Senator Daniel K. Inouye and Governor Linda Lingle hailed the Hawaii Super Ferry as a Social and Economic benefit for the State of Hawai`i. Duke Aiona and Elwin Ahu, Mufi Hannemann and Les Chang or David Ige and Shan Tsutui will become the shepherds and stewards to make an Interisland Ferry for the State of Hawai`i reality.

1. THE HAWAI`I SUPER FERRY
THE INTERISLAND FERRY FOR THE STATE OF HAWAI`I
A ohe nana nui ka aluia
No task is too big when done together
Pupu kahi i holomua
By working together we make progress
Duke Aiona and Elwin Ahu, Mufi Hannemann and Les Chang,
David Ige and Shan Tsutsui have agreed to support an Interisland
Ferry for the People of the State of Hawai`i.
Reportedly, 87% of the individuals surveyed are in favor of an
Interisland Ferry. The actual number is closer to 92%.
The Interisland Ferry is achievable, is capable of being a
successful enterprise and is strategically a step forward for Hawaii’s
future.
ACT 213 IS NOT MATERIAL OR RELEVANT
Under Act 213 (2011), the Hawai`i Public Utilities Commission
is not allowed to issue a Certificate of Public Convenience and
Necessity that will permit a carrier to serve only high-margin or
high-profit ports, or lines of service served by an existing carrier.
The law prohibits the PUC from granting a license if there is
evidence that a new shipper would “diminish” rates of return of
existing carriers.

2. The “carrier” that SB 99, Act 213 addresses is defined by
Hawai`i Revised Statutes § 269-1 (2013).
Hawai`i Revised Statutes § 269-1 (2013) Title 15.
Transportation and Utilities, Part 269, Public Utilities Commission,
Section 269-1, Definitions provides,
(E) A carrier by water to the extent that the carrier
enters into private contracts for towage, salvage,
hauling or carriage [of containerized and/or bulk
cargo and vehicles] between points within the State;
provided that the towage, salvage, hauling, or carriage
[of containerized and/or bulk cargo and vehicles]
is not pursuant to either an established schedule
or an undertaking to perform carriage services on
behalf of the public generally.
[Clarification Supplied]
The “existing carriers” regulated by the Hawai`i Public Utilities
Commission are Pasha Hawaii and Young Brothers, Ltd.
Pasha Hawaii’s vessels are roll-on roll-off for shipments of
vehicles, trucks and containerized cargo. Pasha Hawaii’s vessels
are not passenger carrying vessels.
Young Brothers, Ltd operates a barge service for cargo and
does not carry passengers for hire.

3. THE HAWAII SUPER FERRY
Governor Linda Lingle, waiver of the Environmental Review
Process, the legal challenges by the Sierra Club, the financial
stability of HSF (Hawaii Super Ferry) Holding, Inc., individually
and collectively, are blamed for the failure of the Hawaii Super
Ferry.
The principle and primary reason for the failure of the
Hawaii Super Ferry is the Hawai`i Supreme Court’s decision of
March 16, 2009 in Sierra Club v Dep't of Transportation of State
of Hawai'i, 120 Hawai'i 181, 231, 202 P.3d 1226 (2009).
The Hawai`i Supreme Court held that Act 2 was a special purpose
law that contravened the Hawai`i Constitution requiring that any
law affecting State Lands (Kahului Harbor), specifically and
particularly the Hawaii Super Ferry dock moored to Pier 2 in
Kahului Harbor to be general in application and not favor a
specific person or class. Act 2 was designed to benefit only
Hawaii Super Ferry, an “illusory” class of one … and enacted with
the specific purpose of allowing Super Ferry, and Super Ferry
alone, to operate without satisfying the requirements…of Hawaii’s
statutes.”
This ultra-conservative, micro versioned, tunneled interpretation
was erroneous and ill begotten.
The State of Hawai`i and People of Hawai`i were the intended
principal beneficiaries. Obviously, the Supreme Court and
interpreter of the Hawaii Constitution and Hawaii Revised
Statutes overlooked,

4. “The Hawaii Constitution was framed by a Constitutional
Convention under Act 334, Session Laws of Hawaii 1949. It was
adopted by the people at the election held on November 7, 1950,
and was deemed amended when three propositions submitted to
the people in accordance with the Act of Congress approved
March 18, 1959, 73 Stat 4, Public Law 86-3, were adopted by the
people at the election held on June 27, 1959. As so amended, it
was accepted, ratified, and confirmed by Congress by the Act of
March 18, 1959. It went into effect on August 21, 1959, upon the
issuance of a presidential proclamation admitting the state of
Hawaii into the Union.”
An appeal to the United States Supreme Court by Petition for
Writ of Certiorari was not pursued and justly so.
The grant of a Writ of Certiorari by the United States
Supreme Court is discretionary and generally reserved for cases
of national significance.
The class of person the Hawai`i Supreme Court refers to
upon introspective examination is insecure, nebulous and
obscure, its decision liberally obtuse and primordial.
THE CONSTITUTION OF THE STATE OF HAWAII
LIMITATIONS OF SPECIAL PRIVILEGES
Section 21. The power of the State to act in the general welfare
shall never be impaired by the making of any irrevocable grant of
special privileges or immunities. [Ren and am Const Con 1978
and election Nov 7, 1978]

5. CONSTRUCTION
Section 22. The enumeration of rights and privileges shall not be
construed to impair or deny others retained by the people. [Ren
Const Con 1978 and election Nov 7, 1978]
ARTICLE I
BILL OF RIGHTS
POLITICAL POWER
Section 1. All political power of this State is inherent in the
people and the responsibility for the exercise thereof rests with
the people. All government is founded on this authority. [Am
Const Con 1978 and election Nov 7, 1978]
A STATE RUN INTERISLAND FERRY
“Maui Representative Joe Souki, Transportation Committee
chairman, [currently Speaker of the House] who had been a
strong supporter of the privately run Superferry, wanted to set
up the system, but objections from Reps. Roy Takumi and Faye
Hanohano caused Souki to amend the bill and call for a study.
"I don't think we can conclude that the state should be in a ferry
system or run a ferry system," said Takumi (D, Pearl City-Pacific
Palisades).
Souki agreed to a study, proposed by Hanohano (D, Pahoa-
Kalapana), adding that he was a "believer in a ferry system for
the entire state."”
[Clarification Supplied]
Mike Formby, then Deputy Director of Transportation, State of
Hawai`i, currently, Director, Department of Transportation
Services at City and County of Honolulu,

6. "It is a complex and finally challenging undertaking that will
require the support of many parties, including the Legislature,
the private sector and the communities that this system will
serve."
Reference: Borreca, R. (2009, February 9). Bill cleared to study
state-backed ferry. Star Bulletin. Retrieved from
http://www.starbulletin.com/news/20100209_Bill_cleared_to_study_state-backed_
ferry.html
HSF FINANCING WAS COMPLEX AND SECURE
FINANCING FOR THE INTERISLAND FERRY IS ACHIEVABLE
“Financing for the Hawaii Superferry venture was sophisticated.
Hawaii Superferry, Inc., the operating company and ship owner,
borrowed some $135 million for vessel construction under bonds
guarantied by an agency of the US Government; with additional
junior financing of $21 million provided by Austal. Those loans
are secured, in that order, by ship mortgages on the vessels.
Hawaii Superferry’s parent company, HSF Holding, borrowed $51
million from an investor called Guggenheim Funding.
Guggenheim’s loan was secured by HSF’s shares in its wholly
owned subsidiary, Hawaii Superferry. Behind the secured vessel
loans was $92 million in equity, the majority of which came from
the investment firm of J. F. Lehman & Co (“JFL”).”
Reference: Craig Miller, Esq., Davis Wright Tremaine LLP – DWT
Pacific, Seattle, Washington. Hawaii Superferry, September 2009.

7. KEY AND PIVOTAL - ENVIRONMENTAL IMPACT STATEMENT
Wed, Jan 6, 2010
Attention: Mr. Alan T. Yamamoto
Senior Legislative Assistant
Offices of Senator Daniel K. Inouye
Aloha Mr. Yamamoto-
I wanted to clarify the points in Mr. Hasegawa’s email for you. Mr.
Hasegawa was kind enough to call us today to discuss the
possibility of working on an alternate interisland ferry service that
would be privately run as I understand it. We were the lead
consultant for the State DOT Harbors Super Ferry EIS that
ultimately stalled.
That work was done for the State of Hawaii DOT Harbors Division.
The studies cannot be used for other purposes without a release
from DOT. The preparation and processing of such a high profile
EIS would require months, perhaps years, and would be costly due
to the large volume of comments and the need for coordination with
many, many agencies, consultants and community groups. It’s
difficult to determine the schedule and cost of such an EIS through
the Hawaii Chapter 343 process without more information. The
program for the alternate ferry service could possibly require
extensive changes to the studies undertaken for the Super Ferry if
environmental impacts vary from our initial assumptions. The
program would also dictate the consultants used to prepare the new
studies or amend the existing work. If a long period of time elapses
the work may have to be redone to reflect existing conditions.

8. You can see that there are many questions to be answered and
issues to look into.
Please do not hesitate to call or email me if you have further
questions or comments.
Best wishes-
Michael B. Terry, ASLA, CLARB | President/CEO Belt Collins
Hawaii Ltd. 2153 North King Street, Suite 200 | Honolulu, HI
96819-4554 USA T: 808.521.5361 | F: 808.538.7819 |
www.beltcollins.com
TITLE XI FEDERAL SHIP FINANCING PROGRAM
“[E]stablished pursuant to 46 USC Chapter 537, provides for a
full faith and credit guarantee by the U.S. Government of debt
obligations issued by U.S. or foreign shipowners for the purpose of
financing or refinancing either U.S. flag vessels or eligible export
vessels constructed, reconstructed or reconditioned in U.S.
shipyards.”
Program Requirements
Financial Requirements
 Minimum of 12.5% equity funded or committed prior to
Maritime Administration approval
 Positive working capital
 Long-term debt to equity ratio of 2:1 or less
Maintain net worth - Economic Soundness
Technical Acceptance - Legal and Regulatory compliance

9. Insurance Requirements
Vessels or technology financed by Title XI must maintain
adequate insurance during the entire term of the financing.
Insurance must be provided by an approved underwriter.
List of approved domestic and foreign underwriters.
Source: MARAD.
http://www.marad.dot.gov/ships_shipping_landing_page/title_xi_home/
title_xi_home.htm
http://www.marad.dot.gov/ships_shipping_landing_page/title_xi_home/tit
le_xi_prog_description/title_xi_prog_description.htm
CAPITAL CONSTRUCTION FUND
“The Capital Construction Fund (CCF) program was created to
assist owners and operators of United States-flag vessels in
accumulating the large amounts of capital necessary for the
modernization and expansion of the U.S. merchant marine. The
program encourages construction, reconstruction, or acquisition of
vessels through the deferment of Federal income taxes on certain
deposits of money or other property placed into a CCF.
CCF vessels must be built in the United States and documented
under the laws of the United States for operation in the Nation's
foreign, Great Lakes, Short-Sea Shipping or noncontiguous
domestic trade or its fisheries. Participants must meet U.S.
citizenship requirements.
Operators of American-flag vessels are faced with a competitive
disadvantage in the construction and replacement of their vessels
relative to foreign-flag operators whose vessels are registered in
countries that do not tax shipping income. The CCF program helps
counterbalance this situation through its tax-deferral privileges.

10. Another goal of the program is to assist in the modernization and
expansion of vessels used in the noncontiguous domestic trade and
the Great Lakes trade.”
“[V]essels constructed, reconstructed, or acquired under this
program span a wide spectrum, including large containerships,
Roll-On/Roll-Off vanships, barge-carrying vessels, and other
general cargo vessels; crude oil and petroleum product tankers,
sophisticated liquefied natural gas (LNG) carriers; self-unloading
Great Lakes bulk carriers; tugs, barges, supply vessels, and ferry
and passenger vessels.” [Emphasis Supplied]
Source: MARAD.
http://www.marad.dot.gov/ships_shipping_landing_page/capital_construction_fu
nd/capital_construction_fund.htm
HISTORICAL PERSPECTIVE
“Past ferry prospects in Hawaii have come and gone. A steamship
Hualalai set off in January 1966 and went out of business before
the year's end. In 1975, Seaflite launched a hydrofoil system
connecting Honolulu, Maui, Kauai and the Big Island, but its
parent company went broke three years later and the Hawaii
operation ended.”
Source: Ruel, T. (2004, January 13). Ferry venture accelerates -
Hawaii Superferry has secured a pact to buy two ships, as well as
investment advice and commitments. Star Bulletin.

11. Island History for Friday, June 17, 2011
Nawiliwili Harbor opens
Hank Soboleski – Special to The Garden Island | Posted Jun 16,
2011
When the inter-island steamship “Hualalai” steamed past the
Nawiliwili breakwater shortly after 6 a.m. on July 22, 1930,
Nawiliwili Harbor was officially opened to seagoing traffic.
“Hualalai” was escorted by a score of sampans and welcomed by
sirens from two Navy tenders and a submarine in the harbor, and
as she rounded the seawall, fireworks were shot aloft.
About 4,000 people watched while “Hualalai” tied up alongside Pier
1 near the port’s terminal, and it was estimated that 1,300 cars
were parked beside the pier.
First off the gangway was Grove Farm founder George Norton
Wilcox (1839-1933), who was practically covered with lei while he
walked to his car. Thereafter, every passenger was presented with a
lei by flower girls standing at the foot of the gangway.
Although the first plans for a harbor at Nawiliwili were made by the
Hawaiian government in 1881, it was Wilcox who was primarily
responsible for establishing a well-protected, deep water port at
Nawiliwili.

12. The breakwater, which was largely financed by Wilcox, was finished
in 1921, and in 1927, when he was 88, Wilcox directed building of
the seawall that was completed in 1928. Dredging of the harbor and
construction of the pier and port terminal followed.
At 8:40 a.m., a flight of eleven Navy seaplanes flying out of Pearl
Harbor began landing in Nawiliwili Harbor. Aboard were Territorial
Gov. Lawrence M. Judd and 75 other persons arriving for the
harbor’s opening. Soon after 10:00 a.m. all the planes had landed
and their pilots, crews and passengers had been taken ashore in
small boats.
Featured on the pier that morning was a concert presented by the
Salvation Army Band and a specially composed song sung by a
group of Hawaiian girls directed by Henry Waiau.
Source: The Garden Island http://thegardenisland.com/news/local/island-history-
for-friday-june/article_4f86e908-98a4-11e0-94fc-
001cc4c03286.html?mode=jqm
SeaFlite

13. Two other boats were added to the original and the service ran for
2 1/2 years, ending in January 1978. The owners abandoned the
service due to financial problems and the boats were sold into
service in Hong Kong.
SeaFlite operated 12 runs daily in its hay day at a cost of $20 one-way.
Seasickness presented a severe problem on the boats, which were
touted as being smooth sailing since they theoretically skimmed
above the waves. Other problems included a fire aboard one of the
vessels, and a crash into a Coast Guard vessel. The boats also
suffered lack of reliability and sailings often got cancelled. There
was a persistent concern about harming Hawaiian humpback
whales, although no problems actually occurred as far as I’m aware.
Two other attempts were later made to restart the service using
upgraded Boeing 929-115 in 1978 and 1979, but neither effort got
off the ground.
Source: Beat of HAWAII
http://beatofhawaii.com/hawaii-ferry-history-seaflite-and-hawaii-superferry/
HSF VESSEL CONSTRUCTION – LESSONS LEARNED
The Alakai was the first vessel delivered. The major
construction difference between the Huakai and the Alakai was a
ramp to load and offload cargo and vehicles built on the Huakai
but not the Alakai. The Alakai required a moored dock in Kahului
Harbor. This dock was not pillared to bed rock and subject to
breakaway during high seas – a major safety hazard.

14. The Huakai and Alakai featured environmentally friendly
technologies - non-toxic bottom paint, zero wastewater discharge
and clean diesel engines.
The Alakai was purchased by the United States Navy and
was named the USNS Puerto Rico (HST-2).
The Huakai, the second vessel in the Super Ferry fleet, was
purchased by the United States Navy and was named the USNS
Guam (HST-1).
The USNS Guam (HST-1) is home ported in Okinawa, Japan
and provides a flexible, high speed vessel response for that area of
the Pacific.
THE INTERISLAND FERRY – A PROFIT CENTER
“Hawaii Superferry has estimated that a family of five traveling by
car to the neighbor islands from Oahu could use the ferry service
for about half the cost of flying and renting a car, Garibaldi said.”
[John Garibaldi, Partner, Hawaii Super Ferry, former CFO,
Hawaiian Airlines]

15. “GOVERNOR LINDA LINGLE AND SENATOR DAN INOUYE
HAILED THE PROJECT AS A SOCIAL AND ECONOMIC
BENEFIT TO THE ISLANDS.”
Source: Ferry venture accelerates - Hawaii Superferry has secured a pact to
buy two ships, as well as investment advice and commitments. Star Bulletin.
Cited Infra. [Clarification and Emphasis Supplied]