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Thursday, April 24, 2014

CNMI not buying $80M ice-breaking ferry
Kilili: Slap in the face CNMI didn’t hear about it from administration

An $80-million unused ice-breaking ferry from Alaska won’t find its way in the CNMI after the Fitial administration said during the weekend it informed the vessel owner that the Commonwealth is “not interested in this matter” because of the need for “thorough” and “complete” review, days after U.S. media outlets carried a story that the ferry may finally get a job in the tropics.

The CNMI community has known about the Fitial administration’s “several weeks” of communication with the owners of the vessel only from reports carried by mainland newspapers.

The $80-million vessel, named the Susitna, was supposed to be home in Mat-Su Borough in Alaska but it has remained in Ward Cove near the Ketchikan shipyard where it was built.

The Susitna would have traveled 4,500 miles to reach the CNMI.

“It’s about time the administration does something right, by waiting for an economic analysis to be done before making any deal. Maybe they learned a lesson from the $190.8-million power purchase deal,” Rep. Frank Dela Cruz (IR-Saipan) told Saipan Tribune yesterday.

Dela Cruz, chairman of the Public Utilities and Infrastructure Committee of the Saipan and Northern Islands Legislative Delegation, said this is the first time he heard about the administration’s consideration of an $80 million ferry.

Delegate Gregorio Kilili Sablan (Ind-MP), when asked for comment during the weekend, said it is “insulting” that the CNMI people would know about the matter from newspapers on the mainland.

“Don’t you think it’s a slap in the face to the people of the Northern Mariana Islands to learn that we are going to spend our money on an ice-breaker by reading about it in the Kansas City newspaper or the Juneau, Alaska paper? That’s just insulting to all of us,” Sablan said.

Sablan, just like Dela Cruz, likened the $80-million ferry deal to the sole-source $190.8-million diesel power deal that was among the subjects of a defeated resolution impeaching Gov. Benigno R. Fitial for 16 allegations of corruption, neglect of duty and felony. The impeachment resolution is expected to be reintroduced in January by an incoming supermajority that was formerly the minority bloc.

“To me the $80-million ferry deal looks just like the $190-million diesel power deal. It’s what we are all sick and tired with Governor Fitial. He’s cutting deals behind everyone’s back that will cost all of us millions of dollars. We’ve had enough of this nonsense,” Sablan said.

Dela Cruz, for his part, said he feels the Fitial administration is trying to cover up for what it did with the power deal.

“I feel they’re trying to let the people think that they are trying to do their due diligence by waiting for an economic analysis on this ferry project to try to cover up for what they did with the PPA. I’m a little dumbfounded with such things happening,” said Dela Cruz, reiterating that the administration should cancel the no-bid, $190.8-million power purchase deal with Saipan Development LLC.

During the weekend, the Fitial administration confirmed its “several weeks” of communication with the vessel owners but said it is not interested in the matter.

‘Weeks of communication’

James Stump, legal counsel to the governor, had been communicating with the owners of the vessel with detailed questions, including whether the Susitna’s ice-breaking features be altered and how it would function from high-speed to-low speed, among other things.

Stump, when asked for comment by the Saipan Tribune during the weekend, replied via a statement coursed through press secretary Angel Demapan, who said that “the Commonwealth informed the parties from Alaska that we were not interested in this matter, although we were very appreciative of their generous offer.”

“The complexity and costs associated with marine passenger and transportation services dictates that a thorough and complete review be conducted prior to engagement of this activity with adequate public input,” said Demapan, who was with Lt. Gov. Eloy S. Inos in the Marshall Islands for last week’s Micronesian Chief Executives Summit. Inos came back yesterday, just in time for Fitial’s trip to the Philippines.

Demapan confirmed that the CNMI was approached “several weeks ago” by parties involved in ferry services in Alaska “to provide the community a vessel that could be made available at low cost.”

The Fitial administration spoke to the designer of the vessel to obtain some basic information regarding the unsolicited proposal, “but made the determination that the proper approach to be used in examination of the feasibility of expanded marine services was to follow the agreed upon four-step process of economic analysis, federal support, development of business plan, and pilot program,” Demapan said.

The CNMI, whose government budget for fiscal year 2013 is only $114 million, has been exploring ways to address shortcomings of marine cargo and passenger services between the islands and one of those options is establishing a ferry service.

According to national news media, including The Anchorage Daily News on Nov. 29, the CNMI’s interest may have originated with an individual in Vancouver, David Oliver of the Seahurst Group, according to the borough.

Having interisland ferry is good but…

Some local lawmakers, including Dela Cruz, said if the administration could follow a four-step process of “economic analysis, federal support, development of business plan, and pilot program” concerning the $80 million ferry, then it should also follow the same process in the sole-source $190.8 million diesel power purchase deal that will bind the CNMI for 25 years.

Senate President Paul Manglona (Ind-Rota), in a separate phone interview yesterday, said while he supports exploring possibilities of having inter-island ferry service, this matter has to be thoroughly studied.

“It’s good to know that the administration is waiting for an economic analysis. Maybe they have learned from their mistake on the $190 million power agreement. Like I said, an interisland ferry service is a good idea but everybody has to be on board on this, and a study has to be conducted first. Hopefully it will be funded by the federal government,” he said.

Manglona, however, said he hopes that not all federal highway funds will go towards a ferry service because the CNMI still needs to build and improve its roads.

Dela Cruz also supports having an inter-island ferry service “but there has to be an economic study,” he said.

“Like I said, it’s about time the administration does something right, waiting for an economic study before entering into any agreement to buy a ferry,” he added.

Administration’s plan

Fitial and Inos have been exploring ways to improve passenger service and cargo delivery among the islands of Tinian, Rota, Saipan, and Guam, Demapan said.

They believe improved passenger and cargo service among the islands would increase opportunities for economic development and improve the interrelationship of Guam and CNMI economies that are heavily dependent upon having adequate harbor and transportation systems.

“Unfortunately, the present passenger and cargo services among Tinian, Rota, Saipan, and Guam is inadequate to meet the needs of the communities and the government is working with the island leaders to make improvements in both facilities and forms of transportation,” Demapan said.

As part of the administration’s efforts to address the shortcomings of marine cargo and passenger services between Tinian, Rota, Saipan and Guam, the administration is examining various alternatives.

“One element being considered is the establishment of ferry service among the islands. The development of transportation services is a complex and costly undertaking that must be carefully examined to ensure adequate review and support. To be feasible, this service would have to be coordinated with existing private carriers, provide a low cost alternative to the airlines, generate sufficient demand, and be economically viable,” Demapan said.

The press secretary said the approach that has been established by the administration for examination of this issue has been divided into four elements:

1. Examine economic feasibility of expansion of marine passenger and cargo services between the islands of Guam, Rota, Tinian, and Saipan;

2. Identify federal grants that could aid in identified operational and capital costs;

3. Development of proposed business plan; and

4. Development of pilot program.

“All of these steps will involve extensive public scrutiny of cost, feasibility, and environmental impact and could not be pursued without widespread community support,” Demapan said.

Federal-funded study

Demapan said the CNMI has been awarded a grant from the U.S. Department of Transportation to implement the first step: examination of the feasibility of expansion of marine passenger and cargo services.

This study is expected to be completed during the early part of 2013.

It will examine the economics of expanded marine serves among the islands and provide the Commonwealth with information on alternative routes, projected demand, costs, revenues, compatibility with harbor facilities and private services, availability of grants, and the most appropriate vessel for these services.

The study will provide the administration and the public with credible analysis on the costs, hurdles, and feasibility of this concept.

“From this information, the community can make decisions on whether to pursue this concept further. It is hoped that this study will be completed within the first quarter of 2013,” Demapan said.

$80-million ferry

The $80-million vessel Susitna was born out of a unique partnership between the U.S. Navy, which wanted a prototype for a fast military landing craft, and Alaska’s Mat-Su Borough, which wanted an ice-breaking ferry to transport commuters across Knik Arm, national news media reported.

But the ferry has never been put to work.

The Anchorage Daily News quoted planner Emerson Krueger, who has become the borough’s point man on the ferry project, as saying that the borough wants to cut its losses and give the boat to the CNMI.

The same news article said “the borough didn’t pay to build the boat, but as the owner it is now responsible for bills averaging nearly $90,000 a month for dock fees, insurance, maintenance, and other expenses. In late summer, the borough began looking to sell it, give it away, list it as surplus property or store it for cheap. Nothing’s worked out—yet. Its newest best hope has emerged from the Commonwealth of the Northern Mariana Islands, Krueger said. Even in that, there is not yet the guarantee of a deal, Krueger said.”

The Anchorage Daily News said “James Stump, legal counsel to the commonwealth’s governor, has been in contact with the ship’s designers with detailed questions.”

“Most of the questions were answered satisfactorily, Krueger said. The ferry could remain close enough to land when sailing between main islands to meet safety requirements, he said. At lower speeds, the boat uses less fuel and can operate in heavier seas, according to its designers. The Navy design doesn’t affect its use as ferry for the commonwealth. Perhaps the most unique aspect is a barge deck that can raise for faster sailing or lower for beach landings, which the Marianas seem interested in, Krueger said,” the article further read.

It added, “Still the ship’s ice-breaking capability, essential to the borough, adds weight that may make the vessel too heavy to be practical in the tropical Marianas, he said.”

Dela Cruz, for his part, said he also would like to know how the CNMI government knew about the available ferry, or how the vessel owners knew about the CNMI needing a ferry.

“Is somebody from Alaska offering it to the CNMI? I am interested to know how this matter came to be,” he told Saipan Tribune.

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