Ferries from bankrupt Hawaii company land in Norfolk

NORFOLK

The name on the side of the sleek twin-hulled vessel reads Hawaii Superferry, but the old cargo pier at Lambert's Point Docks is a long way from the islands.

The Alakai, one of two high-speed ferries owned by a Hawaiian company that filed for bankruptcy, arrived in Norfolk on Tuesday, with the second due to arrive by the middle of next week, said Scott Schubart, port manager for Norton Lilly International, a national shipping agency.

The ferries, now in possession of the U.S. Maritime Administration, are being moved to Norfolk from Mobile, Ala., for "insurance considerations," said Susan Clark, an administration spokeswoman. The upcoming hurricane season was a factor in that decision, she said.

The Navy might be looking into the possibility of leasing both, according to a report on the Web site of DefenseNews, a trade publication.

The catamaran-style Alakai, with a top speed of 35 knots, is capable of carrying 866 passengers, along with either 282 compact cars, or 20 large trucks and 90 cars.

It and its sister ferry were ordered by Hawaii Superferry Inc. to offer an alternative means of travel ing between the Hawaiian islands. The firm was controlled by J.F. Lehman & Co., which was founded by former Navy Secretary John F. Lehman.

The Alakai began operations in August 2007 as part of the Inter-Island High Speed Ferry System, running between Oahu and Maui, but ran into legal challenges from environmental groups citing potential threats to whales.

In March, the Hawaii Supreme Court declared that legislation allowing the ferries to operate without an environmental impact study was unconstitutional, which shut down the service immediately.

Hawaii Superferry and its parent company, HSF Holding Inc., filed for bankruptcy on May 30 in Delaware. On July 1, a U.S. bankruptcy judge ruled that the company could abandon its ferries to lenders owed nearly $159 million, Bloomberg News reported. J.F. Lehman & Co. lost its entire $85 million investment, company officials said.

The Maritime Administration, which guaranteed the loans for the ships, took possession of the two ferries, Clark said. As of May 30, the administration was owed nearly $137 million plus interest for both vessels, Clark stated.

Both ferries were built by Austal USA LLC in Mobile, Ala. It is owed $23 million, according to the Press-Register newspaper in Mobile.

In the fall, Austal was awarded a contract potentially worth $1.6 billion to build up to 10 vessels for the Army and Navy based on its fast-ferry platform, the newspaper reported.

Allison Stiller, deputy assistant secretary of the Navy for ship programs, told Defense News in an interview published July 13 and posted on its Web site that the Navy is looking into the possibility of leasing the two ferries.

"Those ships would require some modifications if we were to lease them," she said. "They haven't been presented to the Navy as an opportunity."

Legal issues with the maritime administration related to its loan guarantees to build the ferries and operate them commercially would have to be resolved, Stiller said.

"If a transfer were to be made, those would be issues," Clark said in an interview Friday. "Our purpose is to support the merchant marine."

Robert McCabe, (757) 446-2327, robert.mccabe@pilotonline.com