In Tragic Irony, $1.5B Contract Clears the Ways for Maine Maritime Ship

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Image: Herbert Engineering & MARAD

Posted April 13, 2020

Construction of a $300 million training vessel for Maine Maritime Academy last week was contracted out to a Philadelphia shipyard — overseen by the company whose cargo ship, the El Faro, sank in a 2015 hurricane, killing five academy graduates and all 28 other crew members.

Philly Shipyard Inc. won the multiyear contract to build two training vessels for state maritime schools at a price of $630 million, with options to build three more for a total of $1.5 billion, according to a news release. The yard will work under a project manager for the U.S. Department of Transportation's Maritime Administration — TOTE Services LLC of Jacksonville, Fla.

TOTE ran the El Faro, a 790-foot container carrier, on weekly trips between Jacksonville and San Juan, Puerto Rico. The company was found partially responsible for the loss of the ship when it listed, took on water and sank near the eye of Hurricane Joaquin, 35 miles off the Bahamas, on Oct. 1, 2015.

The tragedy received much attention worldwide and has been memorialized locally. The sinking remains the deadliest disaster for a U.S.-flagged commercial vessel in over 40 years.

Four of the five MMA graduates aboard the El Faro, including the captain, Michael Davidson, lived in Maine. In 2017, investigation reports by the U.S. Coast Guard and the National Transportation Safety Board placed responsibility on Davidson because of his handling of the ship, but also found that TOTE contributed to the sinking.

The Coast Guard said that TOTE “did not provide adequate support and oversight to the crew of El Faro during the accident voyage.” The report also faulted TOTE for not preparing the ship with accurate weather information tools or heavy-weather procedures.

The company eventually paid millions to settle lawsuits by families of the 33 victims, but the Coast Guard investigators recommended only minor civil infractions against TOTE, with fines totaling about $80,000.

Two and a half years later, in March, an industry blog reported TOTE was still "diligently" contesting the sanctions.

A different kind of ship

Besides operating and crewing ships like the El Faro — owned since 1991 by sister company TOTE Maritime — TOTE Services also manages the building and fitting-out of new ships.

In 2019, after a competitive bid process, the Maritime Administration (known as MARAD) awarded TOTE Services a $39.2 million contract to manage construction of the five training ships.

The federal government will own the 525-foot National Security Multi-Mission Vessels, and has said it may use them to provide humanitarian assistance or disaster relief. Designed to normally house and provide real-world education for 600 maritime cadets, each ship comes with a fully equipped hospital and a helicopter landing pad, and in a pinch can berth up to 1,000 people.

The ships will spend much of their time as training craft for MMA, in Castine, and for maritime schools in California, Massachusetts, New York and Texas.

In those ports, the NSMVs will replace vessels that are aging and growing obsolete. The State University of New York Maritime College’s TS Empire State VI, 57 years old, will be replaced first, with work beginning early next year and completion due in 2023. TOTE will then lead construction of ships for Massachusetts Maritime Academy and Maine Maritime, whose current ship, TS State of Maine, launched in 1990 and was retrofitted for training in 1997.

A specific timeframe for the State of Maine replacement is not yet determined. Congress has budgeted $300 million for that ship, and President Donald Trump OK’d the allocation in December despite initially seeking a smaller amount.

Last Thursday, MMA President William J. Brennan, who also chairs the Consortium of State Maritime Academies, praised the selection of the shipyard.

“The Consortium of State Maritime Academies applauds yesterday’s announcement that the Philly Shipyard in Philadelphia has been selected to build the nation’s new National Security Multi-mission Vessel (NSMV) fleet,” Brennan said in a written statement. “The training of merchant mariners is essential to the strength of the U.S. economy and to our national security.”

Maine Maritime officials have not publicly commented on the selection of TOTE to manage the vessels’ construction, and when contacted by Mainebiz refused to say anything about the choice. The academy’s alumni association also declined.

In a news release, TOTE said, “We are confident in our ability to work with Philly Shipyard to deliver on the NSMV and are excited to again work with MARAD on this important initiative.” TOTE has managed a half dozen military transport ships for MARAD and had also planned to work with Philly Shipyard on a container ship project before canceling it in 2018.

Mainebiz contacted TOTE, but a spokesman would not provide additional comment or discuss the El Faro incident.

Ironically, El Faro launched in 1975 from Sun Shipyard and Drydock Co., in Chester, Pa., downriver from what is now Philly Shipyard. Later that year, Sun spun off part of its business to form a company that eventually became TOTE Services.

Source: Mainebiz