Norwegian's cruise ship will be finished after all

By Kelly Yamanouchi
Advertiser Staff Writer

After a string of bad luck, Norwegian Cruise Line's Pride of America cruise ship finally got some good news.

The 2,156-passenger vessel being built to cruise among the Hawaiian Islands was refloated Sunday, one month after sinking at its construction dock in Germany.

The Pride of America started out at a Pascagoula, Miss., shipyard as the first cruise ship to be built in the United States in more than 40 years. When American Classic Voyages went bankrupt in 2001, the ship was sold as an unfinished hull to Norwegian and towed to the Lloyd Werft shipyard in Bremerhaven, Germany, for completion. In January, a storm left the ship listing 15 degrees and raised doubts whether it would ever be finished. Last week, the mounting problems with Pride of America forced the German shipyard to file for court protection from creditors.

Lloyd Werft managing director Werner Lueken said yesterday the ship is out of the water, there was no damage to the hull and it will be finished.

"That's great," said Doug Arnott, who owns Arnott's Lodge and Hiking Adventures in Hilo, Hawai'i, and — as with dozens of tour operators, hotels, airlines and maintenance companies — was counting on the Pride of America to add to his business.

"There was a factoid going around at one point that the whole thing might have to be scrapped and started over," said Arnott, "which would have been a disaster. It's not just Norwegian, it's Hawai'i that needs nice new ships. We do a lot of business with them, and they make a huge difference to us in Hilo."

After the ship took on water and listed 15 degrees during the Jan. 14 storm, Norwegian said the job of refloating should only take a matter of days, but the task proved to be more difficult than expected.

The ship was refloated Sunday and moved to a dry dock.

"She is high and dry," Lueken said. "She looks much better."

Lueken said the shipyard yesterday started investigating the scope of damage and the cause of the sinking.

It will be at least a week before Lloyd Werft can determine the cost of repair and how long it will take to fix.

"I am very happy that we made this step, and I look forward to completing this vessel in our yard," Lueken said. "It can be fixed, oh yes, no doubt about that. There is no damage to the hull and things like this."

Norwegian was scheduled to pay about 37 million euro, or close to $47 million, due 150 days before delivery of the ship, dictated by progress in its construction, said Robert Kritzman, senior vice president for NCL America, Norwegian's company for U.S.-flagged operations.

But because Lloyd Werft could not certify progress after the storm, Norwegian did not make the payment, leading to the insolvency of the shipyard. The shipyard continues to operate under court protection, much like a Chapter 11 bankruptcy filing.

The Pride of America was originally scheduled to begin Hawai'i cruises in July, but after the January storm, Norwegian substituted the Pride of Aloha. Norwegian hoped Pride of America would be added to its Hawaiian fleet by October, but the sinking could delay that until later in the year or next year.

Norwegian, which last year secured a federal exemption allowing it to put U.S. flags on foreign-built ships to avoid a foreign-port stop, is required to employ U.S. crews for those ships and has said it plans to hire 3,000 U.S. employees, most from Hawai'i, for a total of three U.S.-flagged ships that it will operate in Hawai'i by 2007.

For Norwegian's more than 1,100 new hires waiting to hear about when the ship will be ready, the refloating is welcome news.

Norwegian's Kritzman said yesterday the ship's equipment has been covered with salt from being immersed in ocean water and must be cleaned to prevent corrosion. He expects main engines will need to be broken down and rebuilt but can still be used.

If the ship's construction is delayed by more than six months, Norwegian is not contractually obligated to take delivery of the ship, Kritzman said, "but regardless we intend to complete the ship."

He said the cost of repairs to the ship is covered by insurance but lost revenue is not.

Norwegian will continue discussions with insurers and Lloyd Werft over the cost and process of repairs.

"The sooner the better, from our perspective," Kritzman said.

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