Lawmaker Wants Review of Cruise Ship Deal

Friday, October 21, 2005
A top House Democrat called on federal officials to justify their decision to sign a $236 million deal with Carnival Cruise Lines for Hurricane Katrina housing, saying the six-month contract is overpriced. In a letter, Rep. Henry Waxman of California asked Homeland Security Secretary Michael Chertoff to release documents indicating how the price was calculated. Waxman said he had Carnival documents from 2002 showing the company normally earns revenue of $150 million over six months. "A comparison of this information to the federal contract raises serious questions about whether the Carnival contract is a responsible use of taxpayer funds," Waxman wrote. The deal with Carnival for three full-service cruise ships _ which sat half-empty for weeks in the Gulf Coast _ has been criticized by lawmakers of both parties as a prime example of wasted spending in Hurricane Katrina-related contracts. Sens. Tom Coburn, R-Okla., and Barack Obama, D-Ill., also have called for investigations into whether the contract price, which amounts to roughly $1,275 a week per passenger if the three ships were at full capacity, is too high. Carnival officials have defended the deal, saying the company will not make extra profit because the $236 million price covers the revenue it would normally receive for up to 120,000 passengers it could book. But Waxman, the top Democrat on the House Government Reform Committee, said the 2002 financial data shows that taxpayers are paying Carnival "significantly more under the federal contract than the ships earned on their own." He noted that the 2002 figure of $150 million in revenue includes sales for liquor and onshore excursions as well as maintenance costs for pools, bars and casinos, which aren't needed for hurricane evacuees and thus shouldn't be charged. Officials with Homeland Security did not immediately return a phone call Thursday seeking comment. In an e-mail statement Thursday, Carnival spokeswoman Jennifer De La Cruz said the $236 million figure was based on a "good-faith estimate" of what the company would have earned otherwise. She noted that the government contract provides for a refund of any surplus profit based on Carnival's good-faith estimates, and that during 2002, the industry's revenue was lower than usual due to the aftermath of the Sept. 11, 2001 terror attacks. "Using that time period as a basis for the financial analysis is irrelevant and the mathematics on the whole are flawed," De La Cruz wrote. By HOPE YEN The Associated Press

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

No Clues on Hanjin's Financial Health

Cash-strapped Hanjin Shipping Co. sources say that the negotiations with tonnage providers for lower rates are undergoing, but wouldn't say much else.   According to Korea Herald, the country's No.

DP World's H1 Volumes Rise

Ports operator DP World reported on Tuesday first-half 2016 gross container volumes up 1.2 percent on a like-for-like basis and up 2.5 percent on a reported basis.

Samil PwC Okays Hyundai's Management Improvement Plan

Hyundai Heavy Industries (HHI) is notified by Samil PwC, a local member of the global accounting firm PwC, that its 3.5 trillion won worth management improvement

Cruise Ship Trends

Can Bandwidth Supply Keep up with Maritime Demand?

In the next few years, demand for bandwidth on the high seas will grow, in no small part due to technology that is making operations more efficient and keeping crews and passengers healthy,

Summer Cruise to North Sea Oil Rigs Amazes Tourists

Bored with palm-fringed beaches and turquoise seas? Then the gigantic oil platforms of the North Sea beckon. The first ever "rig-spotting" cruise just ended off the coast of Norway,

China to Add 8 Cruises to Push Tourism in South China Sea

Three State-owned enterprises from the shipping, tourism and construction sectors will cooperate to equip up to eight cruise liners and offer diversified sightseeing

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0891 sec (11 req/sec)