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The Honolulu Advertiser
Posted on: Friday, September 14, 2007

Superferry considers pulling out of Hawaii

 •  Former Haleakala head urged Superferry EIS
StoryChat: Comment on this story

By Derrick DePledge
Advertiser Government Writer

Hawaii Superferry executives have told the state Senate they need to know within the next six weeks whether they can operate or they may have to leave the Islands.

Superferry executives and state and federal officials have warned of the financial consequences of delaying ferry service but had not publicly described a timetable.

"My understanding is that they have staying power for a month outside, a month-and-a-half," said state Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), who spoke with Superferry executives recently at a meeting in her state Capitol office.

A Superferry spokesman declined to elaborate last night but did not dispute the six-week timetable.

In an earlier court declaration on Maui, John Garibaldi, the Superferry's chief executive officer, said ferry service was intended to be the "source of substantially all of our revenues. Without revenues, Hawaii Superferry will be unable to pay its current operating expenses (payroll and outside contract services, fuel, maintenance and other expenses), make the payments on the debt it has incurred to build the ferries and will be unable to furnish any return on the investments that have been made in Hawaii Superferry."

In Maui court today, Superferry attorneys are expected to call a witness from the federal Maritime Administration, which has backed ferry construction with $140 million in loan guarantees, about the financial impact of a delay. The Maritime Administration has previously warned the court about the threat of a default that could expose the federal government to paying the debt.

Hanabusa said yesterday in an interview that she hopes to meet with state Attorney General Mark Bennett this weekend to discuss in detail the possibility of a special session of the state Legislature on Superferry. Hanabusa and Bennett have already spoken informally.

Hanabusa and state House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), said they would likely not call a special session on their own. Gov. Linda Lingle would have to use her powers to call lawmakers back to the Capitol and, several sources said, there likely would have to be an outline of a Superferry compromise that Senate and House leaders could take to their caucuses.

Hanabusa acknowledged that environmentalists and others who have challenged Superferry in court may be angered by even the talk of a special session, but she believes lawmakers and the Lingle administration should have the conversation.

"I think, before it gets out of hand, we at least at the very minimum owe everyone a discussion," Hanabusa said.

Among the issues is whether a special session should be called before courts on Maui and Kaua'i rule conclusively whether the Superferry can resume ferry service while the state conducts an environmental assessment required by the state Supreme Court.

The Maui court has held hearings all week and the Kaua'i court has scheduled hearings starting Monday.

Hanabusa said a starting point for a compromise may be a Senate proposal opposed by Superferry and the state and rejected by the House last session that would have allowed Superferry to launch ferry service while an environmental impact statement was done on state harbors.

Several other Senate and House leaders said yesterday that it is premature to talk about a legislative compromise until the courts rule. Some lawmakers, including some who favor the Superferry project, also said they would oppose a special session as a bad precedent for handling controversial development projects.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), who had offered the Senate proposal that was rejected last session, said circumstances have changed since the Supreme Court's ruling.

"The purpose of that bill was to make them do an EIS," Hooser said. "What's being talked about now is a bailout."

Hooser said if a special session is called, he would likely insist on a full environmental impact statement as a condition of allowing Superferry to resume service. He said Superferry executives have from the beginning used arguments about financial pressure as leverage in talks with the state.

"If we go down that path, we have to look at the costs on both sides," he said. "We can't just look at the money the Superferry is going to lose. We have to look at the other side of the situation and what it's going to cost the environment."

State House Majority Leader Kirk Caldwell, D-24th (Manoa), who supports Superferry, said the question should be left to the courts. He said he might consider a special session to address broader questions of state environmental policy, but believes it would be "bad public policy" to come back solely for Superferry.

Caldwell said that while many have described the Superferry's situation as a mess that has damaged the state's image, he sees it as an example of democracy. "The executive and legislative branches had their chance. Now, the judiciary branch has its chance," he said.

But state Sen. Robert Bunda, D-22nd (North Shore, Wahiawa), said a special session is appropriate and that many lawmakers have favored the project, backing $40 million in state harbor improvements for the ferry. "I would do it. I think the law needs to be clear," Bunda said. "I think now is just as good as later.

"You have Superferry ready to rock and roll."

A special session would likely have wide public interest and could force lawmakers into politically difficult votes. Already, in street protests, letters to newspapers and Internet discussion boards, the Superferry fight has shown how some in the Islands are frustrated by growth and territorial about protecting the Neighbor Islands from urbanization.

Hanabusa said the debate has become so fevered that some people are not going to be satisfied no matter the outcome. She also said she has heard criticism about a leadership void over the past few weeks as people have reacted to the court rulings and protests.

Lingle attempted to step into that void Wednesday with a warning to protesters on Kaua'i not to interfere with the ferry after authorities cleared it to return to Nawiliwili Harbor on Sept. 26 unless the courts rule otherwise.

Hanabusa said she called Bennett, the attorney general, to broach the subject of a special session or other state options because she said there had been no discussions between the Lingle administration and the Legislature.

"The people who want no Superferry are not going to be happy even with the fact that you and I are having this discussion," Hanabusa said. "And the people who want Superferry are not going to be happy that we're not saying firmly that we're going to do it."

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.