investment firm? Did the Superferry bankruptcy cost him any money personally? Or were the only losers small investors, vendors, and the Superferry employees?":

JFL and Co is still in business. Their lawyer recently said in bankruptcy court after the abandoning of the vessels was allowed that JFL and Co lost all of their $85 million invested in HSF. All of the common stockholders and preferred stockholders are expected to lose any money they invested or expected value accrued in it. It still remains in question who buys or leases the two vessels and for how much. These vessels may be sold at loan value which would be a discount. A previous loser in this could actually end up making money if they acquire the vessels at discount and use them in the right situation. The right situation calls for either military use or one-way commercial routes of 70 miles or less between significant population/commercial centers.

Brad

-------- Original Message --------

Subject:	What is the status of the Superferry EIS?
Date:	Mon, 06 Jul 2009
From:	Sally Raisbeck
To:	Maui News (letters@mauinews.com)

What is the status of the Superferry EIS?

The DOT prepared a draft EIS for the Superferry that was released in January. Has that been completed? The title was for a "statewide large capacity ferry". This was meant to continue the fiction that Act 2 exempting the Superferry from environmental review was passed by the legislature as a general law, not a particular law to benefit the Superferry. So I presume that the state would complete the EIS, to continue the fiction. Has it been completed?

I would like to know if they dropped it when the Superferry went out of business. I would also like to know how much the state spent on the EIS, besides the $40 million on harbor improvements.

I am so glad they didn't go ahead with state plans to build a ferry terminal for the Superferry on the Kahului Harbor breakwater. That plan would really have been expensive. Probably the plans were expensive.

The company that built the Superferry got the Joint High Speed Vessel (JHSV) contract for 10 military versions of the Superferry last November. Does the Maui News know? The company was Austal Ltd. And what has happened to John Lehman, former chairman of the Superferry, and his investment firm? Did the Superferry bankruptcy cost him any money personally? Or were the only losers small investors, vendors, and the Superferry employees?

Surely someone on Maui knows some of these interesting economic facts.

Sally Raisbeck
Wailuku HI

Latest from the Coconut Wireless on this

Forwarded:

Navy Seeks Ferry Vessel for Pacific Operations

The U.S. Navy’s Military Sealift Command (MSC) has issued a Market Survey to ask about the cost and availability of U.S. ferry vessels. Anticipated delivery will occur on October 1, although the vessel owner may propose alternate delivery dates. The location of proposed usage will be Guam, Saipan, and adjacent Pacific Ocean waters. The time charter will be for 12 months, with the possibility for three additional year-long renewals.

The closing date for responding to the Market Survey is July 14, 2009.

For more information, contact Ms. Jessica Chu of MSC at 202-685-xxxx (phone) or Jessxxx.xxx@navy.mil.

PVA has a copy of the Navy’s full document with the Market Survey. For a copy, contact Ed Welch at PVA Headquarters at 1-800-807-xxxx ext. xx or ewxxxx@passengervessel.com

OK, here's a brainstorming idea for you ferry lovers

[Second Edition: Have made two paragraph additions at the bottom of this post.-Ed.]

Haven't fully evaluated this idea yet, but was just thinking about the 2 vessels that have been operated by TheBoat, the M/V Rachel Marie and the M/V Melissa Ann.

Why not us them for an interisland service, with DOT either taking over their lease or buying them from the City and County of Honolulu? Many states where ferries operate successfully, the State owns the ferries, like Alaska, Washington, and Texas to name a few.

The vessels used by TheBoat actually have many of the operational characteristics that could work logistically and financially for an interisland service, unlike the Alakai and Huakai who's scale, engines and capacity were inappropriate for the distances and market. Plus, most of the Chapter 343 EIS has already been done for TheBoat, maybe only a few slight changes would be needed on that.

Some would say the M/V Rachel Marie and M/V Melissa Ann might not be able to handle the channel conditions. To that I would say, worse case they just don't operate December through February. Maybe the State runs them only intra-island during the swell months. These two passenger only vessels otherwise fit all of the demands that Neighbor island critics have raised. Plus they can make the distance in a reasonable amount of time. They would allow the harbor improvements to continue to be used. You could charge at least $40 one-way per person and I believe fill the vessel most of the time and actually breakeven for the state. With only a 6 ft. draft the State might even use the old FAP routes.

More evaluation would need to be done to determine if this would truly be realistic, but just on the main constraints that caused HSF to fail, I think this would work.

Here's a video of TheBoat. The video gets good starting about about the 3:50 minute mark. Here are some pictures of TheBoat. TheBoat is just a little small, still would work well on some of the FAP routes to quieter destinations. 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 to compare to.

Hope Kallai added the following comment to this idea, "Awesome idea. Who owns them? City & County? Didn't they use Fed funds? The DEIS or whatever that prelim study was could be re-fashioned as a Programmatic EIS; then the whole project idea should really be put out to bid - with all the other ferry proposals given a chance to apply. After selection only a Supplemental (vessel-specific) EIS would need to be prepared."

Malta Co. orders ferry very similar to Alakai and Huakai

The Honolulu Advertiser said that HSF officers were talking with this Malta ferry company a few weeks ago after the SC decision. And yet HSF neither leased nor sold a vessel to them. The vessel selected is almost the exact same as the Alakai and Huakai. This implies that HSF has a better deal well along the way for the Alakai and Huakai than what is mentioned in this article.

The distance between Malta and Sicily falls right under the maximum distance (70 miles) and time (2 hours) of one-way transit with the same revenue generating load that makes this particular design and propulsion systems' fuel consumption commercially viable, in the current and recent petro-environment. But, I still like the name Maltese Falcon better.

From: http://www.timesofmalta.com/articles/view/20090407/local/virtu-orders-new-vessel

Tuesday, 7th April 2009 - 14:46 CET

"Virtu orders new €60m catamaran"

Virtu Ferries have signed a contract for the building of a new catamaran by Austal Ships Pty Ltd., of Western Australia.

The vessel will be one of the largest aluminium hull catamarans in Europe, the company said.

The new catamaran, an Austal Auto Express 107 will be named Jean de la Valette and will be delivered in August 2010. It will replace the Maria Dolores on the Malta-Sicily route.

Virtu Ferries said that the Austal 107 was chosen following a long and rigorous selection process; it was judged the best vessel for the route due to its versatility and all round efficiency, as well as being tailor-made for the route’s requirements, based on passenger feedback.

It will have a seating capacity for 800 passengers on two decks, with three catering outlets and a central shopping area. The passenger decks will offer a passenger-friendly seating density of two to three seats per row, as well as an upper deck lounge area overlooking the vessel’s bow. A central staircase will lead to a first class seating area featuring a separate catering facility and two VIP lounges. Outdoor seating will also be available for more than 110 passengers, in both economy and VIP lounges.

An additional new feature, particular to this vessel at the request of Virtu, is a dedicated lounge for commercial vehicle drivers providing a restful environment.

The vehicle deck will carry 230 cars or 45 cars and 342 truck lane metres equivalent to 23 trailers. This will enable Virtu Ferries to efficiently service the growing needs of private passengers with cars and campers, tour operators with coaches and commercial vehicles and trailers with accompanied cargo.

The vessel will be certified to carry dangerous cargo such as LPG, Diesel and Petrol in bulk.

Virtu Ferries managing director Henri Saliba said “The demand for cargo traffic between Malta and Sicily since we joined the EU has exceeded our expectations. This is a €60 million investment that will cater for the demands of the Maltese commercial, industrial and tourism sectors into the future and provide a scheduled year round service."

The vessel will be powered by 4 MTU 20V 8,000 M71L Diesel Engines at 9,100kW each driving Rolls-Royce KaMeWa propulsion water jets, giving an approximate speed of 39 knots. The latest sea-keeping technology, Austal Ride Control, will be installed for maximum passenger comfort in heavy weather conditions.

The vessel will be built in accordance with the requirements and under the survey of Det Norske Veritas, conforming to International Maritime Organisation HSC Code, and Malta Flag State and Italian Port State Regulations. Registration, as with all Virtu vessels, will be under the Malta Flag.

Virtu Ferries have been operating high speed ferries between Malta and Sicily since 1988.

The Jean de la Valette will have an overall length of 106.5 metres and a beam of 23.8 metres.

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

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.

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

"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'

Who's to Blame?

From Save Kahului Harbor: http://savekahuluiharbor.blogspot.com/2009/03/who-to-blame.html

Tuesday, March 17, 2009

Who to Blame?

Who got us into this mess? According to memos released to the Honolulu Advertiser under FOI, Hawai'i DOT was telling both Gov Lingle and the Superferry company they must do an EIS.

But then Gov. Lingle stepped in and directed DOT to find a way around environmental law.

That's when DOT came up with the poorly conceived, unworkable, expensive, Chinese-made barge. That barge cost us $38 million dollars of tax-payer money. I was in the room when the pilots told DOT administrators that it physically wouldn't work. But Lingle forced DOT to go ahead anyway, thinking this would circumvent the law.

Since them we've spent almost another $Million repairing the dock and paying for tugs to hold it still. Another half a million dollars is slated to be spent on another probably fruitless attempt to anchor the barge so it doesn't dash itself into Pier 2 during high surf conditions.

Meanwhile the Superferry has been operating at about 25% capacity -- only half of what they need to break even. Had they done the EIS, it would have shown these things:

1. The ship they chose was too big for the passenger loads reasonably expected
2. The ship they chose used too much fuel to be economical
3. The ship they chose was the wrong design to sail comfortably in the extreme conditions of our interisland channels.
4. They should have included onboard ramps (as their second ship has) so as not to need any barges thus saving us about $41,000,000 that Lingle has wasted.

But Superferry feared an EIS. We can only speculate that they were set on the current ship design for reasons that have little to do with their ferry business. Investigating the many tangled relationships, we find that the major shareholder, Lehman, is involved in ship building for the military and the Superferry was perhaps the "proof of design" prototype for a very lucrative Joint Highspeed Vessel contract the military was going to award.

So what got us into this mess? Lingle deliberately flouting the law to do favors for a very highly placed neocon, Lehman (slated to be McCain's chief of staff had McCain been elected) and a greedy company with ulterior motives not in the best interests of the people of Hawai'i.

Many supporters of the ferry are crying out against the Supreme Court decision, little realizing that because the EIS was not done, we got a plan that was doomed to failure. Too big, too fuel-hungry, wrong design for comfort. As we pointed out for the last 4 years - the business plan simply didn't add up to a profit.

The Court decision may have hastened the end of the Superferry but its days were numbered anyway.

Mayor Tavares of Maui said it the best:

Maui County Spokesperson Mahina Martin released this statement about the Supreme Court Decision.

"The ruling is not unexpected. If an Environmental Impact Statement was first done as required by laws that exist to protect our environment, then DOT and the Superferry owners would have been able to assess the impacts and take necessary steps years ago to address any concerns.

"Early compliance would have benefited both the environment and today's small businesses that utilize the Superferry. Having a variety of transportation options is important. It is equally important to follow laws meant to safeguard our communities."

Act 2 Loose Ends...EIS needs to be redone

I see the spinmeisters are trying to put the word out that the EIS could be completed in "2 to 3 months." Actually, that is an Act 2 pseudo-EIS (which no longer has any legal foundation) with limited focus and no more public involvement from here on out. On a Chapter 343 EIS the public has continued involvement even on the final draft and that can be challenged. Also, a real Chapter 343 EIS on this should not be prepared by the DOT. That is a conflict of interest.

Also, Lingle says when they started drafting Act 2 they were doing the legally correct thing. Wrong. Lingle says there are a lot of small businesses dependent upon HSF, then she should list them. There are only a handful of businesses, most are not small, and they have options and are not totally dependent upon HSF. Lingle also says HSF is lower cost than it's competitors. Wrong. The airlines are now lower cost than HSF and Young Brothers is lower cost than HSF at moving cargo. So that is wrong, wrong, and wrong on Lingle's points. One of the other people in an e-mail group on this says Lingle is in a "state of denial."

One last thing. I was misquoted in the following:

Brad Parsons, a Superferry critic who splits his time between Maui and Kaua'i, said the ruling gives him "a sense of great relief and inspiration, that the Supreme Court justices did the right thing, with good reason and well-thought-out logic. ... It's like a big weight off my shoulders that there is somebody at the state that did the right thing, finally."

The quote is correct until that last sentence. I never said that last sentence. I would not view it as a weight on my shoulders only, and in addition to the State Supreme Court Justices there were a few people in the Legislature who did try to do the right thing.

Aloha, Brad

P.S. In reply to Tim Dick's comments on his Use Half blog, questioning my carbon use, I last visited Maui for a couple of days in Sept. 2008, to attend the OTF committee hearing, prior to that I was last on Maui in May 2008. I haven't been back to Maui since. Personally, I view casual interisland travel as a waste of resources and money. Rather than "using half," I have cut that back to almost nothing, something that much of HSF's expected market appears to have also done in the past 6 months or more.

Report from a Superferry Traveler‏

From: Dick Mayer,

This is a copy of an email which [Mayer] received from a recent Superferry traveler:

"Here's a little anecdotal information on the ferry. I took my car to Oahu on HSF a few weeks ago just to check it out. I lost a day each way on the trip.

On the way to Oahu, we were delayed leaving Maui because there was no power to the hydraulics on the barge ramp. So, vehicles were unable to be unloaded or loaded for about 45 minutes. Can you imagine how ugly sitting in a ferry vehicle hold for 45 minutes would be? You know some of those folks had their engines running...

We arrived on Oahu pretty close to on time - so they took the north shore of Molokai route, and hauled ass. I got sick even though I'd taken one "Bonine". Fortunately, I made it to the washroom before getting sick, and the woman in the stall next to me was throwing up too. Fortunately also, I had no food or drink in my stomach. I felt awful for the better part of 24 hours after that trip and mostly slept.

On the way home I took 2 Bonines and passed out on the ferry - so I didn't get sick. (They were nice enough to have someone accompany me to my car so I could bring up a blanket. Otherwise, I'd never have slept BECAUSE IT WAS REALLY COLD.) After I got home I was essentially knocked out for the remainder of the day. The reason I was able to sleep during that trip is because the ferry was so empty, there was a free bench. (It was pretty empty on the way to Oahu as well, just no benches available.)

If you think you want to sleep without ruining your neck, you have to get there early enough to claim a bench. That means you'd spend LONGER waiting in line at the harbor than you would to arrive early at the airport. You can't just drive up and get on because the vehicles are coming off the dock and the traffic would be a problem. You've got to get there at least half an hour early and wait, just like you do at the airport...

I'd hate to be on it if it were crowded and the seas were rough. Last week someone told me of a trip she took with her kids and they and many others were throwing up IN THE AISLES! She said they come around with a shop vac to clean it up. To be fair, I hear it's a "lovely trip" when the weather is good.

As much as I enjoyed having my car on Oahu (and not paying the cost of a rental) I don't plan to make the trip by ferry again. In fact, I'm flying over next week for an appointment...

P.S. I counted the cars going over to Oahu - less than 50. There were somewhat more coming back to Maui, but the main vehicle deck wasn't by any means full on that trip - maybe 70? It seems that Loves Bakery and Fed Ex have contracts with HSF. Those trucks were on both trips, and there were benches reserved for their drivers who had lunches packed at home in coolers."

Update on SB989 and HB1171...and more

Last reported here, SB989 to extend the sunset date of Act 2 by a year was to be heard by the Hawaii Senate ENE and TIA committees. That was done on Feb. 19, 2009, and the measure was deferred (not acted upon). Believe written testimony helped on that. On Feb. 25th, the measure was re-referred to a combined Senate committee of ENE/TIA/JGO, meaning on a tight schedule nothing was happening on SB989 in the Senate.

Later that same day, Feb. 25th, the companion bill HB1171, was pulled out of the House TRN/EEP, FIN committees (by Speaker Say who has a close connection to HSF) that it had been referred to from the beginning of the session and re-referred the bill to only the FIN committee. TRN/EEP have chairs unsympathetic to the bill.

The hearings on HB1171 were held in the FIN committee on March 3rd and a committee decision was deferred and voted on March 4th, actually the morning of March 5th. The FIN hearing started at 10:00 am on the 4th and lasted until at least 5:00 am on Mar. 5th. The committee had to deal with a lot of bills, this one actually being one of the lesser important ones. After a long night the exhausted Reps passed HB1171 unanimously. There was good written testimony submitted for both the March 3rd and 4th/5th hearings.

Larry Geller has a good report on this all-nighter FIN committee hearing. Makes me think of the image of a sausage factory...sausage factory of laws. Also reminded me of college students cramming overnight because they got behind on their studies in hopes that they will actually retain something good out of the incident. It is amazing that Legislators actually make laws on extreme sleep deprivation. I got nothing against sleep deprivation, but making laws with it?

Anyway, apparently HB1171 can now go to the House floor for a vote and then pass over to the Senate for further consideration. My two letters of testimony on HB1171 are below.

One of the guys on Maui asked for some feedback on an article he is writing. Here was my feedback and it applies to Act 2, SB989, and HB1171, and the arbitrary standard of a "large capacity ferry vessel":

A couple of things I'll point out. After reading a proforma income statement that Dick did on public information from HSF, in the Fall of 2007, I looked at that same information and did some sensitivity analysis varying the number of people, and cars, and fuel price. The results of that were in a series of posts I did on HSF's expected Break Even Analysis. The most significant thing I found is that mainly depending upon the fuel price, HSF's breakeven point is at about half their capacity (for people and vehicles) or higher. But, and this is the key point, HSF needs to be running at half capacity every day, and if they are a true viable going concern, they cannot afford to be down for any more than about 2 weeks a year, if even that. So far they have not been able to do that. If they continue as they have been, they will always be an annual money loser, in the summer only have they made money. Even if they add a second vessel, they will still be a money loser based on the average of less than half capacity and too many down days. This assumes no government service contracts.

The second point is that the reason for the above is HSF's powerplant of 4 diesel engines onboard powering the 4 waterjets. The fuel that these 4 diesel engines burn are the key variable that give HSF less operational/financial flexibility (higher loads needed) to cover their daily costs. When I did the survey of all ferries in the United States that meet the "large capacity ferry vessel" definition, the vast majority of ferries in the U.S. utilize half the engine power or less of HSF. Half the engine power would also mean half the fuel, half the greenhouse gas emissions, slower speed and greater financial flexibility for a commercial ferry. As it stands, per passenger HSF at a minimum burns twice the fuel and puts out twice the emissions of an interisland passenger jet (per passenger). The difference is because of the excessive engine power.

One last point. Invariably HSF will continue to be unviable as I believe in the end even the state and federal government won't be able to pay indefinitely for it's discretionary services. If there is to be a viable interisland ferry service in Hawaii, it would have to be utilizing at least half the engine power of the Alakai, probably not carrying personal use cars, operate at slower speeds, and people would have to be satisfied with a 4+ hour ride rather than a 3 hour ride interisland. There is a reason statewide interisland ferries have been attempted and failed in Hawaii many times in the past (as with Seaflight, et.al.).

Believe the above is too much to properly evaluate for a lawmaker fighting back exhaustion and sleep deprivation, but here were my two letters on HB1171.

Testimony for FIN 3/4/2009 4:15:00 PM HB1171:

Honorable Committee Members:

"Sometimes ya just gotta know when to cut your losses."

Respectfully request no referral for HB 1171 out of committee, no arbitrary extension of Act 2, and no further action on HB 1171.

Do any of you really believe HSF is a viable interisland going concern? Just check out the average loads it's had for the past 6 months. They have been pathetic. At the same time Hawaiian, Go!, and Young Brothers have been doing good steady business over the past 6 months and beyond.

There will be other opportunities for viable interisland ferry service here in Hawaii, but HSF and Act 2 will not be what fosters it.

Respectfully request no referral, no vote out of committee for HB 1171.

Testimony for FIN 3/3/2009 6:00:00 PM HB1171:

Honorable Committee Members:

This proposal to extend the sunset date of Act 2 by a year is not entirely unexpected as it was mentioned in the final report of the Lingle-DOT controlled Oversight Taskforce Committee. But, why are not any of the other recommendations of the OTF Final Report included in this bill for which the Lingle Administration is again lobbying the Legislature?

Consistent with the 'closed class of one' nature of Act 2 and DOT's exclusive operating agreement with HSF, this measure changes the playing field in mid-course to benefit one company to the detriment of any other potential 'large capacity ferry vessel' company, just so DOT can have the convenience of more time to finish the Act 2 'EIS.' Contrary to DOT's testimony, this bill does NOT add to the public's time to comment on the Act 2 'EIS.'

The saga and tangled web that they weave continues to develop. Meanwhile the unfunded expenses of this total project are quickly approaching $10 million dollars overbudget, at the same time that Hawaii schoolkids are asked to do with less in the schools. By the way, where are the rest of the Lingle Administration's budget cut proposals that the Legislature asked of her more than a month ago?

HSF has actually already proven itself unviable and will continue to be so because the vessel's operational design is not properly matched to the distances and conditions between the Hawaiian Islands.

Enough is enough. The Legislature should stop assisting the Lingle Administration with this private concession boondoggle. The Lingle Administration has already been given everything they need for this project to succeed or not on it's own.

We call upon the Representatives to make a statement of righteousness and reject this unnecessary bill HB 1171. We respectfully request that you take no further action on HB 1171.

Aloha, Brad

Hawaii Superferry Joins Interisland Fare Wars

Howard Dicus has a good video report at:
http://kgmb9.com/main/index.php?option=com_content&task=view&id=14517&Itemid=40

From that:

HD: ...They're trying to put butts in seats.

SU: But at the same time, are they making any money?

HD: No. No, they're probably all losing money on their interisland service right now...

HD: I think all of them, including Superferry, are struggling a bit. It depends a lot on how much worse the recession gets...

I'll just add that this fare war is much more expensive to HSF in losses per passenger than for any of the airlines. Mokulele, though, appears to have shallow pockets, and will likely go down first. But, Mokulele has the most comfortable looking seats to put your butt into and not get motion sick. It's a toss-up as to whether Go! can last longer than HSF. The only strong player in this is Hawaiian. If you got money to burn, I'd recommend Mokulele for as long as they are around.

Aloha, Brad

Peter Rappa's of UH-Manoa comments on the Act 2 'EIS'

The following are Peter Rappa's comments on the Act 2 'EIS'. Peter Rappa is the Environmental Review Coordinator of the UH-Manoa Water Resources Research Center, Environmental Center:

February 23, 2009
RE: 0786

Brennon Morioka, Director
State Department of Transportation
869 Punchbowl Street, Room 509
Honolulu, HI 96813

Dear Mr. Morioka:

Draft Environmental Impact Statement
Statewide Large-Capacity Inter-Island Ferry
Honolulu, Wailuku, Lihue, and South Kohala

The Statewide Large-Capacity Inter-Island Ferry Draft Environmental Impact Statement (DEIS) evaluates harbor improvements proposed by the State of Hawaii Department of Transportation (DOT) to support a large-capacity ferry vessel company. The harbors affected by these actions are Honolulu Harbor (City and County of Honolulu), Kahului Harbor (County of Maui), Nawiliwili Harbor (County of Kauai), and Kawaihae Harbor (County of Hawaii). Significant probable direct, indirect, and cumulative impacts are discussed in the DEIS. Direct impacts include displaced cultural activities and visual impacts to Pu`ukohola Heiau. Indirect impacts are defined as those occurring as a result of a large-capacity ferry vessel company’s operations and include impacts to traffic, traditional cultural practices and the loss of natural resources and activities. Significant cumulative impacts may include takes of Humpback whales, traffic in the vicinity of all four harbors, dispersal of invasive species, and impacts upon traditional cultural practices within Kahului Harbor.

This review was conducted with the assistance of Curt Daehler, UHM Botany; Richard Mayer, Maui Community College; Marshall Mock, Kauai Community College; and Ryan Riddle, Environmental Center.

General Comments

The use of the term “Statewide Large-Capacity Inter-Island Ferry” throughout the document is not necessary except we surmise for legal purposes. It should be noted however, that throughout the document the large-capacity inter-island ferry is identified as the Hawaii Superferry or HSF. We see little reason to distinguish between the large-capacity inter-island ferry and the Hawaii Superferry or HSF. It would make for easier reading if the authors could just call the HSF the HSF.

The examination of alternatives is incomplete. According to Act 2 of the Second Special Session of 2007, the environmental impact statement process shall include evaluating alternatives (Section 9(b)(5)) and that those alternatives include “alternative locations for the proposed project, as appropriate” (Section 10(a)(5)(E)). Only the four harbors where the HSF is currently operating in or plan to operate in the near future are considered in the DEIS while three other harbors, Barbers Point, Hilo and Port Allen that the HSF could conceivably use are ignored. Granted the ferry may not be planning to ever use those harbors but the DEIS should not be limited to destinations that the Department of Transportation has permitted the ferry to use. In an emergency, the HSF may have to divert to other ports to land its passengers safely. Future large-capacity inter-island ferry companies may wish to use other commercial harbors in the State and the DOT should be obligated to review the use of these alternate locations.

In addition to our general comments we also have several specific comments.

Information to be Incorporated by Reference – Rapid Risk Assessment (p. 1-4)

Since the ferry’s inception, how often have the ferry’s services been cancelled due to high seas and maintenance? What are the maximum wave conditions that the vessel can operate under?

Comprehensive List of Potential Resources and Issues (pp. 1-7 – 1-15)

We disagree with the contention on page 1-8 that the impacts to surface water quality are not potentially significant. In the event of a catastrophic accident to the HSF, it may in fact leak a substantial amount of fuel. A spill of more than 10,000 gallons of fuel is considered a medium sized oil-spill that could have significant impacts on the water quality in the vicinity of the spill. The potential of a spill and the response to the spill should be discussed in the DEIS.

In regards to sidewalks (mentioned on page. 1-9), a listed concern is the lack of sidewalks at Kawaihae Harbor. The DEIS states that foot traffic from large-capacity ferry vessel passengers outside of the ferry terminal area is expected to be minimal. How many passengers does the DOT estimate will be pedestrians on the ferry and at what point will passenger levels warrant the construction of sidewalks?

The DEIS mentions on page 1-9 that underground utility corridors are being considered for new Kawaihae Harbor projects to reduce visual impacts to the national park and viewshed. While this issue is indeed a management issue for all of Kawaihae Harbor, we would like to see a more in-depth discussion on the scope of the electrical infrastructure needed for upcoming Kawaihae Harbor projects. Is the ferry’s landing at Kawaihae Harbor the catalyst for undergrounding the utilities there?

Kahului Harbor (p. 2-8)

The DEIS states that the barge and ramp system for Kahului is similar to that illustrated (Figure 2-5) for Honolulu. In what ways does it differ?

Action Alternative (pp. 2-8 – 2-12)

On pages 2-8 through 2-12 harbor improvements for each of the four harbors are described. While these improvements are discussed in detail, it is difficult to discern which of the actions are underway or finished and which will be initiated in the near future. Perhaps, a chart in this section would be helpful in distinguishing the sequence of each of the projects listed.

Ferry Routes (p. 2-12)

The DEIS states that Kauai service is expected to be operated as the afternoon/evening roundtrip voyage on alternate days with the second Honolulu and Kahului round trip voyage as listed in Table 2-2. The times for the service to Kauai are not listed in Table 2-2. Is there an estimate of the departure times for the Honolulu-Nawiliwili service once it is reinstated?

In regards to weekly frequency, the DEIS reads, “When both vessels are operating, round trip voyages between Oahu and Maui, Kauai, and Hawaii Island are planned on a schedule frequency ranging from 3 days per week to daily plus four additional voyages per week.” These estimations vary greatly – what factors would influence these decisions?

Ferry Vessel (p. 2-14)

In regard to bilge water the DEIS states, “any water that could be contaminated with petroleum products is contained within its own disposal system and is designed to flow into a 500-liter holding tank to be emptied periodically in Honolulu by a commercial vendor.” How often does HSF or DOT estimate the holding tank will be emptied? The size of the holding tank is approximately 132 gallons - is that large enough to hold bilge water spills?

Potable Water System (p. 2-15)

In Section 2.1.5.3 the DEIS states “Each HSF vessel has on board a 2,000 gallon potable water tank, refilled daily through a shore-side connection located at the pier.” On average, how many gallons of potable water are consumed per voyage?

Table 3-8: Distribution Status of Invasive Terrestrial and Freshwater Species of Concern by Island (p. 3-29)

With the exception of Bush beardgrass (Schizachyrium condensatum) all of the invasive species of concern mentioned have not established themselves on Kauai. As a result, perhaps procedures should be more stringent on Kauai in order to prevent establishment of these species of concern.

Cultures Resources (pp. 3-32-3-33)

In the fourth paragraph in the section on cultural resources, the Office of Environmental Quality Control (OEQC) is erroneously identified as being part of the Department of Health (DOH). The OEQC is advisory to the Governor and placed in the DOH for administrative purposes.

Population and Housing (p. 3-54)

In Section 3.6.1 the DEIS states, “Residents of neighbor islands often speak of Honolulu as a busy metropolis and contrast life on Oahu to their more rural lifestyle. While they can point to Honolulu’s population density and congested highways as an example to be avoided in local planning, the image of Hawaii as a single city and a rural hinterland on all other islands is misleading.” Did you mean “the image of Oahu as a single city . . .”?

Potential Impacts and Mitigation (pp. 4-1 – 4-129)

To what extent do current and proposed harbor improvements accommodate global sea-level rise predictions? While this is an issue primarily for the harbors’ long-range plans, this issue merits serious consideration in the DEIS.

Invasive Species (pp. 4-62 – 4-71)

On page 4-62 the DEIS states, “Large-capacity ferry operations would add to the existing risk of inter-island transport of invasive species.” This statement is entirely accurate. Unfortunately, these risks are difficult to quantify. Of primary concern is that this mode of inter-island transport - passengers with their vehicles - provides new opportunities for deliberate or inadvertent transport of invasive species. As might be expected in such a case, policies more stringent than those used for other modes of transport have been put into place by HSF. In principle, the guidelines set out in Executive Order 07-10 provide a reasonable strategy for minimizing risk.

In the current arrangement employees of HSF mainly carry out inspections. This arrangement creates a conflict of interest. In order to remain a viable business, HSF must strive to please its customers and maximize profits. In contrast, useful inspections generally displease customers. Customers are even more displeased if violations are recorded and actions are taken against them. It is in the interest of HSF to minimize such negative interactions with customers, rather than to run an effective biosecurity program. Therefore, a more effect system would use inspectors who are independent of HSF and who also have law enforcement authority. The Department of Land and Natural Resources (DLNR) has both the mission to protect the islands from invasive species becoming established and the police power to enforce state conservation laws. The task of conducting inspections might reasonably fall to DLNR, although they would probably require compensation in order to be involved.

Procedures that are in place to prevent the spread of pests on produce and agricultural products are unclear. Agricultural pests have the potential to cause major economic damage to crops. HSF employees are unlikely to detect these pests, including emerging pests (recent arrivals to the State), which are commonly found several times per year. The Department of Agriculture (DOA) has employees that have the expertise needed to spot pests on sight. Perhaps the DOA could administer this inspection.

Procedures for screening the interior of vehicles are not described. The interior of vehicles are likely to be a major mode of transport for the prohibited items outlined in Executive Order 07-10.

Agricultural Screening and Vehicle Inspection (p. 4-69)

Why are baggage inspections random? All passengers and baggage are inspected on airline flights and a maximum effort to intercept invasive plants and animals would require the inspection of all ferry baggage as well.

Archaeological and Historic Sites (p. 4-81)

On page 4-81 the DEIS states “No impact on archaeological and historic sites would occur from ferry related operations.” This may be true, but impacts on archeological and historic sites are likely to come from the passengers. These potential impacts as not discussed in the document.

Fiscal (pp. 4-93 – 4-95)

Numerous aspects of the State’s revenues and expenditures have been omitted from or misrepresented in the fiscal analysis in Section 4.2.6.2.3 and Appendix G. These extra expenses include: legislative operating costs; costs to operate the six month Oversight Task Force and the Rapid Risk Assessment; costs associated with the State auditor’s investigation and report; the Special Traffic Study (Kahului); as well as the additional cost (above $1.6 million) for the preparation of this DEIS. Other State expenditures include those associated with citizen’s court cases over the last four years, and the interest payments of approximately $2 million per year on the $40 million State issued general obligation reimbursable bonds (the ferry being asked to pay only the $40 million principal). Additionally, the DEIS fails to include the dollar amount of the land that the State purchased at Kahului Harbor (the Kahului Railroad location).

Many infrastructure expenditures are also omitted. These include costs associated with preparing Honolulu’s Pier 19 for future use; the new mooring system for Kahului Harbor; estimates of long-term costs pertaining to the maintenance of barges and harbor facilities; and the large potential costs of constructing a new ferry pier or docking facility on the West Breakwater at Kahului Harbor.

The State Revenue figures in Section 4.2.6.2.3 are derived from the more detailed estimates in Appendix G. On page G-56, footnotes 5, 6, and 7 are based on the ferry company’s “gross receipts”. Given the number of estimated passengers (p. 4-97) and vehicles (p. 4-98), $86 million seems to be a substantial overstatement.

A large portion of the expected net state revenues (supposedly $5 to $10 million per year) is derived from high visitor expenditures by ferry passengers. This is misleading since many of the passengers are residents who will be merely shifting their spending from one island to another, resulting in no increase in State revenues. As for mainland tourists who use the ferry, they would be using an airplane instead and would be spending roughly the same amounts on any island visited, again resulting in no increase in State revenues.

The fiscal impacts section needs to have a thorough discussion of the losses that the State would incur if no ferry uses the barges and the company does not make the expected repayments on the $40 million spent on harbor improvements.

Projected Impact of Ferry on Inter-Island Cargo, 2010 (p. 4-98)

Ignored in the revenue calculations is the loss of revenue due to ferry passengers taking their car instead of renting a vehicle? The State will lose $3 per day for each of the 3.8 days that the average passenger will spend on the other island. That is a loss to the State of $3*3.8 = $11.40 for each person who takes a vehicle instead of renting.

According to page 4-98, there will be about 206,000 vehicles shipped. At $11.40 per vehicle, that is $2.35 million dollars per year in lost rental-car State revenue. This is not an insignificant amount.

Harbor Uses, Including Recreational Users (pp. 4-100 – 4-106)

Given that State funds were provided for the harbor improvements, should any restrictions be placed upon their use by recreational users? Will the determination of potential recreational users be made on a case-by-case basis?

Table 5.11: State Revenues Associated with Ferry Operations (p. G-55)

Given that the ferry company cannot reach a “break-even” passenger load with its reduced fares, it cannot be assumed that the company will have a profit and that the State will receive any “Corporate Income Tax” payment as is assumed on page G-55.

Thank you for the opportunity to review this Draft EIS.

Sincerely,

Peter Rappa
Environmental Review Coordinator

cc: OEQC
Lesley Matsumoto, Belt Collins
Richard Mayer
et.al.