In a report released today, the state auditor found that legislation that helped Hawaii Superferry compromised the state's environmental laws and set a worrisome precedent that put the interests of a single company ahead of state responsibilities.

The auditor also found that $40 million in state harbor improvements for the Superferry project could be in question if Superferry configures both of its high-speed catamarans with on-board ramps that could used as alternatives to the state's ramps and barges.

The audit was required as part of a law passed last year that allowed the ferry company to resume operations while an environmental impact statement is completed.

The first phase of the audit, released in April, found that the project was driven by deadlines imposed by Superferry and Austal USA, the Alabama-based builder of the two ferries. The auditor found that the process undermined the state's environmental review law.

Tomorrow, the state Supreme Court is scheduled to hear arguments in a legal challenge to the Superferry legislation brought by environmentalists.