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

People & Company News

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

MN100: Conrad Shipyard

The Company: Conrad Shipyard was established in 1948 and is headquartered in Morgan City, Louisiana. The company designs, builds and overhauls tugboats, ferries,

Why Maritime Museums Matter

With today’s focus on digital technology, mobile apps, enhanced reality and the overall digital landscape, the maritime industry often gets overshadowed, leaving some to ask,

Cruise Ship Trends

Vard Bags Hapag-Lloyd Cruises contract for 2 Vessels

Vard Holdings Limited (“VARD”), one of the major global designers and shipbuilders of specialized vessels, is pleased to announce that it has secured contracts

Lucas Marine, Harbor Breeze Cruises Partner to Cut Fuel Costs

Lucas Marine is partnering with Harbor Breeze Corporation to help reduce the yacht charter and cruise company's fuel costs, maintenance and environmental impact in Los Angeles and Long Beach Harbors.

Pods Versus Water Lubricated Props

Thordon Bearings has called on the marine industry to investigate the characteristics of both conventional seawater-lubricated propeller shaft systems and podded

 
 
Maritime Security Maritime Standards Navigation Offshore Oil Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction 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: 0.1290 sec (8 req/sec)