Superferry can’t wait for report, says CEO

'I can't guarantee the vessel will return if it leaves the state'

WAILUKU » The Hawaii Superferry is bleeding about $650,000 a week, the company's president testified yesterday.

That is why the company would have to transfer its vessel, the Alakai, elsewhere to earn money if it could not operate while an environmental study is performed, President and Chief Executive Officer John Garibaldi said in a Circuit Court hearing.

The hearing is on environmental groups' request for an injunction to block the Superferry from Kahului Harbor. In August the Hawaii Supreme Court ruled that the state should have done an environmental assessment for Kahului Harbor improvements made for the Superferry.

Garibaldi said allowing the vessel to voyage only to Kauai and not to Maui "would not produce enough revenue to sustain the Superferry's business model."

If the company needed to sustain revenue, it would consider reducing its staff by up to 90 percent.

Garibaldi said the weekly operational loss is $500,000, with another $125,000 a week to cover a loan payment and $20,000 in other costs, not including legal fees.

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FL MORRIS / FMORRIS@STARBULLETIN.COM Just two months ago, in August, it looked like smooth sailing for the Hawaii Superferry as CEO John Garibaldi led a trial run of the vessel from Koko Head to Waianae with passenger vehicles on board. Today the Superferry is idle, mired in controversy.

WAILUKU » The Hawaii Superferry would transfer its vessel "elsewhere to generate revenue" if it cannot operate while an environmental study is prepared, President and Chief Executive Officer John Garibaldi testified in court yesterday.

"I can't guarantee the vessel will return if it leaves the state," said Garibaldi, adding that the Superferry is losing about $650,000 a week because its vessel, the Alakai, sits idle.

Garibaldi was called to testify yesterday in a Circuit Court hearing on an injunction to stop the company from operating at Kahului Harbor while an environmental assessment is conducted.

In August the Hawaii Supreme Court ruled that the state should have done an environmental assessment for Kahului Harbor improvements.

"Permitting the vessel to operate solely to Kauai and not to Maui would not produce enough revenue to sustain the Superferry's business model," Garibaldi said.

If the company were to impose conditions to sustain revenue, he said, "we would have to look at reducing the labor force by up to 90 percent of the staff."

The Hawaii Superferry staff has gown to slightly less than 300 employees, including 35 on Maui, about 25 on Kauai and the balance working on Oahu as operational and support staff.

Garibaldi broke down the losses the company has incurred: The weekly operational loss is $500,000, the weekly loan payment is $125,000 and there is an additional $20,000 in other costs, without including the legal and consulting fees in legal battles.

Garibaldi said the events of Sept. 11, 2001, "brought home the fact that we were relying on one mode of transportation."

He said that transportation in Hawaii was down for four days, and critical transport was impaired.

"The driving force" behind the operation, Garibaldi said, was a belief that there was a lack of transportation alternatives in Hawaii.

Garibaldi pointed to his experience as an executive with Aloha Airlines in 1985 and later with Hawaiian Air in concluding that "the establishment of the Hawaii Superferry meets the needs of providing a public purpose."

When asked about previous testimony from other witnesses on invasive species, Garibaldi agreed that occasional random high-intensity inspections of vehicles utilizing the ferry service would not be objectionable.

"I would welcome doing risk assessments," he said.

Hawaii Superferry attorney Lisa Munger asked Garibaldi to explain a measure passed in the 2006 legislative session that required the company to hold informational briefings.

Garibaldi said 12 meetings were called for, but they conducted 22 statewide, with seven of them on Maui.

Isaac Hall, the attorney for environmental groups seeking the injunction, objected to the line of inquiry, saying, "Any public involvement is irrelevant to the argument because the Hawaii Supreme Court has already ruled that the public was deprived of their participation rights by the failure to prepare an EA (environmental assessment)."

Judge Joseph Cardoza overruled the objection because the two sides will later argue the information's relevance.