Matsuda tackles academy, Title XI

Matsuda tackles academy, Title XI    U.S. Maritime Administrator David Matsuda assured lawmakers that his agency is committed to revitalizing the nation's primary academy for educating future merchant marine officers, which has in recent years suffered from crumbling infrastructure and financial management woes.
   'Improving the profile and prestige of the U.S. Merchant Marine Academy is one of Secretary of Transportation LaHood's top priorities,' Matsuda said in testimony before a House Armed Services subcommittee on seapower and expeditionary forces Wednesday.

Matsuda

   President Obama's budget request for fiscal year 2011 calls for $100 million for the academy at Kings Point, N.Y., a $26 million increase above the 2010 amount. This increase will support capital improvements, operational funding for information technology upgrades and academic program improvements, and compensation for Midshipman Fee overcharges, Matsuda said.
   The administrator also told the subcommittee that the Maritime Administration has made 'significant progress' in implementing management and process improvements at the academy based on recommendations from a Government Accountability Office report and its own advisory panel. He said the agency has implemented 32 of the 47 GAO recommendations and will fulfill the rest before the end of this fiscal year (ending Sept. 30).
   Matsuda said the agency also plans to announce its pick for the new academy superintendent soon.
   House subcommittee chairman Rep. Gene Taylor, D-Miss., noted the Merchant Marine Academy has about 60 vacancies, from maintenance to teaching spots. He asked Matsuda to consider filling some of those positions with the wounded veterans now recovering at Walter Reed Medical Center in Washington.
   The subcommittee also peppered Matsuda with questions about the status of MarAd's Title XI program. Title XI offers loan guarantees for shipyard modernization projects and building vessels in U.S. shipyards. The program provides approved applicants with long-term financing at stable interest rates, sustains efficient facilities for shipbuilding and ship repair within the United States, improves system capacity and sustains U.S. jobs.
   As of June 30, MarAd's Title XI portfolio was about $2.1 billion, which includes 60 loan guarantee contracts for more than 300 vessels and two shipyard modernizations, Matsuda said.
   Since 1993, the Title XI program has experienced 13 defaults, including two defaults in fiscal year 2009 (AQ Boat LLC and Riverbarge Excursions Lines) and two in fiscal year 2010 (Highway Superferry Inc. and AHL Shipping Co.).
   Matsuda told the subcommittee the agency continues to strengthen its Title XI loan approval process to try to prevent future defaults, and that applicants must meet strict information requirements to gain approval. 'The program is driven by the applicants,' he said.
   MarAd is processing six applications for loan guarantees in excess of $1.6 billion in total loan amounts. The six pending applications involve 11 shipyards in nine states and are for a variety of vessels and projects including articulated tug barges, shuttle tankers, drill rigs, and platform supply vessels. The agency has $76.6 million in budget authority to cover the subsidy costs of these loan requests. This amount would support about $1.1 billion in new loan guarantees, Matsuda said.
   Due to the current market conditions, the agency expects an uptake in interest among companies seeking to build vessels under Title XI. 'Given the current credit situation, Title XI is the best deal in town,' Matsuda said. ' Chris Gillis