MarAd Sells Two Obsolete Vessels For More Than $1m Each

Tuesday, July 15, 2008

The U.S. Department of Transportation’s Maritime Administration announced today that it has sold two obsolete ships to American salvage companies for more than $1 million each. The sale of these two vessels from the James River Reserve Fleet (JRRF) near Fort Eustis, Va., each exceed the agency’s ship-disposal program’s recent record-setting price fetched by the sale of the Adonis, which last March sold for $1,151,727.

Agency contracting officials report that the has been sold to Esco Marine, Inc., of , , for $1,465,726; and the Truckee has been sold to Bay Bridge Enterprises, L.L.C., of , for $1,231,328.

Three other obsolete government-owned ships are also being sold for a combined price of nearly $1.5 million.  The Nitro, currently moored at the James River site, has been sold to Esco Marine of , for $446,726.  The Rigel, also currently moored at the JRRF, has been sold to All-Star Metals, L.L.C., of , for $469,626; and the Gulf Merchant, currently moored at the Beaumont Reserve Fleet has been sold to Esco Marine, Inc., of for $476,726.

These sales stand in contrast to most ship disposal contracts in recent years, which have involved the federal government paying to have its obsolete ships recycled.  High worldwide prices for scrap steel have recently made such ships more valuable to recyclers, who sell the steel and other materials recovered from the ships. Since the beginning of fiscal year 2001, the Maritime Administration has awarded contracts to recycle 120 ships from all of its fleet sites; 26 of those contracts have been sales.   

 Two of the ships being sold are tankers: the Truckee, which was built in 1955 and the , which was built in 1973. The Rigel and the Gulf Merchant, are breakbulk freighters and were built in 1955 and 1964 respectively.  The Nitro is a former Navy ammunition ship built at , in 1957.   When the , Rigel, Nitro and Truckee depart the site for recycling, they will bring to 77 the number of vessels to leave since January of 2001.

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