When all is said and done, officials say, the state will have spent nearly $71 million to help the Hawaii Superferry — a privately owned company that went kaput eight years ago after briefly providing interisland service.
The bulk of those costs, some $45 million, funded the ramp and barge systems used to load and unload vehicles from the Superferry’s high-speed catamaran, the Alakai, as well as other capital improvements, according to a report released by the state auditor’s office Wednesday. The state also faces $24.6 million in interest on the bonds for that work, plus some other costs, the report found.
While the state has already paid off most of those costs, it will continue to pay the $32.6 million that remains through 2028, according to the report.
The Superferry shut down in March 2009 after providing service between Honolulu and Kahului for nearly a year and a half.
The report comes as local transportation officials weigh whether to proceed on a new interisland ferry system. State leaders appropriated $50,000 to the Hawaii Department of Transportation last year for a feasibility study, and the state also received $500,000 from the U.S. Department of Transportation to assess different scenarios for a ferry.
“We felt it was important (and) would be interesting for the Legislature (and) for the public to know the cost of the Hawaii Superferry, especially because some of those costs are still to be paid,” state Auditor Les Kondo said Wednesday.
“The timing was good for us to look at the final tally … to provide what we thought was good information as the decision-makers decide what to do next,” he added.
Other key findings in the auditor’s report included:
>> The state paid $38.1 million for the barges and ramps but sold them for only $382,500 after the Superferry shut down, recouping just 1 percent of the original cost. That’s because the barges were built in China and couldn’t be converted to U.S. domestic cargo carriers under the Jones Act. Also, they had been designed specifically for Superferry use.
>> The state paid $443,000 for repairs to the Superferry’s barge at Kahului for damage caused by storm surge and high winds. The state’s contract with Healy Tibbitts Builders, which provided the barges and ramps, required the equipment to be “extremely reliable and operate through all kinds of weather conditions, including storm surge conditions,” the report stated.
>> The state DOT paid more than $500,000 for a tugboat to help secure the barge while unloading the Superferry in Kahului Harbor between December 2007 and September 2008, after the U.S. Coast Guard expressed concerns about the system’s instability. However, the Superferry never reimbursed the state agency.
The state DOT initially opposed paying for the Superferry’s barges and ramps because the agency had a clear policy exempting it from funding such improvements, the report states. “However, after a meeting with then-Gov. Linda Lingle’s office, DOT reversed its position,” it added.
The Superferry system launched on Aug. 26, 2007, to Kahului, but was blocked later that day by protesting swimmers and surfers at Kauai’s Nawiliwili Harbor during its second trip of the day.
The next day, Maui Circuit Judge Joseph Cardoza issued a temporary restraining order that halted service.
The Hawaii Supreme Court subsequently ruled that the DOT should have required additional environmental reviews for the Superferry project. Lingle then called lawmakers into a special session to pass a law to allow the Superferry to continue to operate while an environmental impact statement was performed.
The Superferry resumed service to Kahului in December, but in March 2009 the state Supreme Court ruled that the law passed by the Legislature during the 2007 special session was unconstitutional. That decision forced the Superferry to halt operations again, and the company entered bankruptcy on May 30, 2009.
Star-Advertiser reporter Kevin Dayton contributed to this report.