Norwegian claims ships

By Kelly Yamanouchi
Advertiser Staff Writer

Norwegian Cruise Line is buying materials and equipment from two vessels that had been under construction for the Hawai'i market as part of now-bankrupt American Classic Voyages Co.'s defunct "Project America" shipbuilding program.

The 2,000-passenger ship is scheduled to be completed in spring 2004. Norwegian officials yesterday declined to say where the ship might sail.

The purchase marks the end of what had been an ambitious, $880 million program to revive the U.S. shipbuilding industry with the construction of the ships in Pascagoula, Miss., and comes as Norwegian in recent days has indicated its interest in possible expansion in the Hawai'i market.

"It was a business opportunity that makes sense for the company," Norwegian spokesman Steve Hirano said yesterday of the purchase of the ship materials and equipment.

Norwegian will take possession of all the structures and materials for both vessels Sept. 30 and said it is in advanced discussions with European shipbuilding yards to determine where it will complete the first ship with a modified design.

The company will "explore the feasibility of completing the second vessel" once construction of the first vessel begins, said Norwegian spokeswoman Susan Robison. "Right now we haven't announced anything that we're going to do with it."

Norwegian will send the hull of a vessel, formerly owned by now-bankrupt American Classic Voyages, to a shipyard in Europe. No decision has been made on whether to complete construction on a second vessel purchased by Norwegian. Advertiser library photo • Aug. 13, 2001

But American Classic filed for bankruptcy last October and the federal government ended its nearly $1 billion in loan guarantees for the project. Northrop Grumman stopped construction with the first ship about 40 percent complete. Taxpayers are on the hook for more than $180 million.

The U.S. Maritime Administration conducted an auction for Northrop Grumman's uncompleted cruise ship and materials in May, then directed Northrop Grumman Ship Systems to dispose of the vessel.

Northrop Grumman said about 350 of its more than 17,000 shipbuilders are preparing the ship for launch and towing.

Last week, Inouye's office said that it is in discussions with Norwegian about possible exemptions to the Passenger Services Act, which requires ships sailing within U.S. ports to be U.S.-built, U.S.-flagged and U.S.-crewed. A spokeswoman for Inouye's office could not be reached yesterday.

Norwegian has declined to offer details, but has said discussions with Inouye center around possible expansion of its service in the Islands.

Yesterday, Hirano said discussions on the purchase of the ships from Northrop Grumman did not involve completing the ships' construction in the United States. Hirano also said Inouye was not involved in discussions with Northrop Grumman.

"We just alerted Senator Inouye to the fact that we were in discussion with Northrop," Hirano said.

Norwegian currently runs the Norwegian Star, a 2,240-passenger vessel that sails seven-day cruises between the Hawaiian Islands and Fanning Island, and has said it will begin sailing 10- and 11-day cruises with the 1,748-passenger Norwegian Wind in Hawai'i from September through April.

Some former employees of American Hawai'i Cruises' Independence in Hawai'i have said they are hopeful that a ship will begin sailing with a U.S. crew in Hawai'i.

"We need an American-crewed, American-owned, American-flag ship. There's not any in the entire world right now," said Danny Glover, who worked on the Independence as a waiter. "When I saw it leave Honolulu Harbor, man, it tore me up pretty good."

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.