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!