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Wednesday, April 23, 2014

No contract, no commitment on $80M ferry

An $80-million ice-breaking ferry and a roll-on/roll-off ferry separately reported in recent days refer to the same vessel named the Susitna in Alaska and, according to the Fitial administration this weekend, the CNMI has not committed any funds nor signed any contract on this. It added that this undertaking “could not be pursued without widespread community support,” although a federally funded feasibility study on the expansion of marine passenger and cargo services has started.

Lawmakers separately said an interisland ferry service is “worth looking at” but cautioned against making any commitment to buy one without thorough analysis.

Press secretary Angel Demapan, when asked for comment, said the CNMI was initially approached on the ferry proposal by Saipan resident Ambrose Bennett and David Oliver of the Seahurst Group. The communication between the CNMI government and the owners of the ferry started around August.

He said Bennett and Oliver’s proposal was to transfer the ferry to the CNMI “at no cost; however, the Commonwealth would have to assume the underlying grant and financial requirements to operate the vessel as a ferry.” Bennett is a retired Kagman teacher.

Jim Stump, the governor’s legal counsel, was requested to examine the feasibility of use of the ferry to service the CNMI’s needs, the press secretary said.

“However, after a brief examination by Mr. Stump, he recommended to the governor that this form of undertaking required careful consideration and detailed analysis before agreeing to accept any vessel,” Demapan told Saipan Tribune.

He said it was at this point that Gov. Benigno R. Fitial and Stump determined that the proper approach in examining the feasibility of ferry operations was to use a four-step process that they already earlier explained.

These are:

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

2. Identification of federal grants that could aid in reducing operational and capital costs;

3. Development of a 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. No commitment of funds or contract was ever made or offered by the Commonwealth in regards to the Alaskan vessel,” Demapan said.

The administration earlier said it informed the owners of the ferry that the CNMI is “not interested in this matter” because of the need for thorough and complete review.

House minority leader Joe Deleon Guerrero (IR-Saipan) said yesterday that an interisland transportation is “worth looking at,” given the need to reduce the costs of commodities on Rota, as well as Tinian.

“This is worth looking at but like I said before, that we conduct a study before committing to something,” he said. He added that it would be a “mistake” if the administration is already looking at any particular “ferry” at this time.

“It has to be studied first. And then get through the process; get the best vessel at a low cost,” he added.

Rep. Frank Dela Cruz (IR-Saipan) and Senate President Paul Manglona (Ind-Rota) also had said that, while they support interisland ferry service, they caution the government against committing to something without a full economic analysis, like the sole-source $190.8-million diesel power purchase agreement that the governor and former attorney general Edward Buckingham signed with Saipan Development LLC. That PPA is under a temporary injunction.

Delegate Gregorio Kilili Sablan (Ind-MP), for his part, said it’s an insult that the CNMI people would first hear about the CNMI’s interest in buying a ferry from outside the CNMI.

Demapan said the Fitial administration strongly believes in the need for an expansion of marine infrastructure and services among Tinian, Saipan, Rota, and Guam as this is critical to meeting the community’s needs.

“However, the governor has adopted the four-point plan in pursuing this objective in order to ensure that this matter program is properly considered,” he said.

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

“This study 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,” Demapan said.

This study, which is expected to be completed within the first quarter of 2013, will provide the administration and the public with credible analysis on the costs, hurdles, and feasibility of this concept.

“From this information, the administration, with the support of the community, can make decisions on whether to pursue this concept further,” Demapan added.

The $80-million 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.

The vessel was borne 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, but the ferry has never been put to work.

National media quoted 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.

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