[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Notices]
[Pages 58456-58457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29149]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket No: [MARAD-98-4650]
Marine Transport Corp.; Application for Written Permission Under
Section 608 and Section 805(a) of the Merchant Marine Act, 1936, as
Amended
Marine Transport Corporation, by letter dated September 28, 1998,
requests consideration and approval of the following transactions
described herein.
The ITB JULIUS HAMMER and ITB FRANCIS HAMMER (Vessels) are
currently subject to a leveraged lease financing with General Electric
Credit Corporation of Georgia (GECC) (as owner participant) and Fleet
National Bank, N.A. (as trustee) and bareboat chartered to subsidiaries
of Occidental Chemical Corporation (Occidental Chemical). Debt required
for the construction and acquisition of the Vessels is subject to Title
XI loan guarantees (the Title XI Obligation). The ITB JULIUS HAMMER is
subbareboat chartered to Ocean Chemical Transport, Inc. (Ocean Chemical
Transport) which is the operator under Operating-Differential Subsidy
Agreement (ODSA), Contract MA/MSB-440 and the ITB FRANCIS HAMMER is
subbareboat chartered to Ocean Chemical Carriers, Inc. (Ocean Chemical
Carriers) which is the operator under ODSA, Contract MA/MSB-442. The
Vessels are time chartered to a subsidiary of Occidental Chemical,
Suwannee River Chartering, Inc., and were constructed with
Construction-Differential Subsidy (CDS).
Occidental Chemical, Marine Transport Corporation (MTC), and Stolt-
Nielsen, S.A. (Stolt Nielsen) have entered into a Memorandum of
Agreement (MOA) to (1) transfer the interest of GECC in the trust that
holds legal title to the Vessels to MTC subsidiaries to be formed (the
MTC Subsidiaries) and (2) assign the ODSAs from Ocean Chemical
Transport and Ocean Chemical Carriers to one or two subsidiaries of
Intrepid Ship Management, Inc. (the Intrepid Subs) as the new
subbareboat charterers of the Vessels.\1\ Intrepid Ship Management,
Inc., a subsidiary of MTC, was formerly named OMI Ship Management, Inc.
In carrying out its obligations as the operator under the ODSAs, each
Intrepid Sub may contract for specific management and technical
services with MTC or subsidiaries of MTC.
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\1\ By letter dated October 21, 1998, Occidental Chemical, Ocean
Chemical Transport and Ocean Chemical Carriers support the request
of MTC for Ocean Chemical Transport and Ocean Chemical Carriers to
assign the ODSAs to subsidiaries of Intrepid Ship Management a
subsidiary of MTC.
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As part of these transactions, the bareboat charters, the Title XI
Reserve Fund and Financial Agreement, and the Depository Agreement
would be assigned to and assumed by the appropriate MTC Subsidiaries
and the current bareboat charterer would be released therefrom. The
Vessels would continue to be operated in the international trade for
the duration of their ODSAs.
Concurrently with the transfer of the interest in the trust that
holds legal title to the Vessels, the ODSAs would be assigned to and
assumed by the appropriate Intrepid Sub and Ocean Chemical Transport
and Ocean Chemical Carriers would be released therefrom.
Concurrently with the transfer of GECC's interest in the trust that
holds legal title to the Vessels and the assignment of the ODSAs, the
Vessels would be time chartered to a joint venture to be formed by MTC
and Stolt Nielsen. The Joint venture, a foreign corporation to be 75
percent owned by MTC and 25 percent owned by Stolt Nielsen, would be
called Stolt Marine Transport (SMT). SMT would, in turn, sub-time
charter the Vessels to Stolt Product Tankers, Inc. The sub-time
charterer would employ the Vessels in accordance with the prevailing
market conditions.
MTC and its related companies request permission pursuant to
section 805(a) of the Merchant Marine Act, 1936, as amended (Act), to
continue to own, operate, or charter vessels in the coastwise trade (or
to own a pecuniary interest in entities that own, operate, or charter
vessels in the coastwise trade) following the approval of each Intrepid
Sub as operator under the appropriate ODSA.
MTC and its subsidiaries currently own 14 U.S.-flag vessels and
manage 17 Ready Reserve Fleet vessels and 6 privately owned U.S.-flag
vessels. Listed below are those U.S.-flag vessels that are owned and/or
operated by MTC in the
[[Page 58457]]
domestic trade showing areas of specific service:
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Owned vessels Area of operation Cargo type Size (DWT)
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MARINE CHEMIST...................... West Coast.................. Chemical Parcel............. 35,941
MBC-1 (Barge)....................... Gulf of Mexico or Gulf to Chemical Parcel............. 4,000
Puerto Rico.
MBC-2 (Barge)....................... Gulf of Mexico or Gulf to Chemical Parcel............. 4,000
Puerto Rico.
MARINE DUVAL........................ Texas to North Carolina..... Molten Sulphur.............. 25,131
MARINE COLUMBIA..................... Alaska Trade................ Crude Oil................... 138,698
PATRIOT............................. Spot Trade.................. Product Carrier............. 35,662
COURIER............................. East Coast.................. Product Carrier............. 35,662
Vessels Operated For Other Owners:
CHEMICAL PIONEER.................... Gulf of Mexico to New Jersey Chemical Parcel............. 35,491
BT ALASKA........................... Alaska Trade................ Crude Oil................... 191,120
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MTC advises that simply changing the operator of the Vessels for
purposes of the ODSAs will not change the competitive marketplace for
any U.S.-flag vessels operating exclusively in the coastwise trade in
competition with MTC's current U.S.-flag vessels. MTC claims non-MTC
U.S.-flag vessels will face exactly the same competitive conditions
after the transfer of the ODSAs as they do today. Therefore, according
to MTC, no unfair competition within the meaning of section 805(a) of
the Act will result from the assignment of the ODSAs.
MTC states that permitting MTC to undertake activities relating to
coastwise vessels following the transfer is also consistent with the
objects and policies of the Act. MTC states it is the oldest and one of
the largest shipping companies in the United States and is known for
its long-term relationships with its customers. MTC states it is a
strong competitor as a shipowner and ship operator in the U.S. maritime
industry. MTC advises that permitting MTC to continue to operate under
the U.S. flag for the duration of the ODSAs supports, advances and
promotes the U.S. merchant marine industry.
MTC advises that no subsidy received by MTC pursuant to the ODSAs
will be used to benefit MTC's non-subsidized coastwise operations.
Under modern banking and accounting practices, according to MTC, it is
easy to audit the use of subsidized funds by the appropriate Intrepid
Sub and provide needed assurances that funds will not be co-mingled or
used for non-subsidized purposes.
As a final matter, Intrepid and MTC note that its request for
permission under section 805 does not involve any issue of material
fact that cannot be resolved promptly on the basis of available
information.
Pursuant to sections 608 and 805 of the Act, and Article II-16 of
the ODSAs, Ocean Chemical Transport, Ocean Chemical Carriers, GECC,
Fleet National Bank, N.A., MTC, the MTC Subsidiaries, and each Intrepid
Sub requests approval of the following:
1. Assignment of the ODSAs to the appropriate Intrepid Sub;
2. Designation of each Intrepid Sub as the Operator pursuant to the
appropriate ODSAs;
3. Permission pursuant to section 805(a) of the Act for MTC to
operate vessels in the coastwise trade; and
4. Such other approvals as may be required for the above-described
transactions.
Any person, firm, or corporation having any interest in the
application for section 805(a) permission and desiring to submit
comments concerning the application must file written comments in
triplicate, referring to the docket number that appears at the top of
this document with the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400
Seventh Street, SW, Washington, DC 20590. The petition should state
clearly and concisely the grounds of interest and the alleged facts
relied on for relief. Such comments must be filed no later than 5:00
P.M. Eastern Time, November 13, 1998.
If no petitions for leave to intervene on section 805(a) issues are
received within the specified time, or if it is determined that
petitions filed do not demonstrate sufficient interest to warrant a
hearing, the Maritime Administration will take such action as may be
deemed appropriate.
The application and all comments received will be available for
examination at the above address between 10 a.m. and 5 p.m., e.t.
Monday through Friday, except Federal Holidays. An electronic version
of this document is available on the World Wide Web at http:/
dms.dot.gov.
(Catalog of Federal Domestic Assistance Program No. 20. 805
Operating-Differential Subsidies (ODS)).
By order of the Maritime Administrator.
Date: October 27, 1998.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 98-29149 Filed 10-29-98; 8:45 am]
BILLING CODE 4910-81-P
