Both the Norwegian Wind, shown above, and the Norwegian Star include a stop at Fanning Island to meet the requirements of the Passenger Services Act.

Senate OKs
Inouye ship plan

A provision gives Norwegian
Cruise Line Ltd. the ability to sail
3 cruise ships in isle waters

By Tim Ruel

U.S. Sen. Daniel Inouye's "Project America" cruise ship effort, which was nearly sunk in the 2001 bankruptcy of American Classic Voyages, could head back to Hawaii under a proposal that survived a U.S. Senate vote yesterday.

Inouye has put a provision into the federal government's long-overdue $390 billion spending bill that would allow Norwegian Cruise Line Ltd. to re-flag three foreign-flagged cruise ships as U.S.-flagged ships. The ships, two of which were once part of the "Project America" plan, could set sail in Hawaii starting next year.

There was no coincidence that Inouye put the provision into the spending bill. President Bush has urged the Republican-led Congress to pass it by the end of the month.

"We put it in because it is the fastest vehicle and something that will definitely pass," said Jennifer Sabas, spokeswoman for Inouye.

The proposal calls for the ships to be staffed by American workers, creating up to 3,000 jobs and $300 million in federal tax revenues by 2007. No federal funds would be used.

The proposal dates to 1997 exemptions to federal law, introduced by Inouye, that paved the way for American Classic Voyages to run foreign-built, American-flagged ships in Hawaii while building two domestic vessels. American Classic also got a $1.1 billion loan guarantee from the U.S. Maritime Administration.

But American Classic filed for Chapter 11 reorganization bankruptcy in October 2001, and the Maritime Administration withheld its loan guarantee.

Norwegian Cruise Lines bought the two unfinished vessels and sent them to Europe to finish construction.

Norwegian said yesterday that it is willing to run the two ships in Hawaii, along with an as-yet-unidentified third ship. Norwegian said it worked with Inouye's office to address his concerns about staffing the ships with American employees, and his concerns about U.S. labor, health, tax and environmental laws.

Norwegian has been cruising Hawaii for six years, and runs Hawaii's lone home-ported ship, the Norwegian Star, as well as the Norwegian Wind. Both are foreign-flagged vessels.

Both the Star and Wind include a Fanning Island stop to meet the requirements of the Passenger Services Act, which prohibits foreign vessels from moving passengers between American ports. Norwegian had been talking with Inouye about an exemption to the law.

As U.S.-flagged vessels under Inouye's proposal, the "Project America" ships would not have to stop at Fanning Island, which is about 1,200 miles south of Honolulu in the Republic of Kiribati.

U.S. Sen. John McCain, R-Ariz., who has tangled with Inouye over the granting of special favors to individual cruise lines, made a motion to strike the Norwegian cruise provision, but the move was defeated in a 62-33 Senate vote yesterday.

In the House the proposal could face opposition, especially since Norwegian's competitors may not be happy, Sabas said.

A manager of corporate communications for Royal Caribbean declined comment. A Celebrity Cruises spokeswoman could not be reached for comment last night.

"We will have to work our colleagues in the House," Sabas said. "We're going to give it our best shot."

Gov. Linda Lingle discussed the proposal yesterday with Inouye and said she thinks it is a great idea. "I think he is pretty excited," Lingle said.

Cruise ship visits to Hawaii have jumped in the past year, though state lawmakers have complained that foreign-flagged ships use cheap labor from other countries.

The first U.S.-flagged "Project America" ship, slated to enter service next year, could create 700 American jobs in Hawaii and pay an estimated $85 million in annual wages, Inouye said.

Though growing in popularity, cruise ships account for only about 3 percent of Hawaii's visitors.

Norwegian Cruise Lines

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