IMAGE: PROTESTERS NEAR SUPERFERRY
Dennis Fujimoto  /  Garden Island via AP file
A Hawaii Department of Land & Natural Resoures boat keeps on eye on protesting surfers, swimmers, and canoe paddlers as the Hawaii Superferry sits outside the entrance to Nawiliwili Harbor on Aug. 27 in Lihue.
updated 9/20/2007 10:15:40 AM ET 2007-09-20T14:15:40

Operators of the first passenger-vehicle ferry between major Hawaiian Islands hoped to provide a convenient and luxurious alternative to air travel. Instead, they got protests — Hawaii-style — focused on the environment.

The Hawaii Superferry, a high-speed catamaran that can carry more than 850 passengers and 250 cars, remains idle in bustling Honolulu Harbor as judges on two islands hold hearings to determine whether it can operate while an environmental assessment is conducted.

The state plans to conduct such an assessment on the potential impact the ferry could have on harbors statewide. The review is expected to take at least eight months, and possibly longer if it is challenged.

That could be too long, said an official of the privately held Superferry, a $300 million venture whose largest investor is the private equity firm J.F. Lehman & Co.

The Superferry, with 300 employees, said it will be forced to shut down if it isn't allowed to sail while the environmental review is under way.

"We are unable to sustain operations for that length of period without revenue," said John Garibaldi, the ferry's president and chief executive.

$180 million in government help
If the Superferry folds, the state and the federal government could wind up losing millions. The state has provided $40 million worth of harbor upgrades and equipment, and the federal government has approved $140 million in loan guarantees for the ferry.

A second ferry is under construction in Alabama, set for service in 2009 between Oahu and the Big Island.

Environmentalists worry that the sleek, four-story vessels could collide with whales, spread invasive species and worsen traffic and pollution. The Superferry voluntarily suspended service Aug. 28 after two days of demonstrations at Nawiliwili Harbor on Kauai, where dozens of protesters on surfboards, canoes and kayaks blocked the $95 million ferry.

Last month, the state Supreme Court unanimously ruled that the state should have required an environmental review before Superferry service began. Now, judges on Maui and Kauai are holding hearings to determine whether service can resume while the impact on the environment is studied.

Garibaldi said he needs "actionable information" within four to six weeks to determine whether to shut down for good. He wouldn't elaborate, and he wouldn't comment on a possible backup plan or how much money his company is losing while the 350-foot ferry sits idle.

"Our current efforts are focused on the resumption of services," he said in a recent e-mail.

Gov. Linda Lingle, a strong supporter of the ferry, has argued the state followed the law, determining in 2005 that an environmental review wasn't necessary because the project fell under an exemption.

"It was only recently that the Supreme Court came out with its own interpretation of the law, which was different than everyone in the state had interpreted," she said.

Lingle said there's no doubt the ferry will go out of business if it isn't allowed to resume operation while an environmental review is conducted.

"I don't think the majority of the people in the state want to see that happen," she said.

Expert: 'Bizarre' move by state
University of Hawaii law professor Jon Van Dyke, an expert on environmental and maritime law, said environmental reviews have been required in the U.S. since 1969 and are needed to protect Hawaii's fragile environment.

"This is a well-established procedure that's now done all over the world," he said. "So the idea that you would try to leapfrog over this logical and important requirement is to me a little bizarre."

On both Maui and Kauai, the issue is the need for an environmental assessment, but much of the protest on Kauai is rooted in anti-development sentiments and a desire to preserve the island's rural nature.

Jeff Mikulina, director of the Sierra Club's Hawaii chapter, said the group's goal was never to sink the Superferry but to get an environmental review completed.

"This is a brand-new sort of operation, unlike anything we've had previously. It comes with a certain amount of risk and we just want to understand that risk," he said.

Mikulina said his group requested an environmental review three years ago, so the Superferry's present challenges could have been avoided. He said companies and government officials are trying to "cut corners" and ignore laws, creating bad business practices.

"We have clear rules to play by," he said. "If you come here and abide by the rules, we'll get along just fine."

Ferry supporters point to the obstacles and possible shutdown as feeding the idea that Hawaii is an unfriendly place to do business.

"We share the business community's concern about the message this sends to the outside world about investing in Hawaii or undertaking a viable business venture here," Garibaldi said.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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