Ship of Fools

Ship of fools

Some Hawai’i residents tell Superferry officials to shape up or ship out

J.M. Buck
Jul 26, 2006

July 2001: Timothy Dick, an electrical engineer, founds Hawaii Superferry after seeing large, high-speed roll-on/roll-off catamaran ferries operating between Barcelona, Spain and the island of Mallorca in the Mediterranean Sea.

June 2003: A new ferry terminal opens at Honolulu’s Pier 19. Built with federal funds, the facility is anticipated to serve as the Superferry’s operational hub.

June 2004: Hawaii Superferry, Inc. (HSF) submits its application for a Certificate of Public Convenience and Necessity to the Hawai’i Public Utilities Commission (PUC) to operate as a ‘roll-on/roll-off fast passenger ferry’ that can carry 866 passenger and 282 cars between the Hawaiian Islands. Two double-hulled, multi-level catamarans the size of football fields will travel from O’ahu to Maui, Kaua’i and the Big Island at speeds of up to 35 knots.

March 2005: John F. Lehman, former secretary of the Navy and member of the 9/11 Commission, announces his intention to invest an initial $58 million equity capital in HSF through his private equity firm J.F. Lehman & Co. The firm primarily invests in marine and aerospace defense projects.

December 2005: Lehman is named as chairman of the Superferry’s board of directors. To date, Lehman has sunk $71 million into the HSF project, making him HSF’s largest private investor. Five of the 11 directors on the board have ties with JF Lehman and Co.

Another director, chief executive officer of Maui Land & Pineapple Co. David Cole, is also a Superferry investor through Grove Farm, Inc., of which he is a director. Warren H. Haruki, another HSF board member, is president and CRO of Grove Farm and the affiliated Lihue Land Co.

In addition, the federal Maritime Administration (MarAd) has provided a guaranteed $139.7 million Title XI federal loan, and the state of Hawai’i has also kicked in a $20 million loan for statewide harbor improvements, with an additional $20 million waiting in the wings.

A shroud of secrecy

Attorney Isaac Hall illustrates the negative impacts the loss of 23 percent of Young Bros. dock space will have on Kahului Harbor and small businesses statewide. BELOW: HSF touts movement of the Stryker Brigade between Oahu and the Big Island as one of its selling points.

HSF’s silence-until recently, thanks to a legislative ultimatum-has sent a common chord of frustration resonating amongst many residents on the four islands to be affected by the Superferry. With Sen. Shan Tsutsui and Sen. Gary Hooser leading the charge, lawmakers required that HSF and the state Department of Transportation (DOT) conduct three community meetings on Kaua’i, O’ahu, Maui and the Big Island before the final $20 million is released. The meetings are to take place over the next nine months.

Superferry and DOT officials were exposed to a firestorm of hostility from Hawai’i residents last month at a meeting in Maui, with heated accusations of deception and outright lying. One instance where the public feels they have been deceived is HSF’s touting of the Superferry as being a more economical way of traveling between the Islands. In HSF’s application to the Public Utilities Commission, they state that they ‘will offer a more affordable alternative for transportation between the islands for local families.’

‘What bothers me a lot is the secrecy, the outright deception of the public,’ said Dick Mayer, a former economics professor, before approximately 170 people at Maui’s Lihikai Elementary School.

According to Mayer, the price of traveling by Superferry would currently be more expensive than the prices quoted on the HSF website. For example, the base passenger price is $50 for an off-peak one-way ticket from Honolulu to Maui or Kaua’i and $60 for an off-peak one-way ticket to the Big Island. Mayer, and the website, point out that the prices are listed without possible fuel surcharges.

And those surcharges could be high.

Based on a Superferry tariff document, the ‘[f]uel surcharge shall be levied at the rate of [a] 2 percent increase in the price per ticket (passenger and vehicle) for each 10 percent increase in fuel costs [of marine diesel oil] above the benchmark price [of $300].’ The same document says that with marine diesel at $331 per metric ton the price of a $50 ticket could increase by 2 percent to $51.

According to Bunker [], a website which keeps track of marine fuel prices, on July 25 marine diesel oil was $584 per metric ton in Houston, $691 in Los Angeles and $728.50 in New York City. Each figure is well above the $300 HSF mentions in the tariff document.

On Maui, where opposition to the Superferry has been the most vocal, not one person at the recent public meetings spoke up in favor of the Superferry. Pent-up hostility was unleashed on Terry O’Halloran, HSF’s public relations director, and his inability to provide answers to questions fired in machine-gun fashion fueled tempers even more. Catcalls and derogatory comments blasted state deputy transportation director Barry Fukunaga as well as Superferry executive vice president Robert E. ‘Terry’ White. White sat quietly amongst the boisterous crowd with no comment.
Where’s The EIS?

Topping the list of public gripes is the lack of any environmental impact statement (EIS).

Over the past year and a half, several legislative bills and lawsuits demanding that HSF or the state provide an EIS for each harbor have been quashed or back-burnered.

Senate Bill 1785, introduced on Jan. 27, 2005, would require HSF to prepare an EIS if passed. Superferry CEO John Garibaldi argued that the time required to complete an EIS ‘would cause investors to pull their support.’ The bill was quashed by the Senate Transportation and Government Operations Committee (TGO) in the 2006 session.

On March 15, 2005, MarAd issued HSF a categorical exclusion exempting the Superferry project from federal environmental laws.
State Deputy Transportation Director Barry Fukunaga observing the proceedings at an informational meeting on Maui. Fukunaga did not answer any questions.

Hawai’i Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition filed a request for an injunction in the Maui Circuit Court on March 21, 2005, in an effort to force the state to prepare an EIS before using Kahului Harbor for the Superferry. In response to MarAd’s categorical exclusion, a lawsuit requesting a full environmental impact statement was filed in August 2005 in the U.S. District Court on behalf of the three environmental groups and the Friends of Haleakala National Park. The suit was dismissed on Sept. 29, 2005, by U.S. District Judge Helen Gillmore.

‘What bothers me a lot is the secrecy, the outright deception of the public.’

Hawai’i Sierra Club Vice Chair Lucienne deNaie feels that the state is turning a blind eye to Hawai’i residents. ‘When the Sierra Club met with Garibaldi, we asked for an EIS and were told [HSF] didn’t need to do [one] because the governor gave them an exemption,’ deNaie says.

DeNaie, who is also running for the East Maui County Council seat, says that there are not enough answers yet, and the way to get those answers is with an EIS. ‘Let’s get more information and then decide if we should have the Superferry.’

A ‘disaster’ for small businesses

Small businesses and farmers statewide believe that the Superferry will have several negative impacts on commerce. These impacts include additional harbor congestion, higher intrastate shipping rates and the inability to ship partial container loads.

Currently, plans for the Superferry call for daily docking at Kahului’s Pier 2, the same dock used by Young Bros. freight service as well as several cruise ships. The plan will cause Young Bros. to lose about 25 percent of their harbor space and force the company to raise their shipping costs and stop accepting partial container loads-a decision that could negatively impact numerous small businesses throughout the island chain.

DeGray Vanderbilt, a 30-year Moloka’i resident, called for a boycott of the Superferry. Referring to Young Bros., Vanderbilt accused the state of ‘compromising the lifeline of the Islands.’

‘Here’s a successful operation that’s serving all of our island communities throughout the state,’ said Vanderbilt. ‘We just don’t understand why you would compromise that operation with something that is a fly-by-night, untested situation.’

Hawaii Sierra Club state Vice Chair Lucienne deNaie says that farmers and small businesses are being ‘shut out.’DeNaie is currently running for the East Maui County Council seat.

‘You should be ashamed of yourselves,’ Maui flower farmer Lloyd Fischel railed at DOT vice deputy director Barry Fukunaga in an impassioned testimony. ‘For small business and medium-size businesses, this is disaster. Every business is going to be affected.’

Another point of contention is a planned change to the Superferry’s operating schedule. Due to overcrowded conditions at state harbors, harbor use by HSF is subject to availability and must be authorized by the state. Under the new schedule, the Superferry will arrive on Maui at 9:30am, depart for O’ahu at 10:30am and return to Kahului the following morning, forcing merchants who hoped to ‘drive’ their goods to O’ahu to spend the night.

And if a voyage is cancelled, where do more than 800 people and 200 cars go? No one seems to be able to answer that.

Questionable harbor arrangements

The Harbors Operating Agreement between the state and HSF has raised some eyebrows and a blizzard of questions. At Kawaihae, a barge will be moored at Pier 1 and utilized as a transition vehicle for loading and unloading of vehicles, and an existing ‘shed’ will be used as a passenger terminal. Honolulu will also utilize a barge for vehicle transfer at Pier 19. Kahului will have a nearly identical setup at Pier 2, except that the Superferry will need to berth at about a 75-degree angle to the barge. A ‘transfer span’ will be utilized to bridge the gap, forcing vehicles to make two tight, right-hand turns to access the Superferry. Passenger facilities for both Kawaihae and Kahului will consist of large tents and ‘high-end Porta-Potty’ restroom facilities.

DeNaie relayed that no one has quite figured out how the Superferry will be able to realistically dock at Kawaihae Harbor. ‘The area where they’re supposed to land is inaccessible for half the year due to high surf,’ she claims.

If this is true, the safety of transitioning vehicles from the barges to the Superferry in high surf, wind or storm surge conditions is certainly questionable.

The state will be providing the ramps and barges. The barges are being constructed in China by the firm of Healy-Tibbetts. According to Project Manager Clay Hutchinson, bids from U.S. firms were too high, and the state is getting ‘the best bang for their buck’ with the Chinese construction.

If the barges are not delivered by HSF’s launch date, the state will be obligated to pay HSF $18,000 per day in liquidated damages. Hutchinson says that the contractor actually pays the damages, not the state. He says that at this time Healy-Tibbets is on schedule with their contractual obligation.

There is a possibility that the Big Island may be the last of the four islands to see harbor improvements. In the Harbors Operational Agreement, HSF acknowledges that the state-provided equipment may not be available in time. There is a possibility that such a delay could incur more liquidated damages. The state will be seeking an appropriation from the Legislature to authorize such payments to HSF.

The invasive and the endangered

Billy Irvine, a Big Island hapu’u tree fern merchant, says that he will no longer be able to bring hapu’u to Maui. He explained that it takes three hours at the dock in Hilo to inspect the hapu’u for fire ants and coqui frogs. ‘I have been supplying Maui with hapu’u for the last 30 years. Now I cannot. The freight forwarders will no longer be doing ag inspections.’

‘It’s a pipe dream that no whales are going to get run over.’

Many fear that the Superferry, which also calls itself the H-4, will be an open freeway between islands for invasive species. Some species have been isolated to certain islands, such as the imported fire ant on the Big Island. The fireweed problem on Maui, O’ahu and Kaua’i is minimal, however this livestock-killing pest has proliferated across the Big Island. Kaua’i does not have mongoose, thereby allowing it to boast a thriving population of nene and other endangered birds.

According to O’Halloran, HSF plans to train their own staff to inspect vehicles for invasive species. But with only a one-hour turnaround time to inspect more than 200 vehicles and carry-on baggage for more than 800 passengers, it could be quite difficult to do a thorough job, especially if the people inspecting are not professional botanists or biologists.

Agricultural products must be inspected and passed by either the Hawai’i Department of Agriculture (HDOA) plant quarantine office or through the Nursery Self-Certification Program and display an HDOA ‘passed’ sticker before being allowed on the Superferry.

O’Halloran did not elaborate further on HSF’s plan to deal with invasive species. ‘As we work through our invasive species [policy], we are coming up with ways we do things and we will put it out there as we get it,’ he says.

And then there are the whales.

According to an Aug. 19, 2003, technical report by the Ocean Science Institute (OSI), 22 whale/vessel collisions were reported in the Hawaiian Islands between 1975 and 2003, with 67 percent of incidences occurring around Maui and 16 percent in O’ahu waters. The lowest collision rate occurred in waters off Kaua’i: 5 percent. The report states that, ‘The results presented indicate that whale/vessel collisions in Hawaiian waters are occurring with increased frequency and will likely continue to increase unless steps are taken to actively mitigate the problem.’

The majority of ship-whale collisions over the 28 years encompassed in the study have involved commercial whale-watching tour boats. These vessels range from 31-60 feet in length and travel anywhere between 10 and 30 knots.

Environmentalists maintain that a vessel the size of the Superferry traveling at 35 knots through whale-dense areas of its planned course is a recipe for disaster.

‘It’s a pipe dream that no whales are going to get run over,’ says deNaie.

Stryking out

The military currently utilizes four high-speed catamarans called the WestPac Express to< \h> move troops and vehicles between Okinawa, Japan and Thailand.

In Exhibit 13 accompanying HSF’s application is a quote from Lt. General W.C. Gregson, Commander, U.C. Marine Forces Pacific: ‘WestPac Express has fulfilled the U.S. Marines’ expectations. The trial period was an overwhelming success. We are very pleased to continue working with the HSV (high speed vessel) and plan to take full advantage of the vessel’s capabilities in the coming years.’ In the same exhibit, ‘Incoming Army Stryker units driving up demand for live-fire training exercises allowed only on Big Island’ is touted in large print as a selling point.

Pacific Business News reported on March 26, 2005, that ‘With Lehman’s expertise, the Superferry plans to operate a Westpac Express, essentially to carry military equipment and ferry vehicles from O’ahu to the Big Island on a daily basis.’ Lehman told PBN that ‘This logistical plan will make it easier for soldiers to train when the Stryker Brigade comes to Hawai’i. The brigade will be stationed on O’ahu and conduct training exercises on the Big Island.’ He pointed out that the Superferry is able to transport Stryker vehicles. HSF states on Page 9 of its PUC application that, ‘In Hawai’i, it is anticipated that an entire battalion will be able to be transported from O’ahu to the Big Island on four trips at lower cost.’

The primary armament on Stryker vehicles is the Stryker Mobile Gun System. The primary ammunition for this gun system is fancifully called kinetic energy penetrators, and is made of depleted uranium (DU), a toxic and possibly cancer-causing substance.

HSF has been eerily silent about whether or not DU munitions for the Stryker vehicles will be transported on the Superferry. On July 11, HSF vice president Terry White told this reporter that HSF has no contract negotiations with the military, and if the military wants to transport vehicles and troops, they will have to make reservations and pay the fares like everyone else. When asked if munitions for those vehicles would be transported, he said he didn’t think so, but he wasn’t sure.

What is going on here?

The Superferry’s PR man O’Halloran says that at future public meetings, he will have answers to the questions the people have asked.

Sen. Tsutsui has confirmed that the three meetings that have taken place on each affected island will be considered as one meeting, and DOT and HSF must conduct two more series of meetings. The next set of meetings is scheduled to take place in September.

One wonders if the Hawaii Superferry will come back with the right answers.


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