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The Honolulu Advertiser
Posted on: Thursday, December 17, 2009

Pasha interisle shipping bid dealt blow

BY Rick Daysog
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Hawai'i's consumer advocate says Pasha's proposal doesn't prove it will benefit the local market.

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Pasha Hawaii Transport Lines LLC's efforts to challenge Young Brothers Ltd.'s decadesold monopoly in the interisland shipping business received a major setback after Hawai'i's consumer advocate recommended that the state to reject Pasha's bid.

In a filing with the Public Utilities Commission Tuesday, Dean Nishina, executive director of the state Division of Consumer Advocacy, said Pasha has failed to prove that its new service is in the public's interest.

"Given the potential negative consequences of the applicant's entry into the Hawai'i market, the consumer advocate believes that Pasha Hawaii has failed to provide sufficient information to meet the burden of proof that its proposed service is in the public interest and is or will be required by the present or future public convenience and necessity," Nishina said.

The consumer advocate's opposition comes as food growers, state lawmakers and community leaders have raised concerns about the impact of the new service on shipping rates and the frequency of service to smaller, Neighbor Island ports.

Reggie Maldonado, Pasha's general manager, would not comment yesterday, saying the company is reviewing the consumer advocate's filing.

In March, the company filed an application with the state Public Utilities Commission to use its 579-foot ship, the MV Jean Anne, to make interisland cargo trips every two weeks, saying competition will benefit local consumers and businesses.

But Young Brothers has argued that Pasha will only serve the biggest ports and the most lucrative lines such as autos, heavy equipment and construction materials and that Pasha's rates will be higher than its rates.

Young Brothers also said that the new service will "cherry-pick" the most lucrative routes and could harm local farmers and cattle ranchers who receive discounted shipping rates subsidized by more profitable shipping goods.

Nishina said Pasha's application didn't include market or case studies about the impacts of its new service and did not provide cost information supporting the rates that it plans to charge.

Pasha also did not say how it will allocate its operating costs between its Mainland-to-Hawai'i service and its proposed interisland service, Nishina said.

Tuesday's filing clarifies the consumer advocate's position on Pasha's proposed entry.

Earlier this year, the state office said there's insufficient evidence to support Pasha's application but said it would not object to the new service unless Young Brothers could show that Pasha's entry could harm consumers.

Since the initial filing, Young Brothers provided estimates on the negative impacts of the new service, he said.