Weapons of Mass Destruction exercises set for Kauai next week

“Weapons of Mass Destruction”?  On Kaua’i?  The article below states that  “Field exercises will take place on Thursday around Nawiliwili Harbor as well as at the Pacific Missile Range Facility.”   Did they mean missiles and Superferries? Or are they just training to suppress protest?

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Updated at 1:46 p.m., Sunday, September 13, 2009

Weapons of Mass Destruction exercises set for Kauai next week

Advertiser Staff

The Kaua’i Civil Defense Agency will host the annual, week-long Weapons of Mass Destruction exercise in conjunction with the Hawai’i National Guard 93rd Civil Support Team.

The goal of the exercise is to ensure that Kaua’i’s first responders are prepared in the unlikely event of a terrorist attack on the Garden Isle, county officials said.

Among the county agencies that will be participating in the training are: the Kaua’i Fire Department; Kaua’i Police Department; Department of Public Works; and Department of Water.

Representatives of several state and federal agencies, along with private industry will also take part in the exercise.

Monday through Wednesday will entail classroom training. Field exercises will take place on Thursday around Nawiliwili Harbor as well as at the Pacific Missile Range Facility.

Officials are asking the public to stay away from these areas while the exercises are being conducted.

“We’re asking for the public’s cooperation by staying clear of these locations so there’s no interference with the training,” said Mark Marshall, administrator of the Kaua’i Civil Defense Agency.

He advised residents not to be alarmed if they notice a number of emergency vehicles along with National Guard troops moving about the island this week.

“When you see an emergency vehicle with flashing warning lights and sirens approaching, you should pull over to the side of the roadway in a safe manner and allow the first responder to pass,” said Marshall.

Source: http://www.honoluluadvertiser.com/article/20090913/BREAKING01/90913025/Weapons+of+Mass+Destruction+exercises+set+for+Kaua+i+next+week

Lingle still courting militarized Superferry and 'science cities' on Haleakala and Mauna Kea

At a talk on Maui, Governor Lingle said if she could she would bring back the Hawaii Superferry.   “Lingle said she’s been in recent contact with the ferries’ builder, Austal, which is considering military contracts for the high-speed vehicle transports.” Lingle also said she supports the development of “science cities” on Haleakala and Mauna Kea, both sites that are threatened by military space research.

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Updated at 7:51 a.m., Saturday, September 5, 2009

Downturn offers opportunity, Lingle says

By CHRIS HAMILTON
The Maui News

WAILEA, Maui – Gov. Linda Lingle told the Maui Native Hawaiian Chamber of Commerce on Friday that the economic downturn provided Hawaii with a chance to focus on alternative energy sources rather than continuing to rely on fossil fuels.

Her administration has and will continue to pursue new business opportunities in order to diversify the state’s tourism-based economy, she said in a wide-ranging discussion.

Lingle was the keynote speaker at the Grand Wailea Resort Hotel & Spa during the chamber’s third annual “Business Fest.” The Republican governor who is nearing the start of her last year in office also addressed topics from the Superferry; to looming deficits in county budgets; to the message given by economist Leroy Laney on Maui on Thursday that the recession is probably over.

Lingle said she agreed with Laney, who is an adviser to First Hawaiian Bank and professor at Hawaii Pacific University, saying the economic recovery will take time.

“Of course, we want it to be a quick recovery,” Lingle said to a mostly receptive crowd of about 150 people who twice gave her standing ovations. “But we have opportunities with this gradual recovery. It gives us time to decide what we are for as well as what we are against.

“Shame on us” if Hawaii emerges in the same position it was in prior to the recession, she said.

During the course of the past two years of economic decline, Lingle said, her administration has been able to set new priorities for Hawaii’s economy and Maui’s. She identified those as energy security and education, including retraining laid-off workers for “the new economy.”

Hawaii exports $7 billion a year, mostly to foreign nations, by importing 97 percent of its energy from fossil fuels, Lingle noted. Her vision would convert the state to 70 percent clean energy sources, such as solar, wave, biofuels and wind power, in just one generation, she said.

She predicted that the Native Hawaiian Chamber of Commerce will only continue to gain influence in the coming years as developers and entrepreneurs seek the group’s advice and endorsements. For instance, she said a massive public-private wind farm planned for Molokai will need the blessing of Native Hawaiian groups in order to create infrastructure, such as an underwater power line between Molokai and Oahu.

Lingle also said she supports the proposed advanced technology solar telescope at Science City on Haleakala and a similar telescope project on the Big Island, both of which combine to cost more than $2 billion to build but have encountered opposition from some Native Hawaiians who view the gigantic telescopes as eyesores encroaching on extremely significant spiritual places.

However, the Maui telescope alone will create 100 construction jobs and dozens of permanent staff drawn from the local population – who will receive more than $40 million worth of education, Lingle said.

“If you’re not for a project like this, than what are you for?” Lingle said.

Otherwise, Maui will continue to be stuck relying on tourism, with the same ups and downs, she said.

A few audience members could be seen quietly rolling their eyes at the apparent lecture from Lingle.

As she delivered a message encouraging positivity, the governor also managed to take a few jabs at the policies of her political opponents in the Legislature and local government. She called the legislature’s effort to raise the hotel tax rate counterproductive when occupancy rates are their lowest on record.

And she was also critical of Maui’s “show me the water” ordinance, which requires new developments to provide their own water sources. She lumped it with the county’s work force housing legislation, which requires developers to build affordable housing to accompany their luxury home projects.

The combined result has been a lack of new real estate investment in Maui, she said.

Proponents have said the ordinances are necessary so working families can afford to live on Maui.

It could take Maui longer to recover than the other islands, the former Maui County mayor said, since decades ago it positioned itself successfully as a high-end, exclusive island.

“I still feel that that was the right decision,” she said.

Lingle called on audience members to speak out in favor of issues they support rather than engage in opposition politics and lopsided protests.

The governor also took a few moments to address her ongoing and undecided battle with the public employees’ unions. She said if they had accepted her offer for weekly furloughs months ago, the employees wouldn’t be facing layoffs, now said to be in the thousands.

“We could have rectified this situation long ago,” Lingle said.

With the most recent state budget forecasts, the state is facing a nearly $1 billion shortfall. Maui County did not have to cut its budget significantly for the 2010 fiscal year.

However, Lingle said that since county property value appraisals often lag as long as 18 months behind state tax revenue forecasts and collections, she predicted that Maui County will have serious deficits soon, likely in the next two fiscal years.

Shortly after the speech, Maui County Managing Director Sheri Morrison said she agreed with Lingle’s dire predictions.

“She right,” Morrison said. “We will have to face up to those facts.”

During Lingle’s question-and-answer period, she was asked what she thought of Hawaii Superferry’s prospects. The interisland ferry left the islands and went bankrupt months ago after a judge ruled that Lingle and the Legislature hadn’t properly followed environmental law in pursuing the more than $350 million investment here.

Luncheon emcee Ron Vaught asked Lingle about the status of Superferry.

She said, “If I could, I would” bring it back. The two completed ferries now sit at a shipyard in Maryland. Lingle said she’s been in recent contact with the ferries’ builder, Austal, which is considering military contracts for the high-speed vehicle transports.

In the meantime, the state will “carry on” and work to complete the required environmental impact statement. Superferry was good for business, and the majority of people wanted it, she said.

Lingle called the lack of political leadership in support of Superferry “pathetic,” and said there were severe consequences as a result. The Alakai ferry was good for businesses that quickly embraced it as an affordable and fast way to ship goods between Maui and the state’s population center, Honolulu, she said.

Superferry critics, many of whom are Maui Democrats, said Lingle tried an end-run around environmental law by allowing the ferry to operate between Maui and Oahu without a completed EIS. The island risked potential cultural, traffic and environmental impacts because of the ferry system, they’ve said.

Lingle concluded the hourlong talk with a question about her political ambitions after she leaves office at the end of 2010. Lingle said she is too preoccupied with Hawaii’s current problems and has no plans now to run for another office.

“I just have to stay focused on what I’m doing now,” Lingle said.

Source: http://www.honoluluadvertiser.com/article/20090905/BREAKING01/90905010/Downturn+offers+opportunity++Lingle+says

Austal CEO reveals Hawaii Superferry was part of military contract strategy

Brad Parsons shared this interview with Austal CEO Bob Browning and some choice excerpts that affirm what anti-Superferry activists have said all along:

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy…

Bob Browning: It really was a conscious decision…

See the video of the interview here: http://www.finnewsnetwork.com/archives/finance_news_network12266.html

Austal (ASX:ASB) Annual Results

TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH AUSTAL LTD (ASX:ASB) CEO, BOB BROWNING

Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from ship-builder Austal Ltd (ASX:ASB), is CEO Bob Browning. Bob welcome to FNN. You’ve just released your full year results to June 30 with net profit down 82 per cent to $9.2 million on revenue of $500 million, can you explain the result?

Bob Browning: Sure, and it’s important to realise that the impact in our income statement was really some accounting treatments, non-cash write-downs. Our underlying business would have produced about $38.5 million this year which was ahead of analyst expectations but we had the Hawaii Super Ferry write-down and a derivative instrument that we put in place on a multi-ship program that has locked in a big upside for that program going forward from a commercial basis.

Clive Tompkins: Given the substantial hit you took to your bottom-line on the Hawaii Super Ferry contract, are you going to change the way you get paid for similar deals?

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy.

Clive Tompkins: Austal has built a global dominance producing and selling car and passenger fast ferries, but has also been producing a fair number of military vessels, where do you get the bulk of your work from these days?

Bob Browning: Right now it comes primarily from the commercial side of the industry in large catamaran ferries down to passenger ferries. If we fast forward upwards of two years I would expects about two thirds of our income from multi-ship U.S. Navy awards going forward.

Clive Tompkins: And is this a conscious decision, or have you just followed the work flow?

Bob Browning: It really was a conscious decision. We were actually prevented form operating or selling in the United States through some protectionist legislation called the Jones Act, and so the establishment of our facility in Mobile Alabama was designed to allow us to produce ships for that market. We then saw an opportunity with a vessel we produced for a customer in the Canary Islands that we thought an adaptation of that would fit the Navy’s Littoral Combat Ship program and were successful in winning that contract.

Clive Tompkins: The global financial crisis has seen a lot of companies back-peddling, how has Austal been affected?

Bob Browning: It clearly had an impact on our Australian operations with the commercial sales, while the pipeline was quite full, it was taking longer for customers to get the financing that they needed and get to the decision point to actually buy a vessel. So the first half of our fiscal year we had a real trough in the order book. We’re seeing that coming good now, we’ve had three large orders here in calendar year 2009, and clearly the strongest part of our business, the U.S. Navy business, coming forward will take a lot of that volatility out of our business.

Clive Tompkins: So how many months work do you have?

Bob Browning: In the Australian operations we have an order book that will take us out to 2011. In the Navy, because these are multi-ship programs, we’re going to be building vessels just for these two programs for the next eight or nine years.

Clive Tompkins: And what other metrics does a ship-builder monitor in terms of performance?

Bob Browning: If there’s one thing the ship-building industry has its metrics. We measure everything from our cost performance indices, how are we doing against the planned cost for the ship. Schedule performance indices, are we going to deliver the ship on time. Our EBIT margins obviously are very important, do we have the workforce lined up to handle the order book that’s in place, it’s a constant balancing act.

Clive Tompkins: What about margins, are they coming under pressure as government finances are being strained?

Bob Browning: Not so much because of government finances, in fact that’s actually been a more stable piece of our business. The margins of late have come under a bit of pressure because of the first-in-class Littoral Combat Ship that we built. It was a cost plus contract where we earned a fee, but as the cost of the vessel goes up the EBIT margins get squeezed a bit. That’s unique to that one vessel, the vessel’s we build going forward are on a fixed fee contract and are much more predictable in terms of the earnings.

Clive Tompkins: Turning to your work with the U.S. Navy, you’ve just received funding to purchase equipment another two Joint High Speed Vessels. Without actually receiving the contract to build at this stage, how significant is this?

Bob Browning: It’s very significant. It’s a 10 ship program, and so the Navy allowing us to go out and buy the water jets and diesel engines and reduction gears, the big equipment for vessels two and three, is a very clear signal they intend to award those contracts. And so when you add that program up with Littoral Combat Ship program we could be sitting here a year from now and we’ll have $1.5 billion of ships in the order book.

Clive Tompkins: And is this normal to be awarded funding in advance of receiving a contract?

Bob Browning: It’s somewhat unusual. The Navy saw an opportunity to save some money in the cost of this equipment by ordering a bit sooner, more importantly for us it’s a clear signal you know the Navy is not going to order this kind of equipment if they aren’t going to award the rest of the ship. And so we see it as a very significant event in terms of the surety of the next two vessels coming to us.

Clive Tompkins: And have you done work with other Navies?

Bob Browning: We have. We built 14 Armidale Class Patrol Boats for the Royal Australian Navy. We finished the delivery of the last of those vessels up last fiscal year. We have built patrol boats for the likes of Yemen and Kuwait. We are currently building coast guard vessels for the Maltese Coast Guard, and we’ll deliver six patrol boats to the Trinidad Navy as well later this year. So Austal is creating a global awareness in terms of patrol boats in the international market.

Clive Tompkins: And onto your competition. Who are your main competitors?

Bob Browning: Our competition depends upon the type of vessel we’re building, as you can imagine. With the U.S. Navy the only competitor we have there is with Littoral Combat Ship program in which Lockheed Martin is a team that’s building a very different style of vessel. While it’s a competitor we expect the Navy to split that contract and we’ll build probably 25 to 27 of our version of the LCS and Lockheed will build 25 to 27 of their version. When you get to commercial car passenger ferries probably our most significant competitor would be Damen out of the Scandinavian area and Incat in Tasmania actually. So it really varies depending on the whole form that we’re building.

Clive Tompkins: How difficult is it for other ship builders to enter your key markets?

Bob Browning: I think we’ve got a strong barrier to entry into our business, particularly in the United States, there’s no other builder of aluminium vessels in the U.S. of our size. We are the largest in terms of market share for large catamaran fast ferries in the world. And it’s a unique skill building with aluminium. We think it’s going to continue to be a strength for us because the operating costs on these vessels are far less, being a lighter material it takes less power to move them at the same speed.

Clive Tompkins: Last question. Bob where do you see Austral in 12 to 18 months?

Bob Browning: It will be a rapidly growing business. As I mentioned earlier we will have $1.5 billion worth of ships in the order book within a year. But that number is going to continue to grow because the Navy is accelerating their acquisition schedule, it appears to us, in vessels. And so that’s going to translate to a much more stable order book, and we believe the market then will be able to see out beyond 12 months which then translates hopefully to a re-rating of the stock. So we‘re feeling very, very good that this is a big inflection point for the company into the future.

Clive Tompkins: Bob Browning thanks for introducing Austal.

Bob Browning: My pleasure.

Source: http://www.finnewsnetwork.com/archives/finance_news_network12266.html

Superferry ships awarded to construction lender

Superferry ships awarded to construction lender

Remaining creditors will have to sue J.F. Lehman & Co. to recover any monies owed

By Bloomberg News

POSTED: 01:30 a.m. HST, Jul 02, 2009

Hawaii Superferry Inc. can abandon its ships to lenders owed $158.8 million for their construction, a federal judge ruled.

Bankruptcy Judge Peter Walsh’s decision yesterday means the vessels, relocated from Hawaii to a shipyard in Mobile, Ala., may be taken over by the federal agency that helped fund the ships’ construction.

“We’re not going to be returning back to the state of Hawaii now that the estate has abandoned the ships,” Leon Barson, a Hawaii Superferry attorney, told Walsh during a hearing in Wilmington, Del., where the Hawaii Superferry filed for bankruptcy on May 30.

Hawaii Superferry and its parent, HSF Holdings Inc., have only about $1.2 million in cash and a single ferry engine to use to pay creditors, company officials said in court. That means creditors may be forced to file lawsuits against the private-equity firm that controlled Hawaii Superferry to recover anything, creditor attorney Craig Wolfe told Walsh.

Hawaii Superferry is controlled by J.F. Lehman & Co., which was founded by former Secretary of the Navy John F. Lehman, said Alex Harman, a partner at the firm.

J.F. Lehman specializes in military and maritime markets, Harman said in court. The private-equity firm lost its entire $85 million investment in Hawaii Superferry, Harman said.

Walsh also ruled that the main part of the bankruptcy case will stay in Delaware. Only claims filed by the state of Hawaii related to its contract with the ferry company will be transferred to U.S. Bankruptcy Court in Honolulu, Walsh said.

The U.S. Department of Transportation’s Maritime Administration was owed more than $135.7 million by Hawaii Superferry because of loan guarantees it made to help build the ships. Agency officials said yesterday in court they may foreclose on the vessels.

The ships’ builder, Austal USA LLC, is owed $23 million. The vessels can each carry 866 passengers and 282 cars, according to court records.

Harman said that the company tried unsuccessfully to lease the ships to ferry operators in the Caribbean and Europe. The ships, which require about $20,000 a day to operate not including crew costs, may wind up being used by the U.S. military, Harman said.

The company has no plans to try to regain control of the ships, Harman told Walsh.

Hawaii Superferry was formed in 2002 to provide high-speed ferry service among Oahu, Maui, Hawaii and Kauai.

A law passed by the Hawaii Legislature on Oct. 31, 2007, was designed to allow the company to operate after a series of successful state court legal challenges, Hawaii Superferry said in a court filing.

Eventually that law was struck down by the Hawaii Supreme Court, which ruled that the law was intended specifically to benefit a particular company, in violation of the state constitution.

The company spent as much as $20 million fighting in court to keep the operation open, including the costs of keeping the ships ready and crews on the payroll while it waited for the state Supreme Court to rule, Harman said.

Hawaii Superferry Inc. can abandon its ships to lenders owed $158.8 million for their construction, a federal judge ruled.

Bankruptcy Judge Peter Walsh’s decision yesterday means the vessels, relocated from Hawaii to a shipyard in Mobile, Ala., may be taken over by the federal agency that helped fund the ships’ construction.

“We’re not going to be returning back to the state of Hawaii now that the estate has abandoned the ships,” Leon Barson, a Hawaii Superferry attorney, told Walsh during a hearing in Wilmington, Del., where the Hawaii Superferry filed for bankruptcy on May 30.

Hawaii Superferry and its parent, HSF Holdings Inc., have only about $1.2 million in cash and a single ferry engine to use to pay creditors, company officials said in court. That means creditors may be forced to file lawsuits against the private-equity firm that controlled Hawaii Superferry to recover anything, creditor attorney Craig Wolfe told Walsh.

Hawaii Superferry is controlled by J.F. Lehman & Co., which was founded by former Secretary of the Navy John F. Lehman, said Alex Harman, a partner at the firm.

J.F. Lehman specializes in military and maritime markets, Harman said in court. The private-equity firm lost its entire $85 million investment in Hawaii Superferry, Harman said.

Walsh also ruled that the main part of the bankruptcy case will stay in Delaware. Only claims filed by the state of Hawaii related to its contract with the ferry company will be transferred to U.S. Bankruptcy Court in Honolulu, Walsh said.

The U.S. Department of Transportation’s Maritime Administration was owed more than $135.7 million by Hawaii Superferry because of loan guarantees it made to help build the ships. Agency officials said yesterday in court they may foreclose on the vessels.

The ships’ builder, Austal USA LLC, is owed $23 million. The vessels can each carry 866 passengers and 282 cars, according to court records.

Harman said that the company tried unsuccessfully to lease the ships to ferry operators in the Caribbean and Europe. The ships, which require about $20,000 a day to operate not including crew costs, may wind up being used by the U.S. military, Harman said.

The company has no plans to try to regain control of the ships, Harman told Walsh.

Hawaii Superferry was formed in 2002 to provide high-speed ferry service among Oahu, Maui, Hawaii and Kauai.

A law passed by the Hawaii Legislature on Oct. 31, 2007, was designed to allow the company to operate after a series of successful state court legal challenges, Hawaii Superferry said in a court filing.

Eventually that law was struck down by the Hawaii Supreme Court, which ruled that the law was intended specifically to benefit a particular company, in violation of the state constitution.

The company spent as much as $20 million fighting in court to keep the operation open, including the costs of keeping the ships ready and crews on the payroll while it waited for the state Supreme Court to rule, Harman said.

Source: http://www.starbulletin.com/business/20090702_Superferry_ships_awarded_to_construction_lender.html

Superferry bankruptcy case to remain in Delaware

Updated at 1:36 p.m., Wednesday, July 1, 2009

Bulk of Superferry bankruptcy case will remain on Mainland, judge rules

Bloomberg News

WILMINGTON, Del. – A bankruptcy judge today ruled that Hawaii Superferry can abandon its two catamarans to lenders owed $158.8 million for their construction and that the bulk of the bankruptcy case will remain in Delaware.

The decision by U.S. Bankruptcy Judge Peter Walsh means the vessels, relocated from Hawaii to a shipyard in Mobile, Ala., may be taken over by the federal agency that helped fund the ships’ construction.

“We’re not going to be returning back to the state of Hawaii now that the estate has abandoned the ships,” company attorney Leon Barson told Walsh today during a hearing in Wilmington, Del., where Hawaii Superferry filed for bankruptcy on May 30.

Walsh also ruled that the main part of the bankruptcy case would stay in Delaware. Only claims filed by the state of Hawaii related to its contract with Superferry will be transferred to the federal bankruptcy court in Hawaii, Walsh said.

The state said in its change-of-venue motion that Hawaii Superferry has no connection with Delaware aside from being incorporated there. All of the operations were in Hawaii, the state said.

Having the case nearly 5,000 thousand miles and six time zones away makes it difficult to protect the state’s interest in regulating the use of Hawaii’s waters and ports, the state’s papers said.

Hawaii Superferry had support from creditors in opposing moving the case to Honolulu.

Hawaii Superferry Inc. pointed out that more than half the unsecured creditors aren’t in Hawaii while the largest secured creditor, Guggenheim Corporate Funding LLC, wanted the case to remain in Delaware.

The Maritime Administration of the U.S. Department of Transportation also wanted the case to stay where it is, and so did the official creditors’ committee.

The committee, with one of its three members from Hawaii, pointed out that the company isn’t operating in the state and that the two catamarans aren’t there either.

Honolulu-based Hawaii Superferry was shut down in March by a decision from the Hawaii Supreme Court. The company was operating one ferry since August 2007. The second was delivered in April.

The company said in its Chapter 11 petition that its assets and debt both exceed $100 million. Debt includes $136 million in first-mortgage bonds secured by the ferries. Another $23 million in second-priority ship mortgages are owing to shipbuilder Austal Ships. Guggenheim is owed $51.7 million on notes where the company says there is a $7.5 million fund for paying interest.

Source: http://www.honoluluadvertiser.com/article/20090701/BREAKING01/90701023/Bulk+of+Superferry+bankruptcy+case+will+remain+on+Mainland++judge+rules

Navy Seeks Ferry Vessel for Pacific Operations

Brad Parsons posted this interesting information on his Hawaii Superferry blog.  It shows that the Navy is shopping for ferry vessels to charter for use in Guam and the Northern Marianas.

http://hisuperferry.blogspot.com/2009/06/latest-from-coconut-wireless-on-this.html

Monday, June 29, 2009

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

Maritime Administration to repossess Hawai'i Superferry

Government to repossess Hawaii Superferry boats built at Austal

Wednesday, June 24, 2009
By KAIJA WILKINSON
Business Reporter

The U.S. Maritime Administration says that it plans to repossess and sell a pair of fast ferries built at Austal USA for Hawaii Superferry Inc.

Hawaii Superferry owes $136.8 million to the agency – commonly known as MARAD – which guaranteed the loans used to buy the ferries. It has another $22.9 million outstanding on a pair of loans from Austal.

MARAD reported this week that it plans to take possession of the ferries, now docked at Atlantic Marine in Mobile, as soon as it receives approval from bankruptcy court in Delaware. Hawaii Superferry Inc. filed for Chapter 11 reorganization in that state May 30.

The ferry vessels were purchased in 2004 for a combined price of $190 million, according to Austal, which now puts their value at about $87 million each, or $174 million together.

Austal Ltd., the Australian parent company of the Mobile shipyard, said Tuesday that it is writing off about $11 million, after taxes, for the 2008-09 fiscal year related to its ferry loans.

Talks among MARAD, Austal and Hawaii Superferry broke down last week, Austal officials said.

Maritime analysts had expected the ferry vessels to be retrofitted by Austal and chartered directly to the military. Jay Korman of The Avascent Group, a Washington, D.C., consulting firm that tracks defense programs, said Tuesday that MARAD is opting to sell the vessels rather than charter them directly, in order to recoup at least some of the costs for taxpayers.

Austal Ltd. President Bob Browning said he was disappointed that MARAD decided to seize the ferries without involving Austal in a project to prepare them for military use.

MARAD made the ferry loans under its Title XI program, which is supposed to support U.S. shipyards by reducing their reliance on military work.

Browning said that Austal approved lending $23 million to the ferry venture in part because the deal would help raise the profile of Austal’s U.S. shipyard, which at the time had been operating in Mobile for only a few years. Although it succeeded in doing that – the Mobile shipyard in November won a potential $1.6 billion contract to build up to 10 high-speed fast ferries for the military – Browning said the company’s lending days are over.

When launched in 2007, the Hawaii Superferry venture was hailed as ushering in a new era of inter-island transportation in Hawaii. The first ferry vessel was in service for about a year despite fierce environmental protests and low occupancy.

The Hawaii Supreme Court in March overturned a ruling that had allowed the ferry to function pending an environmental impact study. Hawaii Superferry Inc. ceased operations a short time later.

The company, whose primary investor is former Naval Secretary John Lehman, said subsequently that it planned to charter one or both of the ferries to a military or commercial client.

Source: http://www.al.com/news/press-register/metro.ssf?/base/news/124583492475240.xml&coll=3

More on Superferry bankruptcy

Posted on: Sunday, May 31, 2009

Hawaii Superferry files for bankruptcy

Company claims it’s unable to operate here, lists debts as much as $100 million

By Derrick DePledge
Advertiser Government Writer

Hawaii Superferry filed for bankruptcy protection yesterday, telling a Delaware court that a Hawai’i Supreme Court ruling caused the Alakai to cease operations in March and has sapped the company’s revenues.

Superferry and its parent company, HSF Holding Inc., filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware. Superferry listed between $1 million and $10 million in assets and $50 million to $100 million in debts.

Superferry has just $1 million in cash and was facing a $2.9 million principal and interest payment on one of the ferry construction loans yesterday. The company listed fewer than 50 creditors, including the state of Hawai’i, and maintained it should not have to make payments on $40 million worth of state harbor improvements because the operating agreement with the state was voided by a Maui court.

Superferry told the bankruptcy court that it plans to liquidate assets and “wind up their business.” While sources close to Superferry say it is possible for a “white knight” investor to show interest in the Alakai and a sister catamaran, the Huakai, it would likely be for charter operations and not an immediate return to passenger, cargo and vehicle service in Hawai’i.

The two catamarans are docked in a Mobile, Ala., shipyard owned by J.F. Lehman & Co., the project’s main investor.

“As a direct result of the Hawai’i Supreme Court decision last March, Hawaii Superferry had to shut down operations. There has been no relief from that decision,” Superferry said in a statement. “With no ability to operate, the company has had no revenues, only ongoing expenses to maintain the vessels Alakai and Huakai, our second ship.

“Our recent objective was to charter the ships outside of Hawai’i, which would keep Hawaii Superferry operating at some capacity. Although there are potential charter opportunities around the world, they take time and haven’t materialized in time for the company to meet its required financial obligations. Our efforts to refinance and restructure the company for this interim period with additional investment have not been successful, as yet. Accordingly, a filing of Chapter 11 was an unavoidable next step.”

Rough going

The bankruptcy filing could mark an end to Superferry’s stormy history in Hawai’i.

While the state Supreme Court ruling in March was cited as the final blow, the company’s court filing shows that several factors undermined the ambitious plans for high-speed catamarans to connect the Islands.

Just as Superferry was planning its debut in August 2007, the state Supreme Court ruled that the Lingle administration was in error when it exempted the state harbor improvements for the project from environmental review.

Environmentalists, who had challenged the exemption, moved to block ferry service through a Maui court while protesters halted the catamaran on Kaua’i.

The state Legislature in a special session passed a law, signed by Gov. Linda Lingle, that allowed Superferry to operate while an environmental review was completed. But barge problems on Maui delayed the ferry’s immediate return to service.

Superferry argues that the court rulings and delay eroded public confidence in its reliability. Damage to the Alakai in dry dock in February 2008 led to another suspension of service.

Superferry maintains that it demonstrated “outstanding reliability,” with service between Honolulu and Maui between April 2008 and the second Supreme Court ruling in March. The court found that the law which allowed Superferry to operate during the environmental review was an unconstitutional special law written for a single company.

“However, by then, the damage to the debtors’ reputation had already been inflicted,” according to the filing.

Superferry also cited challenging economic conditions last year and in the first quarter of this year that led to lower-than-expected revenues. The recession reduced demand for ferry service among both tourists and local residents.

In addition, Superferry cited an “unprecedented spike” in fuel prices last summer that significantly raised operating expenses. The company said it could not pass the higher fuel prices on to customers because it was competing with airlines for interisland fares.

State caught short

Mike Formby, the deputy director of the state Department of Transportation’s harbors’ division, said he was disappointed to hear Superferry is liquidating assets and going out of business. The state is in the process of comp

Hawaii Superferry files for Bankruptcy

The Hawaii Superferry is not coming back to Hawai’i.  Now it will be interesting to see who buys the two high speed ferries.    This is a David vs. Goliath story of communities resisting powerful corporate, military and political forces and with the help of an honest court, winning!   See this article by Jerry Mander and Koohan Paik for more on the military ties to the Superferry and the heroic struggle to stop it.

Hawaii Superferry Files for Bankruptcy Protection

(Update1)

By Bob Van Voris

May 30 (Bloomberg) — Hawaii Superferry Inc., which provided high-speed ferry service for cars and passengers between Hawaii’s Oahu and Maui islands, filed for bankruptcy protection today.

Hawaii Superferry and parent HSF Holding Inc. filed Chapter 11 bankruptcy petitions in Wilmington, Delaware. They cited a Hawaii Supreme Court ruling in March that struck down a state law permitting the company to operate before completing an environmental impact statement.

Tom Fargo, Hawaii Superferry’s president and chief executive officer, said in a statement at the time that completing an environmental impact statement could take a year. As a result of the decision, ferry service was immediately shut down and the company’s two high-speed ferries docked in Mobile, Alabama.

The company, which reported more than $100 million in assets and debts in its bankruptcy petition, said it will use the bankruptcy to close its business completely and liquidate the operation.

Hawaii Superferry was formed in 2002 to provide high-speed ferry service among the four main Hawaiian islands of Oahu, Maui, Hawaii and Kauai. The company began carrying passengers in August 2007 on the Alakai, an aluminum-hulled catamaran that carried as many as 866 people and 282 cars, according to court papers in the bankruptcy case.

Decline in Tourism

The law struck down by the Hawaii Supreme Court was enacted in November 2007 to permit the ferry to keep operating despite a series of successful state court legal challenges, Hawaii Superferry said in a court filing. The high court ruled that the law was intended specifically to benefit the company, in violation of the state constitution.

In addition to the court decision, Hawaii Superferry said its business was hurt by a decline in tourism, a 2008 increase in fuel prices and a price war between airlines that provided inter-island service in Hawaii.

The case is: In re HSF Holding Inc., No. 09-11901, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aG5jmmubowI0&refer=home

Landlord sues Superferry over rent

Looks like the Hawai’i Superferry skipped town without paying rent for its harbor facilities.   Their landlord is suing them. Brad Parsons, a blogger who has closely tracked and analyzed the Superferry fiasco had this to write:

Saturday, April 25, 2009

They’re not comin’ back?

Well, this is interesting. The first shoe drops. How about the other shoe? Of more interest will be what happens to the monthly payments due to DOT, the explanation for that, and what DOT does about that relative to the Harbors Operating Agreement beyond the fact that with the Court’s reversal at a minimum the Kahului Harbor portion of the Harbors Operating Agreement should now be considered voided until the Chap. 343 EIS is done. And again this begs the question for new scoping meetings for the Chap. 343 EIS. If not this kind of vessel, then what kind?

Here’s the Honolulu Advertiser article:
http://www.honoluluadvertiser.com/article/20090424/BREAKING01/90424078/-1/RSS01?source=rss_breaking

Updated at 9:03 p.m., Friday, April 24, 2009

Landlord sues Superferry over rent

Advertiser Staff

Waterfront Partners sued Hawaii Superferry in Circuit Court today, alleging that Superferry has failed to pay $51,310 in rent on its leased headquarters at One Waterfront Plaza.

The landlord alleges Superferry stopped making lease payments on March 20, the day after Superferry ceased operations in Hawai’i because of a state Supreme Court ruling. Superferry officials are looking for lease options for the Alakai and a second catamaran but have not ruled out returning to the Islands.

The Supreme Court ruled that a law allowing Superferry to operate while the state prepares an environmental impact statement was unconstitutional.

In the complaint filed with the court yesterday, the landlord accuses Superferry of breach of contract and unjust enrichment. The suit alleges Superferry leased the office space through July 2013.

Superferry officials could not be reached for comment.

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