Ferry lines up $200M in financing

By Mike Leidemann
Advertiser Transportation Writer

Hawai'i Superferry, which hopes to start an interisland ferry as a low-cost alternative to air travel, has secured more than $200 million in private and government money and is on track to begin service in early 2007, officials said yesterday.

However, the company still needs about $40 million in improvements to state harbors to make its operations a reality, according to John Garibaldi, the company's chief executive officer.

"The last remaining piece is to get the port infrastructure in place," Garibaldi told lawmakers, who this session will consider the state Transportation Department's request to use general obligation bonds to pay for the improvements.

The money would be more than paid back to the state over the next 20 years through wharf fees as well as money the company pays in state excise taxes, Garibaldi said.

Members of the House Transportation Committee worried that the ferry would take business from financially troubled airlines and cargo companies in Hawai'i, but Chairman Joe Souki said he expects the Legislature to pay for the improvements in some form.

"If we can find a good mix that helps everyone, I think we can figure out a way to pay for the improvements," said Souki, D-8th (Wailuku, Waiehu).

Hawai'i Superferry last week received a commitment from the Federal Maritime Authority to guarantee $140 million in loans the company will use to help build two $80 million catamarans capable of carrying up to 866 passengers and 282 cars on trips between between O'ahu and Maui, Kaua'i and the Big Island, charging what it says will be about half the cost of an interisland plane ticket. Travel time would be three to four hours, Garibaldi said.

The loan guarantee is dependent on the company signing harbor usage agreements with all four of its ports with the additional infrastructure, Garibaldi said.

Hawai'i Superferry also has accepted an equity investment of $58 million from the JH Lehman Equity investors company, said Garibaldi, a former airline executive in Hawai'i.

The $40 million in state funds would be used to build ramps, passenger facilities and loading barges in harbors in Honolulu, Maui, Kaua'i and Kawaihae on the Big Island.

The state Transportation Department has included funding for the improvements in its budget request for this year, but Souki said lawmakers may want to ensure that the bonds used will be reimbursed by the company or harbors division.

"That's a lot better than putting another burden on the taxpayers," Souki said.

Aaron Mattis, an escrow associate from Kailua, said he would support using government money for the ferry as long as there is a return for the state.

"It seems like a lot of money, but if we get something back for tourism and making travel easier for us, too, it would be a good thing," he said.

Reach Mike Leidemann at mleidemann@honoluluadvertiser.com or 525-5460.