Monday, January 21, 2008


Large capacity passenger vessel on welfare?

by Larry Geller

I seem to be in a letter-snatching mood this morning.

Here's a snippet of a letter written by W.D. Woodward in this morning's Star-Bulletin:

Harbor fixes for ferry would be a waste
The former director of the Hawaii state Department of Transportation, E. Alvey Wright, wrote a letter Jan. 14 that only a bureaucrat could.

Wright's irresponsible call for millions of tax dollars to be spent building and maintaining ferry terminals in three counties reflects the thinking of someone who understands government power but not market economics. Even at heavily discounted rates, the ferry is sailing below break-even capacity. It will not be long before the ferry goes bust, leaving us stuck with $40 million worth of barges.

Wright's proposal would throw good money after bad. We should be thinking about an alternative use for the barges. Perhaps one could be a place of retirement for Linda Lingle.

My understanding is that the state has a third mortgage on the Superferry in the event that harbor fees and expenses aren't paid. But fat chance that a third mortgage would ever be paid (the prior mortgage holders have priority). So indeed, the state could end up in the hole if the ferry goes bust.

So should we put even more money into improvements designed for a venture that is running below expectations and might fail?

I don't know the answer to this. If a "large capacity passenger ferry," of which the Superferry is an example, were a municipal or state ferry that had passed all its environmental requirements, it might be different. But it's a private venture, making profit using public facilities. I hope the Legislature will take a look at expenditures in a critical way, as this letter writer does.

Is the state footing daily expenses for ferry operation?

Do you know that whenever the tug boat pushes the barge around or otherwise assists the ferry, we pay for it? That's my understanding. I think the taxpayer cost would surprise us all. Someone should ask for those numbers and make them public.

In an email, activist Greg  Kaufman estimated that at $1,000-$2,000 an hour for tugboat service (a Dept. of Transportation number), the state might be spending up to $6,000 each ferry trip when there is a swell. The tug first stands by, then assists the ferry, then holds it against the dock, etc. State money, private profit.

In effect, we're subsidizing that private company. It's corporate welfare. [Yet you can bet the governor will withhold money from  social services at the end of the session, claiming we can't afford to spend diminishing tax revenues.]

Perhaps some concerned legislator could ask for an accounting of public funds spent on the ferry so far. It's only fair to know the truth.

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a third mortgage is similar to the third-party out of state check that was written seven months ago. looks nice in print.

I'm not sure where the info on the "third mortgage" comes from Larry but if true does that nmake the sate and owner of the HSf?
Andy Parx

I wrote about the state's third mortgage on the Superferry back in November -- check out the article.

No, I don't think the state would become the owner, because there are two other mortgages ahead of them. But I'm not an attorney.I suppose if the ferry company didn't pay its fees, they could seize the ship, but would they do that?

It's a pretty esoteric area of the law I know nothing about.

You know I was thinking recently about the term "large capacity passenger ferry." That term is interesting because it was coined by the Attorney General back in October 2007. It seems to me that that term and the EIS for it could be used for military application of a JHSV built by Austal or Incat after HSF has failed. It seems to me that language was planned with that possibility in mind.

Airlines are private for profit companies using state owned and built facilities. Do they need permission every time a new flight into Maui comes?

WE are the owner of private cars driving on state owned and built roads...

Get a life...

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