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auction Superferry equipment on the auction block

DOT auctioning off $40 million harbor improvements for fraction of cost

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Posted: Thursday, July 18, 2013 1:00 am

LIHUE — Four years after the demise of the Hawaii Superferry, the ghosts of the interisland ocean route that sank millions of dollars of public money still linger.

About $40 million in statewide harbor improvements — from state revenue bonds that are still being paid — is currently being sold in an auction for a fraction of the original cost.

“The $250,000 is the upset price. Of course, we are hoping we can get as much money back as possible,” said Caroline Sluyter, spokeswoman for the state Department of Transportation. She added the upset price is set by market conditions.

The sale, facilitated by Rosen Auctions — which will take a 10 percent cut from the final price — started Tuesday and will end July 25. Staff at Rosen Auctions said they were the lowest bidders for the contract to auction the harbor improvements.

All of the equipment in harbors on Kauai, Oahu, Maui and the Big Island is to be sold as one lot. There are ramps, stairs, light poles, forklift extenders, chains, cables, sealed crates and three large barges.

Two barges measure 269 feet each, and a third one measures 193 feet. The barges have “been sitting out there for a while,” and have “aged,” according to Sluyter.

“We’ve heard that there is some interest, which is good, but of course we’ll just have to see what happens,” Sluyter said of the auction. The state Legislature approved the $40 million requested by former Gov. Linda Lingle to pay for harbor improvements across the state to accommodate the Superferry, according to Sluyter.

Alakai, the Superferry’s first boat, was delivered April 2007, and operated from December 2007 to March 2009, mostly between Maui and Oahu.

On the Alakai’s second visit to Kauai, protesters paddled out on surfboards and bodyboards and blocked the ship from entering Nawiliwili Harbor. After a standoff that lasted hours and resulted in a few arrests, the Alakai went back to Oahu without docking, and never returned to Kauai.

Many on Kauai and Maui protested against the company not being required to conduct an environmental impact study before operating.

Hawaii Superferry eventually filed for bankruptcy in May 2009, two months after the Hawaii Supreme Court ruled the law that allowed the Alakai to sail was unconstitutional, because an EIS had not been completed.

The company’s second vessel, the Huakai, was built in 2009 but never serviced Hawaii.

From civilian

to military

In December 2010, the U.S. Department of Transportation Maritime Administration gained the title to both ships through foreclosure. MARAD had given a loan guarantee of nearly $140 million for the construction of the boats, which originally cost $178 million.

When MARAD acquired the ships, $50 million of its loan guarantee was reduced, according to the Professional Mariner website.

During his 2010 gubernatorial campaign, Gov. Neil Abercrombie said he would bring the Superferry back if there was a willing and able private investor. Former Honolulu Mayor Mufi Hannemann, who lost to Abercrombie in the 2010 primary elections, also wanted to bring the Superferry back, but only after an EIS.

In March 2011, a bill introduced by state Rep. Joe Souki, of Maui, to revive the Superferry failed to progress at the state Legislature. In June 2011, MARAD offered the 349-foot Alakai and the 373-foot Huakai for sale.

In January 2012, the Navy paid MARAD $35 million for both ships.

“The Navy plans to use the vessels to transport troops and equipment to training areas from Okinawa and other locations,” MARAD reported on Jan. 27, 2012.

It cost the Navy another $35 million to modify the ships to its operations, according to the Defense Industry Daily website.

The Alakai is now USNS Puerto Rico, and the Huakai was renamed USNS Guam.

State DOT officials said Tuesday they’re “not looking at a ferry system at this time.”

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