U.S. SHIPBUILDERS WANT MILITARY-USEFUL VESSELS BUILT IN U.S. YARDS

U.S. SHIPBUILDERS WANT MILITARY-USEFUL VESSELS BUILT IN U.S. YARDS    The country’s six largest shipbuilders told lawmakers Tuesday that a reauthorization of the Maritime Security Program should require that the Defense Department pay for the design and construction of military-useful U.S.-flag commercial tonnage.
   “If Congress reauthorizes the existing MSP program, the Department of Defense will have no say in the types of ships these companies enroll in the MSP program,” said Richard H. Vortmann, president of National Steel & Shipbuilding Co. and chairman of the American Shipbuilding Association before the House Armed Services Committee Merchant Marine Panel. “They may have little or no military utility, and there will be no assurance that when the going gets tough that these ships will be available to the Department of Defense.”
   Vortmann said the types of ships and numbers of each should be identified by the U.S. Transportation Command in cooperation with the Transportation Department’s Maritime Administration. The Defense Department would also consult annually with U.S.-flag commercial vessel operators.
   “The lease payments to DoD would be based on the international bareboat charter rate for a comparable vessel,” Vortmann said. “Lease payments to DoD could be made on a monthly basis. While the contractual length of the lease would be for 20 years, the contract could either be at a fixed rate for 20 years, or alternatively, provide for an annual adjustment of the lease payment to reflect any increase or decrease in international charter rates.”
   Vortmann described the proposed program as a “win-win-win” for commercial U.S.-flag vessel operators, Defense Department, U.S. maritime unions and the country’s shipbuilders. He said the U.S.-flag carriers are “financially hard pressed to invest in new ships.”
   Lawmakers Rep. Duncan Hunter, R-Calif., and Jim Saxton, R-N.J. of the House Armed Services Committee expressed concern about paying for the ships when the U.S.-flag carriers have already asked for an increase in the amount of annual payment per ship from $2.1 million to $3.5 million for 20 years. The current MSP program is due to expire Sept. 30, 2005.
   Other shipbuilders that testified before the House Armed Services Committee Maritime Marine Panel — Herschel T. Vinyard Jr., vice president of Atlantic Marine Holding Co., and Ronald J. McAlear, president and chief executive officer Kvaerner Philadelphia Shipyard — said changes could be made to the Title XI Shipbuilding Loan Guarantee Program and the Capital Construction Fund to induce the construction of MSP-related ships in U.S. shipyards.
   Vinyard and McAlear also suggested that a reauthorized MSP include language to require ship repair work to be done in the country’s shipyards.
   “I am not here this morning asking for government subsidization of the commercial shipyard industry,” Vinyard said. “I am asking only that government policies recognize that a healthy commercial shipyard industry is an important element of both our economy and national security, and that maritime policies be conceived with all segments of the maritime industry in mind.”
   “Short term, piecemeal policies that benefit one segment or another of the maritime industry have provide insufficient to revitalize our blue water, oceangoing industry engaged in the international marketplace,” Vinyard said.