Wednesday, April 30, 2008

Superferry Spends Large

From Joan Conrow's blog: KauaiEclectic

Wednesday, April 30, 2008

Musings: Superferry Spends Large

I know the sun rose today, because that's what it does every morning, right? But I swear it actually got darker when Koko and I were out walking, and the sky looked like it wanted to rain so badly it could cry.

I'm headed over to Honolulu this morning, so this will be a quickie post — and all about the Superferry — starting with a referral to Ian Lind's blog, where he reports that Hawaii Superferry disclosed less than 6 percent of its 2007 lobbying costs.

If you've been wondering how much it costs to buy the kind of influence HSF has — at least, the reportable kine spending — the answer is $379,431.52. That the amended filing occurred at all is due to Ian, who complained to the Ethics Commission that significant expenses were missing from the original report. HSF initially claimed the company had spent just $21,791.56, which we all know doesn't buy diddly. Then Dan Mollway guys apparently put the squeeze on HSF to comply.

Ian's posting prompted Larry Geller at Disappeared News to write an open letter to Mollway wondering if the Ethics Commission is planning a formal hearing into the matter, since the state lobbying law provides for administrative fines against those who "Willfully file[s] a statement or report containing false information or material omission of any fact."

This filing, which occurs many months after the company got its special session legislation seems to me yet another indication of the disingenuousness that characterizes the HSF business model.

And you have to wonder, how come the dailies weren't on this? After all, Ian first wrote about the discrepancy back in May 2007.

Ian has another post today about the Argent Group, and its role in securing the federal loan guarantees for HSF. It'll be interesting to dig into the documents he's linked when I have some time.

Meanwhile, a report in Marine Daily News notes that Austal USA, which built the big boat, has launched the Independence, its prototype Littoral Combat Ship. It states:

As the prime contractor, and the only shipyard with a track record of building large (over 100 metres in length) high speed aluminum vessels in the USA, Austal is confident of its ability to deliver a low risk JHSV [Joint High Speed Vessel] platform to the US Navy and Army.

But no, the Superferry — the largest high speed aluminum catamaran constructed in the US — doesn't have anything to do with the military.

Military version of Superferry

RE: Military version of Superferry
From "Society of Naval Architects & Marine Engineers"

Austal Launches LCS2

4/29/2008 9:49:42 AM
The launch of Independence (LCS 2) closely follows the recent delivery of the first Hawaii Superferry vessel. A 107 metre vehicle and passenger carrying aluminum catamaran, Hawaii Superferry is Austal USA's largest construction project to date and is the largest high speed aluminum catamaran built in the USA. A second identical ferry is currently under construction and is scheduled for launch in September 2008.

The recent purchase of an adjacent 100 acres of land and the award of $33.7m in funding from the US Navy for shipyard development will see Austal USA commence construction of a Modular Manufacturing Facility (MMF) in 2008. The first phase is due for completion in mid-2009 and the resulting production line will enable the construction of three large aluminum vessels per year. The funding is provided through "Infrastructure Improvements at Gulf Coast Shipyards" for eligible shipyards with current defense contracts. Phase 2 of the construction is expected to begin shortly thereafter and will double Austal's shipbuilding capability to six large vessels per year.

In addition, Austal was recently awarded one of three Preliminary Design Contracts for the US Navy and Army's Joint High Speed Vessel (JHSV). Austal will submit a proposal for the Detailed Design and Construction Contract in mid 2008 leading to the selection of a builder for the JHSV class of vessels.

As the prime contractor, and the only shipyard with a track record of building large (over 100 metres in length) high speed aluminum vessels in the USA, Austal is confident of its ability to deliver a low risk JHSV platform to the US Navy and Army.

The JHSV requirements and concept of operations are similar to those of the Austal-built 101 metre WestPac Express, which has been serving the Third Marine Expeditionary Force in Okinawa, Japan for more than six consecutive years.

Thursday, April 17, 2008

Audit: Superferry drove state actions

Audit: Superferry drove state actions

Lingle administration criticized for bypassing environmental review

PDF: Superferry state report

The state may have compromised its environmental policy because of pressure from Hawaii Superferry executives who were worried about financing for the interisland ferry project, the state auditor has concluded.

The auditor found that an internal June 2005 deadline imposed by Superferry executives "drove the process" and pushed the state Department of Transportation to bypass an environmental review. The deadline, according to the auditor, was tied to Superferry's agreement with Austal USA to secure financing to pay the Mobile, Ala.-based shipbuilder to construct two high-speed ferries.

The federal Maritime Administration, which approved a $140 million loan guarantee for ferry construction, wanted confirmation that no environmental assessment of harbor improvements would be required because of the risk that environmental concerns could jeopardize port access. But Maritime Administration officials told the auditor they did not set the June 2005 deadline as a condition of the loan guarantee.

"In the end, the state may have compromised its environmental policy in favor of a private company's internal deadline," state auditor Marion Higa concluded. "It remains to be seen whether these decisions will cost the state more than its environmental policy."

The performance audit was required by state lawmakers as part of a law passed in special session last fall that allowed Superferry to resume operations while the state conducts an environmental impact statement. Legal challenges and public protests had halted ferry service after the state Supreme Court ruled in August that the state's decision to exempt $40 million in state harbor improvements from environmental review was in error.

The auditor's main finding was that the June 2005 deadline was not imposed by the federal government, but related to an agreement between Superferry and Austal. The audit questions whether the state did "sufficient due diligence to verify whether the deadline was valid for the reasons Hawaii Superferry Inc. claimed."

John Garibaldi, Superferry's chief executive officer, said yesterday that Superferry has consistently portrayed the June 2005 deadline as necessary for both federal and private equity financing. He described the agreements with the Maritime Administration, Austal USA and primary investors J.F. Lehman & Co. as interrelated.

"They were all dependent upon each other. No one stood on its own," Garibaldi said. "I think that's what we tried to express to people."

Garibaldi declined to comment on other findings in the audit because he had not yet seen a copy.

similar accounts

The auditor's descriptions of the chain of events that led the state to exempt the project from environmental review in February 2005 are similar to reports in The Advertiser in September and January.

The auditor and the newspaper received many of the same documents, which were screened by the Lingle administration for attorney-client privilege and executive privilege before being released. The administration is preparing a privilege log for the auditor and the newspaper to describe the documents that have been withheld. The Advertiser requested the documents under the state's open-records law.

Most significantly, the auditor — like The Advertiser — emphasized a late December 2004 meeting at the governor's office that included the governor's then-chief of staff Bob Awana, department officials, and Superferry executives.

Staff in the department's harbors division had wanted to require a statewide environmental assessment of the project and to get Superferry to install a stern ramp on the vessel to give it more flexibility at Kahului Harbor on Maui. But Superferry executives, according an account by a department staffer, told the state that anything but an exemption was a deal-breaker and that they would not install any ramps.

"Decisions made: We need to pursue EXEMPTION; and HSF will not provide any ramps on vessel," one department staffer told colleagues afterward in an e-mail.

The auditor concluded that department e-mails showed a decision was made at this meeting, although who made the decision is not revealed.

"Current and former department officials and employees who worked on the ferry project were either unable to recall who made the decision at that meeting or chose to invoke executive privilege when asked who directed the team," the auditor found.

The department, in its written response to the audit, rejected any inference that a decision was made at the governor's office directing the department to pursue an exemption. The auditor countered that the department's e-mails about the meeting "are self-explanatory."

"Ultimately, a decision involving the governor's office was made that directed the 'ferry project team' to pursue scenarios that would exempt the ferry harbor work from environmental review," the auditor found.

Fukunaga's decision

Awana, who resigned last year, told The Advertiser in January that he had no role in the decision. Barry Fukunaga, who was then the department's deputy director of harbors and is now Gov. Linda Lingle's chief of staff, has said he made the decision in consultation with his construction and engineering staff and then-department director Rod Haraga. The department also consulted with the state Office of Environmental Quality Control and county planning agencies.

Fukunaga told The Advertiser in writing last year that he did not discuss his deliberations or his eventual decision with Lingle, Awana or state Attorney General Mark Bennett.

The audit is also similar to The Advertiser's reporting last September on the Maritime Administration's loan guarantee for Superferry. Maritime Administration officials told the auditor that loan guarantees are typically exempt from environmental review because they just provide financing for ship construction. The vessels typically use port facilities already in place.

Maritime Administration officials told the auditor that harbor improvements for Superferry could have triggered an environmental assessment that could have limited ferry access to ports. So the Maritime Administration added a condition that Superferry provide confirmation that no environmental assessment was required.

"MARAD's position was that it was not willing to finance the construction of any vessel that might be unable to operate because it has no port," the auditor found.

The audit recommends that the Legislature empower a state agency to enforce environmental review laws and require agencies to update exemption lists every five years. The auditor found that the public has little involvement in the exemption process other than the right to file a lawsuit to challenge an exemption.

Higa had complained to lawmakers that she missed a March deadline for a preliminary draft of the audit because of significant delays in obtaining documents from the Lingle administration. Higa repeated those complaints in the audit and said her staff would be preparing a second phase of the audit for a later report.

Higa described the Lingle administration's cooperation as "slow and incomplete, at best." The department called that description "wholly untrue" and said any delays were based on requests by Higa that the attorney general found were "unreasonably broad in scope."

The department chose not to comment on many of Higa's conclusions. Mike Formby, the department's deputy director of harbors, said last night that the administration's wants the opportunity to review the second phase of the audit.

"I think what we wanted to do was reserve the right to see the full report, because it's really risky to look at half the report and respond knowing that they're out there still doing field investigation, interviews, reviewing documents," Formby said. "And basically, they look at the response you gave, and they go out and look for a way to rebut your response."

Wednesday, April 16, 2008

Where’s the Aloha Airlines special session?

Where's the Aloha Airlines special session?

I ask one simple question: Why was no "Special Session" of the Hawai'i Legislature, or an "Emergency Session" of the Legislature called to keep afloat Aloha Airlines, a 61-year-old loyal transportation company with thousands of longstanding employees affected; whereby we all know a Special Session was called for a "large capacity ferry vessel company" not even yet in business, with mostly part-time employees with little if any benefits and a company evading at every opportunity its kuleana to the environment and generations to come?

Could it be that our present governor cares more about helping the neo-con investors of Superferry, and their positioning for private military contracts, and the use of the ferry for future strategic military use, than caring about the thousands of Aloha workers, their families and all the related business loss?

Where is the Special Session for Aloha, Lingle all the while feigning your sympathy for the workers? So much hypocrisy and lies surround you and the Superferry dealings. Impeachment is an honorable path here, though not on the table in this corrupt political system, mirroring the U.S. Congress and Bush/Cheney (And I used to be an avid Republican).

And Mayor Bryan Baptiste, honestly, I and so many people wished you would have stood up to Lingle on Superferry, as did the Maui mayor forbidding county employee use of the ferry. I didn't understand your in-absentia style on this huge impact of an issue to us. May God bless all of us on this issue and our individual learnings.

John (Tyler) Cragg

John Tyler
toll free 866-530-4117
See for CPR and First Aid training for swim lessons at home and lifeguarding
enrollment/booking link:

Serving Los Angeles, San Jose, and Hawai'i Founded in 1991

Friday, April 11, 2008

Superferry CEO drafted Lingle letters of support to Washington

               Friday, April 11, 2009
Probably from Honolulu Advertiser reporter, Derick DePledge's own Blog.
Garibaldi drafts letter for Lingle:

The Advertiser has received thousands of documents from the Lingle administration — 21 boxes — as part of a request under the state's open-records law for material related to Hawaii Superferry.

The documents have led to two stories in the newspaper in January, with a third on the way, hopefully this month. Some of the documents provide interesting insight into the executive branch.

For example, there is an e-mail from John Garibaldi, Superferry's chief executive officer, to Linda Smith, Gov. Linda Lingle's senior policy adviser, in January 2005. Garibaldi thanked Smith for quickly contacting U.S. Department of Transportation and Office of Management and Budget personnel on behalf of the project.

At the time, Superferry was awaiting formal approval from the federal Maritime Administration for a federal loan guarantee on the construction of two high-speed catamarans.

Garibaldi, in his e-mail to Smith, attached a draft letter of support for the project for the governor to sign and send to then-OMB director Joshua Bolten. (Bolten has since become White House chief of staff.)

"We would appreciate the issuance of the letter as soon as possible," Garibaldi wrote.

Lingle drafted a letter, on executive letterhead dated the very next day, that was nearly verbatim to what Garibaldi had provided.

The main differences involved Lingle's first person account of the importance of the project.

From the Garibaldi draft:

I began working with the Hawaii Superferry principals soon after my election and quickly realized that support of this project should be one of my highest priorities.

To that end, I directed all parts of my government, including my personal staff, to work with Hawaii Superferry to assess the viability of their business plan.

We have concluded that they have a viable, strong business plan that will have a high probability of success.

As a result, I have directed my Department of Transportation to give its highest priority attention to identifying the needs for port facilities to accommodate this ferry service on the Islands of Oahu, Maui, Hawaii and Kauai.

In support of that requirement, I have committed the State to providing these port facilities on an expedited basis and have included in my budget that is being submitted to the legislature for next fiscal year a total of $40 million.

From the Lingle draft:

I have directed my Department of Transportation along with members of my senior staff to work closely with Hawaii Superferry, Inc. to give priority attention to identifying the port facilities needed to accommodate this ferry service on the Islands of Oahu, Maui, Hawaii and Kauai.

Further, I am seeking the development of port facilities on an expedited basis and have included $40 million for Harbor infrastructure improvement in my budget for the next fiscal year specifically for this project. This budget request has been submitted to the state legislature and is pending their review at the present time.

Asked about the practice, Russell Pang, a spokesman for Lingle, noted that the Garibaldi draft was revised before being sent out. He said it is not uncommon for the governor to receive drafts of letters from people or groups who want her signature and support.

"From time to time, organizations do submit for the governor's consideration a draft," Pang said.

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Tuesday, April 8, 2008

Ride ‘really, really rough’

Ride 'really, really rough'

Superferry sails, but voyage not smooth; many suffer sickness
   MAUI NEWS         Tuesday,  April 8, 2008
KAHULUI — After a two-month layoff for repairs, the Hawaii Superferry returned to Kahului Harbor on Monday with a load of passengers facing no protests except the one in their bellies.

"It was one of the most miserable rides I've ever had," said Kim Lane of Seattle.

She and other family members were part of the first set of passengers disembarking from the 350-foot Alakai after it arrived at Kahului. They said they dealt with high swells and rough seas for most of the three-hour-plus sail between Oahu and Maui. Those conditions caused many passengers to fall ill.

Terry O'Halloran, Superferry director of business development, disputed the report of many passengers being severely ill on the voyage, although he admitted the Honolulu-Kahului leg was rough.

He said it had been a good voyage. The vessel was bounced by swells and strong trade winds in the channels between islands, but it was "much calmer" on the downwind Kahului-Honolulu return trip.

Passengers arriving in Kahului said many of them were puking during the ride.

"The crew was really trying to keep things clean, but there were vomit bags all over the place," said passenger Monica Bishop in describing her ferry ride.

"You open the bathroom door and there's puke on the sink," said Brian Driscoll, a ferry rider from Fargo, N.D., who said he was among those who avoided illness.

"There were sick people all over the place," he said.

Lane quickly added that Superferry crew members were friendly and cheerful, despite showing signs of seasickness themselves.

"It was really, really rough. . . . It was so bad you thought you were going to fall out of your chairs," said Bishop, who rode the ferry with her husband, Doug, and four children. The family plans to move from Oahu to Maui and decided to use the next week and a half looking for a place to live on the Valley Isle.

Immediately after coming ashore, a Bishop son declared he would not return to Oahu on the ferry. He eventually relented after his father, a former sailor, agreed to ride it again despite Monday's bumpy sail.

"They're going to ride it again for redemption," Monica Bishop joked.

The Bishops noted they had paid a "little extra" to ride at the front of the ferry, hoping for a smooth sail. "Instead you paid extra to get a little sick," Doug Bishop said.

The Alakai went out of service Feb. 13 and into dry dock for repair of auxiliary steering rudders that had developed cracks where the rudder posts enter the hull.

The repairs were prolonged when a tug damaged the ferry's hull while aiding it into dry dock, and again when the ferry was damaged in the dock.

O'Halloran declined to describe what happened in dry dock, but said Monday, "It all got repaired. It's in great shape."

Late last week, the Superferry announced it would renew its voyages to Maui, extending a special $39 one-way passenger fare and $55 one-way vehicle fare for travel through June 5. The ferry departs Honolulu at 6:30 a.m., arriving at 10:15 a.m. in Kahului. It departs Kahului at 11:15 a.m., with a 2:15 p.m. scheduled arrival at Honolulu Harbor.

O'Halloran said Monday's load of vehicles and passengers was expected to be light as it returned to an interisland travel market in turmoil following the failure of Aloha Airlines a week ago.

"Reservations are open through the first week in January," he said.

He would not reveal passenger numbers but said he met a number of people taking advantage of the ferry's ability to carry vehicles, including a Maui woman who was purchasing a car on Oahu and an Oahu resident who expected to buy a used car on Maui.

The Bishops' 16-year-old son, Greg, said he looked forward to a return voyage in a week or so.

"I thought it was fun, and I'd ride again," he said.

When the Superferry first launched last August, it was greeted at the Kahului Harbor with protesters waving handmade signs. Demonstrators criticized the state's decision to allow the operation without an environmental impact statement and claimed the vessel presented a threat to whales.

Monday saw neither signs nor protesters.

Irene Bowie, executive director of the Maui Tomorrow Foundation, showed up for the ferry arrival mostly out of curiosity.

Bowie said she was surprised to see the Coast Guard accompanying the Superferry into the harbor given the lack of protesters.

"All of this at a cost to taxpayers," she said. "I think it's either overkill or paranoia."

A Coast Guard spokesman confirmed that the federal agency had sent out an 87-foot patrol boat and a 25-foot rigid-hull vessel to accompany the ferry into the harbor starting from about a mile offshore.

"This is a very common occurrence for the Coast Guard," said Petty Officer Michael De Nyse.

When Superferry resumed service in November, the Coast Guard declared a security zone over virtually all of Kahului Harbor, but eased the restriction to a 100-yard standoff distance after a week of operations.

De Nyse said he could not comment directly in response to Bowie's criticism that the Coast Guard presence Monday was excessive. He did say the agency's actions were a means of ensuring safety of the ferry, its passengers and individuals who might be in the water when the Alakai sailed into harbor.

Maui's protest of the Superferry mostly has been held on Kahului streets and in the Wailuku courts.

Hawaii Superferry still has not announced any plans to resume sailing to Kauai, where service was suspended because of protests at Nawiliwili Harbor.

On Monday, retirees Francine and Gaudie Bugtong came to the Kahului shore to welcome the Superferry. Gaudie Bugtong took photos of the ferry with his cell-phone camera.

"Someday I like to try to ride," he said.

Francine Bugtong said she was curious about the fuss over the ferry and wanted to take a closer look.

"For me, it's interesting and it's nice. I'd like to ride it someday too."

Sonny Kaupe of Kahului happened to be shoreline fishing with granddaughters Shanice, Macie and Destiny when the ferry arrived. "As long as I can come out here and fish, I'm OK with it," Kaupe said.

Texas visitor Bertha White was enjoying the Kahului ocean view before heading to Lahaina.

"I think it's a great idea to have this here," she said. "It's worked in the northeast of the United States, and I don't think there'll be a problem here."

Bowie said her group and others will continue to fight the Superferry's presence in Hawaii. Maui Tomorrow, the Sierra Club and the Kahului Harbor Coalition were plaintiffs in a 2004 civil suit that went to the Hawaii Supreme Court. The high court issued an Aug. 23 decision requiring the state Department of Transportation to prepare an environmental assessment on $40 million worth of harbor improvements needed to accommodate the ferry operations.

The day after the Supreme Court ruling, Hawaii Superferry announced it would initiate service to Maui and Kauai on Aug. 26, offering a $5 fare special. On Maui, 2nd Circuit Judge Joseph Cardoza issued a restraining order Aug. 27 and later issued an injunction blocking ferry operations until the state Transportation Department could prepare an environmental assessment.

On Kauai, protesters in the water prevented the Alakai from entering Nawiliwili Harbor on Aug. 27, and Superferry ceased its operations to both islands.

When Cardoza ruled the ferry could not operate until an environmental assessment was completed, Gov. Linda Lingle called a special session of the state Legislature to approve a law to allow the Superferry to operate while the Transportation Department prepares an environmental impact statement.

Bowie said the citizens groups are concerned about the potential for ferry passengers and their vehicles spread to invasive alien plants and bugs; for the high-speed ferry striking humpback whales; and for disembarking vehicles increasing congestion. In a separate case, Maui Tomorrow and the Kahului Harbor Coalition won a court order requiring the state to monitor traffic flows when the ferry is in port.

The community organizations claim that the new state law allowing the ferry to operate while an EIS is prepared is unconstitutional.

"All the issues remain," Bowie said.

• Staff Writer Harry Eager contributed to this story. Claudine San Nicolas can be reached at

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Saturday, April 5, 2008

Superferry returns to service Monday

See highlighted items below.

The Honolulu Advertiser     April 4, 2008

Superferry returns to service Monday

By Christie Wilson,   Advertiser Neighbor Island Editor

Hawaii Superferry will return to service Monday,
soothing some concerns about interisland travel
options in the wake of this week's shutdown of
Aloha Airlines passenger flights.

However, Superferry president and CEO John
Garibaldi yesterday said the sooner-than-expected
return of the company's high-speed catamaran
Alakai is not related to the Aloha situation.

The vessel, capable of carrying 866 people and
282 cars, was in drydock for repairs for six
weeks and wasn't expected to resume
Honolulu-to-Maui voyages until April 23. It is
now back at Pier 19 at Honolulu Harbor and ready
to sail, Garibaldi said.

"She came out of drydock a week ago, so our
intent, with our $85 million investment, was to
get her back working as quickly as possible.
Aloha had nothing to do with our return to
" he said.

"With all the trials and tribulations over the
past six or seven weeks, we're eager to get back
in service."

More than half the company's 300 employees were
furloughed while the Alakai was in drydock, and
most will be back on the job by Monday, Garibaldi said.

Hawaii Superferry has extended its promotional
one-way fares of $39 per passenger and $55 per
vehicle for travel through June 5, with the fuel
surcharge waived.

The Alakai is scheduled to depart Honolulu at
6:30 a.m. daily and arrive at Kahului Harbor at
10:15 a.m. The return voyage is scheduled to
depart Maui at 11:15 a.m. and arrive in Honolulu at 2:15 p.m.

Before going into drydock, Superferry was              NOTE:   It was actually going at about
carrying only a third of its anticipated passenger    16% of capacity.  How can 
load. The ferry also suffered from the                            HSF even think that there will be enough
effects of rough winter seas that resulted in 14                traffic for two voysges each day to Maui?
days of cancellations since its relaunch Dec. 13.

Although the Aloha shutdown caused upheaval for
the air carrier's passengers and employees, the
situation could prove advantageous to the new
interisland ferry as more people appreciate the
need for a transportation alternative. A
predicted rise in interisland airfares also could
work to Superferry's benefit.

At the time the company established its pricing
in 2004, roundtrip interisland airfares were
close to $200 and higher. By comparison, a
roundtrip on the Superferry was priced at about
$100, plus a fuel surcharge.

When newcomer go! airlines sparked a fare war
with Hawaiian Airlines and Aloha in 2006, tickets
dropped to as low as $19 - even $1 in rare
promotions. The cheapest airfares remained at
about $40 to $50 up until the end of Aloha
passenger service on Tuesday.

Garibaldi said that when the high-speed ferry was
under development as a business concept from 2002
to 2005, the state had two principal interisland
air carriers, and Superferry's objective was "to
provide another option for people to travel in a
different mode that was complementary to the

"The Superferry was always a very, very sound
option for people. It's just unfortunate we got
into somewhat of an unrealistic marketplace that
didn't reflect the reality of the situation. If
you have an interisland airline losing tens and
hundreds of millions of dollars in a short time,
it's something that's not sustainable," he said.

A former executive with both Aloha and Hawaiian,
Garibaldi said he was saddened but not surprised
by the past week's events.

"These are difficult times with the credit
market, and Hawai'i historically has been able to
have only two airlines. When you have a third,
something is going to happen eventually. ... It's
unfortunate that it took a toll the way it did,"
he said.

Superferry is still hoping to start a second
daily roundtrip to Maui by late spring,
said, and eventually return to Kaua'i,
opposition to the ferry has been most passionate.

"People have seen ideas about our service
clarified, and there's been a real benefit coming
out of the oversight task force" set up by a new
law allowing the ferry to operate while an
environmental review is conducted.

"We're confident that over time, we'll be serving all four islands."

Superferry is planning to begin service to
Kawaihae on the Big Island when a second ship
goes into service next year.