[ OUR OPINION ]
New ship-building venture
may hit rough waterTHE revelation that a failed cruise-ship venture in Hawaii will likely cost American taxpayers about $187 million takes the sheen off a similar project now being proposed. Instead of trying to get around antiquated maritime laws that encumber the cruise industry in the islands, Hawaii's congressional delegation and state leaders should secure a permanent exemption from them.
THE ISSUE An investment firm seeks approval for a cruise ship project similar to one that was a spectacular failure and cost taxpayers $187 million.
Put into place to protect the domestic shipping industry, the laws limit transport between American ports to vessels built, owned and registered in the United States and crewed by Americans. To comply with what is generally known as the Jones Act, foreign-operated cruise ships are forced to dock at a foreign port between U.S. destinations. In Hawaii, the Norwegian Star cruise line steams to Fanning Island, 1,200 miles south of Hawaii, to conform to U.S. regulations.
A Washington, D.C.-based investment firm, D'Arcinoff Group, is seeking $1.6 billion in federal loan guarantees to build cruise ships in Maryland to sail in Hawaii and a temporary waiver of federal law so it may use foreign-made vessels in the meantime.
The proposal is comparable to the Project America program involving American Classic Voyages, which ran interisland cruises in Hawaii until it filed for bankruptcy last October. The company had been given a waiver of federal law to sail foreign-made ships between U.S. harbors while new ships were being built in Mississippi. The U.S. Maritime Administration provided loan guarantees of up to $1.1 billion. American Classic's failure halted the construction, leaving the shipbuilder with an unfinished vessel and taxpayers holding the bag.
The convoluted program was intended to get American-made ships into the cruise business when none had been built since the 1960s, all to comply with outdated laws. Its failure should be a warning shot across the bow for Congress, whose approval is now being sought for D'Arcinoff's venture.
U.S. Rep. Neil Abercrombie, who supports the proposal, should examine the American Classic debacle before proceeding. He and Sen. Daniel Inouye, who spearheaded the American Classic plan, should redirect their efforts at exempting Hawaii from the Jones Act. Eliminating a foreign stop from a Hawaii itinerary could attract financially strong cruise lines to the islands and boost a struggling tourism industry.
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