Thursday, December 27, 2001

Air merger could
spur ferry service

State officials say they are willing
to discuss possible endeavors

By Lisa Asato

The pending merger between Aloha and Hawaiian airlines pushes interest for an interisland ferry "one notch higher," according to state Senate Transportation Chairman Cal Kawamoto.

"Now with the airlines situation, (people are going to be asking) have we done anything with the interisland ferry," Kawamoto (D, Waipahu-Pearl City) said last week after the two airlines announced plans to merge, pending regulatory approvals. "If there's companies out there, we're willing to listen."

At least one company, Rainbow Island Express, says it could start an interisland ferry system transporting passengers and their cars -- with rates competitive with airlines -- within two years.

But more may be on the horizon.

State transportation planner Julia Tsumoto said in addition to an interisland ferry, the department has also been talking with operators to initiate a West Oahu-to-Honolulu commuter ferry.

Tsumoto said when the WikiWiki Ferry pilot project ended a year ago this month, "residents on that side that were using it were so disappointed, they circulated a petition to say they really would want a system like that continued."

Ideally, the department would like to see the commuter ferry run to Aloha Tower Marketplace from Iroquois Point, which tested most favorably among three sites, including Kalaeloa (formerly Barbers Point) and Middle Loch. But security concerns at the Navy site may hinder that possibility, she said.

"After Sept. 11, I don't know whether we would be able to secure the location on the outskirts of Pearl Harbor," she said. "Those things are kind of up in the air. There's some approvals we would have to investigate."

Tsumoto said unlike the commuter ferry, which would probably have to be subsidized by the state or city, the interisland ferry would be a "purely business arrangement."

"If there are operators out there that think they can fill a need or market, then we would be willing to work with them to provide the facilities."

The state, she said, is considering proposals of a roll-on/roll-off system similar to those in mainland cities such as Seattle, where passengers drive their cars onto a ferry, sail across the waterway and drive off at their destination.

Tsumoto emphasized that talks are in the "preliminary concept stage" for both interisland and commuter ferries.

"We're still in dialogue," she said. "We haven't zeroed in on specific projects we're going to go in for."

Last year, state lawmakers and the governor approved nearly $44.5 million in special-facility revenue bonds for harbor improvements. Those bonds were specifically linked to interisland and intraisland ferry systems that would be operated by Rainbow Island Express, a local subsidiary of the Rainbow Transportation Group of Las Vegas.

Under the terms, the company would be responsible for repaying the bond in the form of rent.

William E. "Matt" Dillon, president of Rainbow Transportation, said his company wants to operate both the commuter and interisland ferry systems because the commuter ferry alone would not be profitable. With profits from the interisland ferry, he said, Rainbow would not need any state or federal subsidy.

The 100-foot-long commuter ferry would carry from 70 to 75 passengers. That could start in nine months, he said.

Dillon said the ferry would start at Kalaeloa and stop at Ewa Beach before heading to Honolulu. In the beginning, it would involve three trips each in the morning and afternoon, "then grow to double that as we add more vessels and users increase."

He is also exploring the idea of running a ferry from Hawaii Kai to downtown via a Waikiki stop, he said.

The interisland ferry system requires more infrastructure work and would start in 18 to 24 months, he said. That infrastructure work includes improvements of existing harbors at Kalaeloa, Honolulu and Kawaihae.

"On Molokai and Maui we'd probably more or less start from zero," he said, adding that the terminals would have to be big enough to handle a 200-foot-long vessel carrying 250 to 300 people and 50 vehicles.

Dillon said the system would start off with one ship serving Oahu, Molokai and Maui, and then expand to the Big Island in the next year or two.

Travel time between Maui and Oahu would take about two hours, he said. "From the time people leave home to the time they get to the destination, it would be equal to or less than airlines because of parking and much easier check-in and boarding," Dillon said.

And, he added, prices would be competitive with the airlines.

"We don't have a firm price yet, but it would be a good percentage less than the air fare," he said. "We're thinking probably somewhere $100 round trip per adult and children 8 to 16 half price and under 8 free," he said. Discounts would be offered for seniors, military personnel and schools, he said.

But before any of that can happen, the state revenue bonds have to be issued.

"We have to get everything coordinated with the (Transportation Department): exactly where the terminals will be located, routes, service. ... Once we get all those details worked out, then we can move forward with the funding," he said.

Dillon also said he is awaiting terminal leases from the state before he buys ferries for either system.

Tsumoto declined to say whether the state prefers having one operator handle both the intraisland and interisland ferries. She did say that Rainbow was one of two companies that had expressed interest in operating an interisland system.

Steven Loui, president of Pacific Marine & Supply Co., which handled the WikiWiki Ferry, said his company has been talking with the state about operating a commuter ferry.

"A lot of the future for an intraisland ferry depends upon getting a terminal at Iroquois Point, Kapolei area, Ewa side," Loui said. "And if the state can secure a good ferry terminal with adequate parking and piers, then we certainly would be interested in looking into setting up a ferry system."

Of the three test sites, the WikiWiki Ferry project found the Iroquois Point-to-Honolulu route to be the most feasible, Loui said. But because the area is under Navy control, parking was not available, and people had to be bused in from Ewa Bowl, he said.

"It was not convenient having people parking elsewhere and busing them down," he said.

As for interisland ferries, Loui said his company believes a market exists.

The problem is technology, he said. "Until someone improves that technology ... (so) it can be done with the right comfort and economics, it's kind of a moot point to talk about establishing one," he said. "It's kind of like starting an airplane service before inventing the airplane."

Steven Knight, president of Expeditions, which has run daily ferry trips between Lahaina and Lanai since 1989, said the roll-on/roll-off system may be a welcome commodity.

The system would not be beneficial for Lanai, which has about 30 miles of paved road, he said, but it may be popular for someone on Maui to drive their car onto a ferry, take a three-hour ride to Oahu and do their shopping. "That could be a popular situation," he said, "but I don't know how cost-effective it could be."

As much as $5.15 million in federal funds for Hawaii ferry boats may be available to the state.

The U.S. Senate approved the funds, which could be used any way the state sees fit, including pier construction and parking, this month, said Sandi Skousen, press secretary to Sen. Daniel Inouye (D-Hawaii).

Tsumoto said the department still has to apply for the federal funds by submitting a proposal to the Federal Transit Administration. She did not know when that would occur.

"Right now we are in dialogue with some interested operators talking about (rider) interest and viability in getting a system off the ground," Tsumoto said. "Once we clear those hurdles, we will go to the (Federal Transit Administration) to tell them specifically how we intend to use those funds."

Sen. Kawamoto said ferry systems could be competitive in the islands if it offered competitive fares, comfortable rides and timely passage. He said he was hoping Rainbow would have the commuter ferry running by the end of the year, but was concerned that the revenue bonds still were not issued.

"If they're not ready and someone else is ready and can provide that same kind of service, there's special revenue bonds we can provide to whoever has the capability of doing this," he said. "All we want is the product."

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