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In his April 6/09 discussion of the FY 2010 budget, Secretary of Defense Robert M. Gates said that the US military wanted to charter another 2 “JHSV-like” fast catamaran ships from 2009-2011, until the JHSV ships begin arriving. That meant JHSV-winner Austal would find its products competing once more with Incat, which has had 4 of its wave-piercing catamarans chartered by various American services. Their Swift wave-piercing catamaran is currently chartered by the Navy as HSV-2, just as the Austal-built Westpac Express is chartered by US Military Sealift Command for the Marines.
One obvious stopgap option is the Hawaiian Superferry catamarans, a larger pair of Austal-built ships that resemble the Westpac Express. They were even pressed into service when Haiti’s disaster struck, and now the US Navy has bought them outright.
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May 8/12: The US Navy re-names the Hawaiian Superferries, which will becomes USNS Guam and USNS Puerto Rico.
They do not say, but it’s likely that the larger Huakai, tabbed to replace the Westpac Express and move Marines to and from Okinawa and Guam (vid. Dec. 19/11 entry), is the future USNS Guam. The smaller Alakai was being considered for missions in Latin America and/or Africa, so it’s likely that she’ll become USNS Puerto Rico. US DoD.
Jan 29/12: Navy Transfer. MarineLog reports that US MARAD has now transferred the Huakai and Alakai to the U.S. Navy, in return for a $35 million funding transfer from the Navy to MARAD. As noted below, required modifications are expected to cost another $35 million. The vessels are currently docked at Lamberts Point in Norfolk, VA. With respect to financial details MarineLog explains the history:
“Back in October 2005 we reported shipbuilder Austal USA as saying that the order for the pair had become unconditional following Maritime Administration approval of a $139,731,000 Title XI loan guarantee, or approximately 78.5 percent of a total shipbuilding project cost of $178 million. That allowed the signing of a $210 million financial closing agreement. That works out at a ship price of $105 million a copy (at 2005 prices), which compares with the $151.8 million to $185.4 million a copy the Navy is paying for the seven JHSV’s [sic] on order at Austal USA.”
That’s why the US Maritime Administration took possession of the 2 ships: Hawaii Superferry, Inc., had defaulted on the guaranteed loans. See also March 30/09 entry for more information on the bankruptcy’s aftermath.
Jan 20/12: Inside the Navy reports that the cost for the 2 Hawaii Superferries, plus required modifications, is actually $70 million. This is based on a Nov 17/11 proposal signed by US Assistant Secretary of Defense for Legislative Affairs Elizabeth King. The JSCV is similar to the Westpac Express ship currently in use, but when moving 880 Marines:
“…a JHSV is a multimission capable vessel that would require major modifications since they are not designed for maximum passenger seating… In addition, modifying JHSVs will degrade some of the military capability of the ship.”
Dec 19/11: The Defense Authorization Act of 2012, which will soon become law, looks set to settle this issue, and send both Superferries to US MSC alongside the future JHSV vessels:
“SEC. 1026. TRANSFER OF CERTAIN HIGH-SPEED FERRIES TO THE NAVY.
(a) TRANSFER FROM MARAD AUTHORIZED.–The Secretary of the Navy may, subject to appropriations, from funds available for the Department of Defense for fiscal year 2012, provide to the Maritime Administration of the Department of Transportation an amount not to exceed $35,000,000 for the transfer by the Maritime Administration to the Department of the Navy of jurisdiction and control over… M/V HUAKAI… [and]… M/V ALAKAI… [to be] administered as a Department of Defense sealift vessel…”
Queries to MSCFE reveal that the larger Huakai ferry will replace the HSV Westpac Express, supporting CG III Marine Expeditionary Force between Okinawa, mainland Japan and Korea, with occasional runs to the Philippines and Thailand. That won’t happen immediately, however, because MV Huakai “will need significant mods before she can support III MEF mission.” The Huakai is expected to have longer range than Westpac Express’ 1,200nm maximum, and they expect her to be ready before October 2012.
The Marines have been very happy with the Westpac Express since 2002, but her existing charter contract ended in September 2011. Under the circumstances, a final 1-year charter seems likely as a way to bridge the gap to Huakai – and on Dec 21/11, US MSC issued that charter.
The mission for the smaller ship, MV Alakai, is said to still be under review. Both the Caribbean/Latin America (SOUTHCOM) and AFRICOM are seen as strong possibilities. MarineLog | Colton Maritime Memos [no permalink].
Aug 1/11: Honolulu’s Star-Advertiser reports that:
“The U.S. Department of Transportation’s Maritime Administration said Monday it received four bids to buy the two ships, the 321-foot Alakai and 338-foot Huakai. But the agency said it cannot identify the bidders nor say when it might complete its review of the bids. “We are at the very beginning of this process,”?said Kim Riddle, an agency spokeswoman. The Maritime Administration solicited bids for the ships in early June. A deadline for bidding was July 20.”
The secrecy means that it’s not known if the US military is a bidder. There have been unconfirmed reports that the military is only interested in 1 of the 2 ships.
Oct 10/10: The US Maritime Administration (MARAD) buys the 2 ferries for $25 million each at a US District Court auction in Norfolk, VA. MARAD was able to use its owed debts to cover the bid cost, and will now look to sell the ferries. The US Navy has expressed interest in buying them. Maritime Matters | Alabama Press-Register | Honolulu Star-Advertiser | KITV Honolulu | Virginia Pilot | Gannett’s Navy Times.
May 2010: The federal government sues to get title to the 2 vessels, in order to recoup its $150 million loan guarantees. The suit leads to the October 2010 auction.
Feb 11/10: The former Hawaii superferries Huakai and Alakai are pressed into service by the USA’s Maritime Administration (MARAD), in the wake of the disaster in Haiti. The ships are managed by Hornblower Marine Services (HMS), and the deployment is seen as an earl concept test of the similar JHSV design’s operations. Haiti’s lack of port infrastructure has not, to date, been a major problem for these ships. Maritime Executive magazine.
March 30/09: Hawaii Superferry files for Chapter 11 bankruptcy, as it reportedly has just $1 million in cash, and is facing a $2.9 million principal and interest payment on one of the ferry construction loans. MarineLog’s “Hawaii Superferry files for Chapter 11” explains the situation, and details the firm’s various creditors.
* The US Maritime Administration (MARAD) is owed more than $135.7 million because of 2 loan guarantees under the Title XI program
* Shipbuilder Austal USA is owed $22.9 million, as a 2nd mortgage, on construction fees
* The state of Hawaii, which provided $40 million in harbor improvements, held the 3rd mortgage.
* Superferry is also in default to Guggenheim Funding LLC for $51.7 million, related to a secured note in August 2007.
* J.F. Lehman & Co., the controlling private investor in the project, put up $85.2 million of the $92.9 million issued in preferred stock. The firm was founded by former Secretary of the Navy John F. Lehman, and seems set to lose its entire investment.
Unsecured creditors listed in the bankruptcy petition are headed by:
* The Harbors Division of State of Hawaii: disputed claim for $731,080
* MTU: $544,653 for engine maintenance related services
* Hornblower Marine Services: $113,685 for management fees and services
* Austal USA: $78,198 for travel and labor for professional services
See also: Journal of Commerce.
March 16/09: The Hawaiian Superferry service is shut down, after a Hawaiian Supreme court court decision strikes down a 2007 law that allowed them to operate. The ruling effectively mandates even more environmental reviews for the service, and forces the ferries to stop operating in the mean time. Alakai had been operating between Oahu and Maui. AP.
Additional Readings
* DID – The USA’s JHSV Fast Catamaran Ships. More militarized cousins of the Superferries, built by the same firm.
* Maritime Professional (August 2010) – Waiting for that Ship to Come In. Joseph Keefe takes a sharp look at the Hawaii Superferry saga.
