ASSOCIATED PRESS / AUGUST 2001 Scaffolding towered over an uncompleted cruise ship at Ingalls Shipyard in Pascagoula, Miss., when work stopped last year. Norwegian Cruise Line said it will buy the ship and another unfinished vessel.

Norwegian buys
unfinished ship hulls

The cruise ships had been
destined for Hawaii service

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By Dave Segal
dsegal@starbulletin.com

"Project America," the ill-fated cruise ship venture destined to end up in Hawaii, is about to become "Project Europe."

Norwegian Cruise Line, which operates the Honolulu-based Norwegian Star, said yesterday it is buying all the structures and materials of the two unfinished vessels from Northrop Grumman Ship Systems and transporting them to a yet-to-be determined European shipyard. The purchase price was not disclosed.

The Miami-based cruise line said one of the ships, which is half completed, currently consists of a hull and will be modified from its original design. It is due to be delivered in the spring of 2004 in time for the summer season. Minimal work has been done on the second ship and material had been ordered.

Norwegian spokeswoman Susan Robison would not speculate about where the first of the two ships would be based.

The company said yesterday that the future of the second ship would be evaluated once construction on the first ship gets under way. Norwegian said its assessment would be based on the work completed so far and the material that has been ordered.

"The acquisition of the 'Project America' assets was prompted by the success of 'freestyle cruising,' the tremendous reception we have had to (2001 ships) Norwegian Sun and Star, and the need to add ships as soon as possible after the delivery of Norwegian Dawn, our last scheduled new build, in December 2002," said Colin Veitch, president and chief executive officer of Norwegian.

Freestyle cruising allows guests no fixed meal times, no assigned dining companions, resort-casual dress code, no cash tipping, and a relaxed resort-style ambiance.

Norwegian's purchase signals the end of a controversial U.S. Maritime Administration-backed program intended to pave the way for the first U.S. cruise ship construction in 40 years. The program, in which the Maritime Administration guaranteed loans of $1.08 billion to American Classic Voyages Co. to build two 1,900-passenger ships, initially came under fire amid building delays and cost overruns.

Then, when American Classic filed for Chapter 11 reorganization bankruptcy in October on the heels of the Sept. 11 terrorist attacks, Northrop Grumman Corp. halted work at its Ingalls Shipyard in Pascagoula, Miss. Ultimately, the Maritime Administration was left scrambling for a buyer for the two ships when it became apparent that American Classic would be unable to live up to its financial agreement. American Classic ceased cruise ship operations of the Kahului, Maui-based S.S. Independence and the Honolulu-based ms Patriot upon filing for bankruptcy.

Norwegian, which will transport the "Project America" ships and material to Europe at the end of September, currently is in final talks with European yards to determine which one will complete the ship.

"We were impressed with the initial creative design of the ship," Veitch said. "Now with the changes we have made, she will be an outstanding addition to our fleet."

The new ship will feature open-seating main dining rooms, eight restaurants, an Internet Cafe, three pools, a spa, fitness center and children's facilities.

Eighty percent of the staterooms -- located on five decks -- will have an ocean view, with 85 percent of those including private balconies.

"We looked at buying the 'Project America' ships as a way of meeting our goal of adding one new ship per year to our fleet," Robison said.

Norwegian, which operates eight ships, will be relocating one of those, the Norwegian Wind, to Honolulu next month. The ship, which is coming from Alaska, will alternate 10- and 11-day cruises beginning Sept. 27. It will offer stops at Fanning Island, Hilo, Kona and Lahaina.

The Fanning Island stop, which also is on the Norwegian Star's itinerary, is required because of the Passenger Services Act that prohibits a foreign-owned vessel from picking up passengers at one American port and dropping them at another. Robison said the foreign-flagged Norwegian has had preliminary talks with Sen. Daniel Inouye regarding an exemption to that rule. Inouye introduced the special legislation that made "Project America" possible.

"We've spent millions on the infrastructure of Fanning Island and the passengers really enjoy it," Robison said. "Any discussion with the senator is about expanding our range of options in Hawaii rather than substituting one itinerary for another."

Jennifer Goto Sabas, Inouye's chief of staff, did not return phone calls.