Friday, March 20, 2009

Musings: That Viability Thang

Today is the first day of spring, although you wouldn’t know it from the gray skies, chilly temperatures and frequent showers passing through.

Just as you wouldn’t know the Hawaii Superferry did anything wrong if you went by the comment sections on newspaper web sites, where folks are pinning the big boat’s misfortunes on radical environmentalists, Neighbor Islanders lacking aloha, meddling justices, haoles and hippies, an anti-business climate and just plain backwardness.

In short, everyone and everything is to blame — except HSF itself. Hmmm. The company’s attorneys might not have been so crackerjack, but its PR people have done a great job of spinning this project from the start.

But even as the ferry departed Kahului yesterday to “a tugboat’s tribute and tears,” I couldn’t help thinking of what Kauai Rep. Mina Morita said earlier this week when I asked her for a comment on the state Supreme Court decision that placed the boat’s future in the Islands very much in doubt:

Again, we have to look at its financial viability. That’s what’s been missing through this whole thing, a thorough analysis of its economic viability. Is it economically viable? I don't think so.

That’s something that would have come out in a full EIS, which perhaps explains why the company didn’t want to go there.

Mina wasn’t the only one wondering about the fiscal soundness of this venture. Even a former Austal CEO had his doubts, as the Pacific Business News reported two years ago:

Whether Hawaii Superferry will be profitable is something that concerns Alan Lerchbacker, the former CEO of Austal USA, which built the ferry.

"I just worry about getting enough business to cover costs because of the sheer size of it," said Lerchbacker, who came to Hawaii to sell the ferry but works in another industry now.

Lerchbacker said he suggested a 72-meter vessel only to see the company order the 100-meter model.

"For a smooth ride on the ocean, that ferry will have to go over 35 knots, and it costs a lot of money on fuel to go that fast," he said. "They may need 400 to 500 passengers to break even."


Lerbacher’s estimates were right. HSF later told the state Public Utilities Commission that the Alakai could carry 866 passengers and 282 vehicles, and that its financial break-even point was traveling at 50 percent of vessel capacity. And as an akamai Maui observer noted, that financial break-even point was based on higher ticket prices, rather than the discounted fares now being offered. It also required a "fuel- adjustment surcharge" that is currently not being imposed.

So based on that scenario, how has the ferry been doing? Has it been able to achieve its 50 percent break-even capacity of 433 passengers and 141 vehicles?

Well, using figures that HSF provided to the state Department of Transportation that were printed in The Honolulu Advertiser on Wednesday, that same observer came up with a table that showed it wasn’t even close.

In November, the average number of passengers was 249, dropping to 207 in December and dipping even further in January to 166. Vehicle counts were similarly low, averaging 67, 61 and 46 for each of the three months previously cited.

You can view the whole table over at Disappeared News.

It seems that Lerchbacker might have been on something. A 71-meter vessel would have been closer to the right size for Hawaii — if efficiently ferrying passengers and cars in Hawaii’s notoriously rough waters was the goal.

But what if the goal was to test a prototype for the military’s new Joint High Speed Vessel program, whose bid specifications were being developed [Clarification: I was referring to Austal preparing its response to the JHSV RFP] while the 106-meter Alakai — the largest aluminum ship ever built in the US — was plying Hawaii’s waters, thanks to bypassing the EIS process?

Austal went on to win that contract, which is potentially worth $1.6 billion. If you check out the specs for the JHSV on Austal’s own website, you’ll see that the vessel is a 103-meter aluminum catamaran very similar to the Alakai.

Yes, I know that Austal has built other catamarans, including the WestPac Express, a 101-meter catamaran that was leased for a time to the Marines for use in Okinawa, back when the Navy was first exploring the concept of shifting some of its shipbuilding efforts into smaller, high-speed vessels that could operate well in littoral, or nearshore waters.

However, a key aspect of Austal’s JHSV specs is survival in sea state 7, which means a high average wave height of 19 feet.

If you check out Brad Parson’s Barf-o-Meter, which factors in wave height and wind speed, you’ll see that the Superferry was out zipping around in those conditions any number of times, providing ample opportunity for Austal’s designers to see what needed tweaking in order to land a JHSV contract with very rough water operability requirements.

Dismiss it if you will as a big coincidence or the ravings of conspiracy theorists. But as the old saying goes, the proof of the pudding is in the eating. While Austal sets to work building JHSVs, HSF is "looking for commercial and military charter options” for Superferry I and II — which conveniently was equipped during construction with the ramps needed for military use.

And as it departs, it leaves in its wake a big bill for harbor improvements and legal fees, a guv and Lege with egg on their faces, a squabbling citizenry and concerns about a backlash that may lead to weakening the state's environmental laws.

Bon voyage!

32 comments:

Anonymous said...

"In November, the average number of passengers was 249, dropping to 207 in December and dipping even further in January to 166. Vehicle counts were similarly low, averaging 67, 61 and 46 for each of the three months previously cited."

--- ah. interesting info. thanks

tho i still dont get why people here get so weirded out by the military

Anonymous said...

"military’s new Joint High Speed Vessel program, whose bid specifications were being developed while the 106-meter Alakai — the largest aluminum ship ever built in the US — was plying Hawaii’s waters"

"Westpac Express...leased for a time"

Actually, the specifications were completed September 13, 2006 and then presented to three potential manufacturers including Austal. Superferry was't even completed then. The Military was able to deliver the specs, after four branches agreed on the project in 2005, because they had 2 ships (Incat's HSV-2 SWIFT and Austal's Westpac Express) with these specs operating from 2001 (and still leased and operating) supporting operations in the Pacific, Atlantic, Mediterranean, Horn of Africa, Persian Gulf and Southeast Asia. In these areas, they encountered every sea condition long ago. This is a hole in your conspiracy theory that you could pilot the Superferry right through.

Joan said...

You're right, I should not have used the phrase "bid specifications," as I was referring to the JHSV RFP, which went out in late August 2007, with proposals due in late October of that year. The ferry was built and operating at that time and in preparing its proposal, Austal was able to use anything it had learned from the Superferry’s operations.

As for operating in a wide range of waters, you’re lumping the Austal and Incat ships together. Austal’s West-Pac Express has been used primarily in Okinawa.

Anonymous said...

"tho i still dont get why people here get so weirded out by the military"

21 military installations, 26 housing complexes, 8 training areas,19 miscellaneous bases and operating sites statewide. On Oahu alone the military controls 25% of the land area. Pearl Harbor houses the largest portage of nuclear fueled ships and subs in the world. An entire island (Kahoolawe) was literally bombed to smitherings and the military will never be able to return the island to a habitable state. The samething is happening in Makua Valley on Oahu. Pearl Harbor, named Puuloa by Hawaiians, was once a placed filled with fishponds that fed the entire Ewa plain. Limu and fish were abundant. Today, it is polluted with toxic waste from military activities. It is listed as a Superfund site by the military because of the high level of contamination, giving it a higher priority for clean-up funding. The military has proven that they are terrible stewards of the land and sea in Hawaii, and in Hawaii we are living with a very limited amount of land mass. We depend on our natural resources for sustenance and can ill afford to have our land and ocean contaminated. Lastly, it was the U.S.military that provided forces for the overthrow of the Hawaiian Kingdom and so for natives, we have a painful history when it comes to them. Many of their bases sit on "ceded" lands that are former Crown Lands belonging to the Kingdom. They lease these lands for $1.00. Prime coastal areas such PMRF in Mana, Bellows in Waimanalo and Kane'ohe Marine Base in Kane'ohe. All the while cost of housing, homelessness and all the associated ills that go with are on the rise. Natives being represented disproportionately in the homeless population.

MauiBrad said...

Excellent blog article today, Joan. You many know there are a bunch of people right now writing articles on these same lines of thought for the AP, NYT, TN, and HW. You beat them to the punch. Over the next few days we will see more articles on this.

I agree with what Mina Morita says in your article. The business viability has not been there with HSF. And I agree that it has not been there for the reasons that Mr. Lerchbacker raised.

A point that you write around is of these two vessels as a performance demonstration project. Austal has built similar vessels, but they were all built in Australia. These two aluminium hull vessels (HSF) along with LCS-2 are the only recent 100 meter plus size aluminium hull vessels built in the U.S. The capability, size and location being important as a **construction proving project in the competition for the JHSV and LCS contracts**.

The only problem is that aluminium hulls are now being seriously called into question for military purposes by military experts. Esp. for LCS-2 where it is expected to be able to do combat, the history of aluminium hull vessels in combat is that they get their butts kicked with missiles as in the Falklands War, and that once on fire, aluminium burns a lot more easily and quickly than steel. JHSV is not suppose to be a combat vessel, but it still has to overcome the threat.

I propose to you that the whole large aluminium hull vessel as a military vessel whether combat or sealift is a **Bloody, ill-conceived Australian idea that the Neocons naively adopted without proper evaluation.**

Aloha, Brad

Andy Parx said...

Haven’t you heard- like I said today, we were wrong all along. It couldn’t possibly have had military underpinnings- you can tell because they painted ”Superferry” on the side and put in carpets and seats.

Anonymous said...

to March 20, 2009 5:59 PM

well buddy you put some time into the answer, and i appreciate that, and i read what you wrote with interest

and you know, if you say you are sure the navy is an esp bad polluter in pearl harbor, hey man ill take it at face value, and it is a legit point (and so, like, if i show you a superfund site in the making down near the kiuc station at port allen, you gonna hold their feet to the fire on and slam kiuc every chance ya get?)

but i suspect the "it was the U.S.military that provided forces for the overthrow of the Hawaiian Kingdom and so for natives" thing is a core driver of the attitude i observe, and i think the hippy crowd 101 politic also plays into this

as to cheap leases and a high base density...gosh i really dont the the problem

and i hear you on the "Natives being represented disproportionately in the homeless population" thing. that is a very bad trend. "economic gentrification" is the descriptor (but again, dude, you gonna put that on the head of pmrf? c'mon...)

i know its hard to come down on the church institutions here, or old corporations (A&B), or the guy you voted into local office, or the competency level of a kid employed in an area housing agency. relative to those things, its easy to come down on a catch-all like a SF or "the military"

identifying what you did wrong, where you failed, and fixing it internally --- and THEN looking outward and (accurately) citing problems caused by 3rd parties...does that not strike you as the better approach?

Anonymous said...

Brad, don't you know by now that you are so over the top partisan on this subject that nobody even bothers to read your posts anymore?

Anonymous said...

Let me get this straight now Joan: This entire multimillion dollar convoluted politcal/military conspiracy was designed to gather data between August 2007 and September 2007; a period of two months?
HaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHa

Anonymous said...

Let me get this straight now Brad, you know better than all four branches of the military, the Joint Cheifs, the major manufacturers, and everyone else involved in the procurment process.
HaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHa

Your ego wackier than Parx's

Anonymous said...

During its first year alone (2001) the Westpac Express covered an astounding 85,148 nautical miles. This is equivalent to four circumnavigations of the world at the equator. It did so between Japan, Okinawa, and South Korea. It did so year round in seas that equal and exceed Hawaii's. Joan, your maritime ignorance is extraordinary.

Anonymous said...

Sounds like the poor losers are coming out of the woodwork, Joan.

Superferry supporters just need to get over it.

Boo hoo.

Yee hah, it was a lot of work but justice did prevail this time.

Anonymous said...

Is claiming the superferry was not viable the new spin to get enviros and sf haters off the hook for costing the state 200 some jobs and and an interisland ferry service? Shame.

Anonymous said...

''Is claiming the superferry was not viable the new spin to get enviros and sf haters off the hook for costing the state 200 some jobs and and an interisland ferry service? Shame.''

no the shame is that if the EIS was done as recommended by DOT (and as the law perscribes) initially, the inter island ferry may have had a chance. instead, lingle and garibaldi sold us short and now we got nothing to show for it 'cept a bill for 40 mil and change. it ain't over till it's over but to blame the anti military hippies and those whale luvin' haoles is pure shibai!
the superferry was sunk by its own ineptitude with an assist from corrupt gv'ment hacks.

Anonymous said...

from today's GINews:

Asked about the possibility that the Alakai would be sold to the military, Fargo took umbrage at the implication that it the Superferry was designed for military purposes all along.

“I want to make one thing perfectly clear because this has been misunderstood from the get-go. All these theories that it had something to do with the military are bogus,” he said. “We wouldn’t have painted, branded, and carpeted (the ship), put 831 first-class seats and spent all this money if we wanted to lease it to the military. That logic is absolutely flawed. The conspiracy theories ... are a bunch of baloney.”

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

W+Cheney+Lingle+Fargo= LIARS

MauiBrad said...

Re: Anonymous 8:11 PM

Whatever, man. Watch what already is and continues to happen in the procurement process for JHSV and LCS. Just a few weeks ago a retired 5-star CINCPAC Admiral wrote a scathing Op-Ed in the Washington paper on the fallacy of using aluminium hull vessels for military purposes. People in the procurement process know what's up on this, even it you don't.

Aloha, Brad

Anonymous said...

March 20, 2009 7:50 PM
March 20, 2009 8:04 PM
March 20, 2009 8:11 PM

-- kudos


"Sounds like the poor losers are coming out of the woodwork, Joan."

-- ya kinda, i would say so, you seem a few popping up more (and while i kept getting deleted when i asked - no dice on that SF whale strike thing huh?)


-- the 200 jobs will be outweighed by the stim bill money to HI (and man...would the return of the SF via obama $$ be ironic or what haha )

Anonymous said...

--to blame the anti military hippies and those whale luvin' haoles is pure shibai!
the superferry was sunk by its own ineptitude with an assist from corrupt gv'ment hacks.--

that's a pathetic excuse. It's the anti-military anti-capitalist dorks who went to court to sink the sf. Don't get off that easy. It's your fault the jobs and the boat left.

Joan said...

Let me get this straight now Joan: This entire multimillion dollar convoluted politcal/military conspiracy was designed to gather data between August 2007 and September 2007; a period of two months?

When you've had the specs for a year, as 11:10 a.m. helpfully pointed out yesterday, and already built a 101-meter boat and know what it does, how long would it take to see whether a 106-meter model is the way to go? So you run it for a couple of months in rough seas and settle on 103 meters, which is what the JHSV is. Besides, don't you think Austal has been watching the SF and was able to make adjustments in the JHSV design if needed? It's not like these proposals are written in stone.

Besides, there's also the issue of Austal being able to show it can build a big boat in America. As a source noted in previous post: “In an accelerated procurement environment, it would give [Congressional appropriations] committees great comfort in granting money for something up and running.”

Dawson said...

> “In an accelerated procurement environment, it would give [Congressional appropriations] committees great comfort in granting money for something up and running.” <

Current national events suggest that the environment for military procurement is about to take a major deceleration and be put under a large microscope -- not only in terms of cost, but in the very thing SF has been lacking: transparency.

If the SF story were played out in an Eastern seaboard state, under today's post-AIG media microscope, the public and legislative outrage would dwarf anything that the Kaua'i "hippies" have exhibited.

Skipping the EIS? Military connection? Backroom deals with buddies of business in high government places? Governors and AGs playing fast & loose with the law? Taxpayers taking a hit? ...What part of "self destruction" doesn't Austal understand?

Anonymous said...

"--to blame the anti military hippies and those whale luvin' haoles is pure shibai!"

-- ya, kinda, but just 'kinda"

otherwise, if i may:

"the superferry was [largely] sunk by its own ineptitude with an assist from [...incompetent] gv'ment hacks"

...

"It's the anti-military anti-capitalist dorks who went to court to sink the sf."

-- na, they went through the motions (court) and it stuck. funny though that the institutions they seem to hate/dislike served them well (as they do almost all people, in the long term and in the aggregate)

anyways, some other state-of-the-art operations (as to the technology at least) are on their way to kauai (smart grid, algae-to-oil, etc). will be interesting to see if they are rationally received

Anonymous said...

--na, they went through the motions (court) and it stuck. --

Uh, Ya. If they didn't go to court the boat and the jobs would still be here. Those people (the sf haters) need jobs. They obviously have too much time to stare at their belly buttons wondering what to do with themselves.

Anonymous said...

Wow, Brad's smoking gun is that someone disagrees. Like everything in the real world (not Brad's) is unanimous.
Gee Brad, if you actually were to run something with more than three employees who were terrified to disagree with you; you might gain some perspective on how things get done.
Executive rarely make decisions like the simple black and white type you and Joan and the other antiSF simpletons apply to them.
Those type of decisions are made at the lowest of levels. At the executive level, you are faced with paradoxes that have no solutions, are hard to balance and can manifest results that are the opposite of those intended by would be problemsolvers.
This, Brad, along with most of the accumulated wisdom of the free world, is what you don't know.
Now, run on back to your protected HSFU blog where nobody can disagree with you.

Dawson said...

> Executive rarely make decisions like the simple black and white type you and Joan and the other antiSF simpletons apply to them. <

Exactly. Executives make complex decisions, like those at AIG, Goldman, Lehman, Countrywide, General Motors and the Fed -- decisions so complex, far-sighted and brilliant that no one, including the executives themselves, can understand them, much less control their consequences.

> At the executive level, you are faced with paradoxes that have no solutions, are hard to balance and can manifest results that are the opposite of those intended by would be problemsolvers. <

The Myth of the Executive is dead everywhere except among executives and their sycophants, for whom it's less a world view and more a religion.

Anonymous said...

dude, dawson, accuracy aside, your outlook is like, really dark. just sayin

otherwise nice strong blog postings kauaieclectic. ty


March 20, 2009 10:39 AM
March 20, 2009 7:39 PM
March 21, 2009 7:31 AM
March 21, 2009 10:40 AM

Anonymous said...

Hey Dawson, it's the night shift at McDonalds; time to go to work!

Anonymous said...

Dude, hey dude, anon dude 11.24, wow man, yo dawg, check it out, check it out dawg, you know it's a little pitchy that you compliment your own posts.

Anonymous said...

Hey Dawson, it's the night shift at McDonalds; time to go to work!

Is that the best you can offer? Grow up.

Anonymous said...

and here i thought we embraced broken english. but yes, i did identify my posts. and yes, there were a large number of them (not my own) that were esp informative and/or funny. so yes, as i have in the past, i looked to note such to the site owner and express thanks. so sorry my (hopefully clear) intent does not line up w/ ur little theory there

Anonymous said...

Yo dawg, check it out dawg, why don't you throw in a l-l-l-little stuttering or "aw shucks" as well.

Anonymous said...

Oh, and you're right dawg, folks at McD's actually work rather hard. Dawson is a 2nd year public school gym teacher without tenure and that's where his knowledge on the culture of executives come from.

Anonymous said...

As to anti-military hippies, I'd just call them very concerned residents of Hawai'i.
There are a minimum of 824 contaminated military sites in Hawai'i including seven superfund sites, according to the 2006 Defense Environmental Report to Congress. This report does not include active ranges covered in radioactive depleted uranium. The military is hardly doing anything to clean up these sites, and you wonder why residents are mad?
The military has been trashing Hawai'i since the first day they stepped off the boat; damn right we're mad. Communities across the country are screaming for
the military to clean up its filthy, toxic messes, but there's no money for clean up only money to make more messes. Disgusting. And...no way to clean DU from lava; the military gift that keeps on giving. Mahalo for protecting us.