Tuesday, March 11, 2008

Musings: Comedy of Errors

In anticipation of a busy day, I lingered on my walk this morning, heading a couple of miles mauka so Koko could run loose and burn off extra energy and I could admire the dark red of ohia blossoms and the silvery foliage of kukui trees in a stream-fed valley.

The sun was slow to shake off the clouds that clung to it as it rose, but it finally broke through — exposing itself as a burning orange ball — and the slopes of Makaleha and Waialeale blushed.

That’s my version of the “breakfast of champions,” because a big dose of nature sustains me for hours in the cyber realm, where I discovered that the Superferry Oversight Task Force — excuse me, it’s official name is Hawaii Inter-Island Large Capacity Ferry Vessel-Oversight Task Force — met yesterday in Honolulu.

A quick check of the two Honolulu dailies failed to turn up any report of the meeting, which apparently they don’t routinely cover, so I called one of Kauai’s reps, Dennis Chun, and asked if the issue of damages during drydocking came up.

“Yes,” he said, “it came up because we asked. Oh, what a comedy of errors. I was like, what? When they were taking it to dry dock, a boat ran into it and put a big puka in it. Then in drydock, the keel was all damaged because they blocked it wrong.

“And because other companies were involved, there’s all this litigation going on, guys are suing each other. So that’s why they haven’t said in public what actually happened, because it’s still under investigation, and the Coast Guard is involved in it, too.”


Wonder how long it take to get that all sorted out. Perhaps as long as it will take to get the report from the State Auditor, or to complete the EIS, which it seems has been delayed by the drydocking.

Dennis reported that “the rapid risk assessment was begun, but it can’t be completed because the ferry isn’t running, so that report won’t be done till May or June, which will set back the EIS.”

Oh, what a comedy of errors indeed.

Meanwhile, according to a letter to the Maui News reprinted on the Hawaii Superferry unofficial blog, the Alakai uses 6,942 gallons of marine diesel per trip, 13,900 round trip, 97,300 gallons a week, 417,000 gallons monthly. Three hundred sixty-five round trips from Oahu to Maui use over 5 million gallons, which at $3.50 per gallon equals $17,500,000 annually.

That’s $17.5 million, in case you’re not good with zeros, and a fill-up of 56,800 gallons costs the company nearly $200,000.

I mention this because The Advertiser reported today that Gas prices at the pump rose overnight to a record national average of $3.2272 a gallon. Where oil goes from here is anybody's guess. Many analysts expect prices to moderate, while others predict oil could keep rising to $120 a barrel, or higher.”

So how, one wonders, will the Superferry ever be able to make a go of it as fuel prices continue to rise and it was already floundering with bargain fares?

As Maui resident Dick Mayer noted in email:

Of course they [HSF] were expecting to have their "fuel surcharge," so that there would be NO additional expenses if fuel prices rose. Ala[s], they rose and they are operating w/o the surcharge until May/June when their prices will skyrocket as they are trying to win back a clientele. Let's see if they get more customers with $76 fares and a low summertime "barf-o-meter" rating.

Yes, let’s see. But first, they’ve got to get out of drydock without incurring any more damage. This comedy of errors isn’t nearly over yet.

6 comments:

MauiBrad said...

Oh, nice to hear a little from Dennis. I was just thinking yesterday that whoever was responsible for the blocking mistakes might have lost their job over that one. A friend asked my who was responsible for the drydock mistakes, he thought there might have been some ill-intent. I said I don't think so, I think the Carlyle Group owns the drydock, they are suppose to be buddy-buddy with Lehman. But I could not help but thinking there might be some real 'disagreements' resulting from how the whole drydock thing has happened. So, it is interesting to hear about the bit on this that came out of the Oversight Taskforce Meeting. Wish we had a full report on that meeting. BTW, I don't think the insurance covered everything on this. I would guess the insurance covered the rudder damage, but the damage by the tugboat and the damage of the blocking in drydock are seperate issues. I don't know if it is a 'comedy of errors' anymore. I would call it 'one big clusterf**k.' Aloha, Brad

MauiBrad said...

Something else about the blocking damage. There are knowledgeable people here on Maui, the one who broke the story about the blocking damage, who think this kind of damage cannot be fixed. The hull may be ruined for good. I don't know, and I don't think they know for sure either. They are going to try and take a good long time to fix it, through April, but it remains to be seen whether it does come out of drydock. I think it will be very expensive, but they will be able to re-build the hull and sail again. Aloha, Brad

Karen Chun said...

Meanwhile, their second ferry is being built as they eat up their taxpayer guaranteed MARAD loan.

I wonder why someone at MARAD doesn't put a stop to the loss that we taxpayers will have to cover when HSF goes bankrupt.

Joan said...

Good question, Karen. To answer it, we'd need to find out why they got the MARAD guarantee in the first place. Who is their benefactor in Washington?

Brad, your friend is not the only one to make the observation that there might have been ill-intent with the drydock "mishap." Several people have voiced that to me, as well as the thought that HSF had the boat screwed up intentionally to keep it out of the water longer, cover up damage caused by a whale strike and/or have the drydocking company pay for damages incurred during a whale strike. Surely somebody in the boat yard knows da scoop.

MauiBrad said...

Joan,

I have started to reconsider this whole thing about how the drydocking mistake could have happened. I don't really know, but I do think there are bigger events going on here, way bigger than the Superferry but that does involve the characters and entities associated.

Some of the bigger backdrop events include what is happening to the U.S. dollar as the Fed pours two auctions of $200 billion in dollars out of thin air into the banks in return for bad collateral, and as the dollar predictably loses value in an unprecedented manner, the resulting dollar denominated price per barrel of oil (and all fuel) keeps going up also to unprecedented levels. Meanwhile big funds like the Carlyle fund (owned by the Carlyle Group) are still failing from the crisis in mortgage banking that started this liquidity problem.

It is a mortgage banking problem that is creating a dollar problem by Fed actions and then creating an oil-based energy problem. This thing is going to be frickin' huge.

The Superferry cannot afford the fuel and it's prospective passengers cannot afford HSF fares.

Our leaders at the state and federal level do not understand the significance of what is happening. Derrick DePledge had a good article today on a still favorable forecast of state govt. revenues from the Council on Revenues. Their forecast assumptions do not capture what is happening right now, for the past month, and the coming months in the visitor industry.

As Paul Brewbaker told some businessmen recently, it's time to go lean. I'll take it a step further, it's time to cut all outside sourced expenses and take up gardening.

Western civilization has only been in Hawaii for about 250 years. Intelligent Hawaiian Polynesian civilization was here for a 1000 years before that. It is time to relearn the sustainable living way of life of the Hawaiians from before these unsustainable times.

Things are gonna change big, soon.

Aloha, Brad

Lara said...

Good post.