Monday, October 15, 2007

Superferry in demand elsewhere, makes good military transport too!

Here is a great blog entry from another site on the military large arm of this thing.  Highlights are mine for quick searching emphasis.  JT

Superferry in demand elsewhere,
makes good military transport too!

by Larry Geller on 14 October 2007on

There's no question that Superferry executives are keeping their eye on the money. Much of it may be military money. In comments to the previous post, Scott Crawford mentioned that there were references to the military uses of the Superferry in the company's original filings to the Public Utilities Commission. Doug jumped right in with the URL. Thanks to you both!

I'll list up some documents that readers may be interested in at the end of this post.

The PUC application includes the illustration at right specifically indicating a use for the Superferry in moving Stryker vehicles to and from the Big Island.

It's possible that there are big bucks in this, and that the passenger end of the business might be only a part (big part? small part?) of the ferry's profitability. A transport vessel cleared to operate in Hawaii's whale-rich waters would be just what the military wants. Without the environmental clearance, of course, this potentially lucrative opportunity disappears.

Now, could this be part of why the Legislature is discussing the Superferry issue in secret? Could it be that the Superferry is being pushed for its military uses, and no one wants to introduce that into the public dialogue? A whole new realm of protest would arise if it turned out that the Superferry was really intended to be a key component of the military Stryker force.

Is it at all far fetched to suggest that the Superferry might have substantial military business? Let's look at the company behind it, J.F. Lehman & Company. Here is a snippet from their philosophy page (you might want to read the whole thing, a small snippet does not give the complete picture):

The firm focuses on the U.S. and U.K. defense markets which are joined by close strategic and cultural alliances and are well known to the principals. These sizeable markets are further augmented by J.F. Lehman's ability to address companies whose defense-based technologies have attractive commercial applications.

Here's the bio page for John F. Lehman, Chairman and Founding Partner. As you see, he's a highly educated, highly experienced executive with a superb military background. Once again, please read the whole thing, but here is just one paragraph:

From 1981 to 1987, Dr. Lehman served as Secretary of the United States Navy. As the chief executive of the U.S. Navy, Dr. Lehman was responsible for the management of 1.2 million people, an annual budget of approximately $100 billion and total assets equivalent to those of the seven largest Fortune 500 corporations combined. Prior to serving as Secretary of the Navy, Dr. Lehman was President of the aerospace consulting firm Abington Corporation, served as a delegate to the Mutual Balanced Force Reductions negotiations and was the Deputy Director of the Arms Control and Disarmament Agency.

This guy can certainly do more than ferry tourists and imu rocks between islands in Hawaii.
Looking now at the corporation's application to the PUC, we find military uses mentioned explicitly:

The vessels might also be chartered to the military from time to time for movement of troops and equipment, mainly from Oahu to the Big Island for military exercises. [p. 3]

(Hmmm.... when it is chartered to the military, will it still be making civilian runs?)

Military Usefulness. Discussions regarding potential military use are ongoing. The technology to be used in Applicant's vessels has proven useful to the U.S. military
in other locations. The military currently operates four hybrid catamarans, including the Austal-built WestPac Express, which runs on an Okinawa-Japan-Thailand route, and the Army and the Marines are currently exploring the acquisition of a significant number of high-speed vessels using this same technology.

The vessels are attractive to the military because of the high speed at which they operate, their open-ocean seakeeping, reliability and operating economics, and their ability to move troops with heavy vehicles and equipment. In Hawaii, it is anticipated that an entire battalion will be able to be transported from Oahu to the Big Island on four trips at lower cost than the current transit time of 10-14 days using commercial airlines and military landing craft or chartered commercial barges. Exhibit 13 depicts a ferry in military use. [p. 10]

Exhibit 13 is the illustration near the top of this article. Click for a larger version.
It's easy to see that being able to transport an entire battalion from Oahu to the Big Island and back at a reasonable cost would be a very attractive military application. The Superferry's owners have the clout to get such a contract.

Of course, they would need the environmental clearance or no lucrative military contracts, I assume. And here we all thought they needed it to carry passengers, SUVs and pets!

So just why do we need a special session?

Now that we know there are potentially lucrative military contracts to be had, we can question why the ferry stays here only to supposedly bleed money.

The scare tactic has been that the ferry is losing so much money that it will be an economic disaster for the company unless the Legislature exempts them from the law. Check out this paragraph, the very last in today's Advertiser article, Legislators push for Hawaii ferry probe:

Superferry's chief financier John Lehman last week told the Press-Register in Mobile, Ala., where shipbuilder Austal is located, that the vessel is in high demand because there are few like it anywhere else in the world. He said it could easily find work outside Hawai'i as a military transport or civilian ferry.

Yup, all the way at the end of the story. So now we learn that the ferry is not in danger of going bankrupt or anything. In fact, it is in high demand elsewhere.
With military contracts in Hawaii and maybe some passenger revenue also, why shouldn't the ferry just go off somewhere to take advantage of the high demand Lehman has identified? As we learned, he's an experienced and knowledgeable guy.

Then, if and when an EIS reaches a favorable outcome, either that ferry or the other being built for Hawaii could come back and start service here.
The ferry company isn't planning to operate in Hawaii because they have kind hearts. They expect to make more money here than by deploying the ships elsewhere (or they'd just deploy them elsewhere, right?).
So let them go, they'll be back.

We don't need a special session. Market forces will bring it back. Unless the EIS comes out against it, of course.

Oh, we better pay some attention to the EIS and whether it will be conducted properly. Will the contract with Belt Collins contain a pesky little paragraph requiring that their final report meet State requirements or they don't get paid? But that's another article.

Let the ferry go, let it be free. Cancel the special session and get on with the investigation of how we got into this mess. Print photos in the paper of it departing Honolulu Harbor for military operations elsewhere. If there's really money to be made here, you can bet it (or its sister ship) will be back.

Let's get on with other important challenges and opportunities.