[Federal Register Volume 59, Number 92 (Friday, May 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11825]
[[Page Unknown]]
[Federal Register: May 13, 1994]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket S-906]
Mormac Marine Transport, Inc.; Application for Written Permission
Pursuant to Section 805(a) of the Merchant Marine Act, 1936, as Amended
Mormac Marine Transport, Inc. (Mormac), a subsidiary of Mormac
Marine Group, Inc. (Mormac Marine), by application of May 9, 1994,
requests, pursuant to section 805(a) of the Merchant Marine Act, 1936,
as amended (Act) and Article II-13 of Operating-Differential Subsidy
Agreements, Contracts MA/MSB-295 (a), (b), and (c) (ODSAs), written
permission for (1) James R. Barker and Paul R. Tregurtha (and members
of their immediate families), to own a pecuniary interest in Moran
Towing Corporation (Moran) and (2) Messrs. Barker and Tregurtha and
members of their immediate families to serve as officers and directors
of Moran and any of its subsidiaries.
Moran provides domestic coastwise transportation services and
performs harbor ship work with tugboats, more particularly described
below. Mormac is of the view that docking and undocking ships within
harbors is not subject to section 805(a), noting that that type of
service was within section 803 of the Act, which was repealed by the
Merchant Marine Act of 1970.
Mormac points out that it currently has approval for common
ownership, officers and directors of Mormac Marine and its subsidiaries
as well as the Interlake Steamship Company and Lakes Shipping Company,
Inc., both of which are involved in the domestic coastwise Great Lakes
service. Mormac needs approval for the acquisition of Moran for the
brief period of time remaining under the terms of Mormac's ODSAs.
Mormac's ODSAs will terminate in December 1995, June 1996, and February
1997, respectively.
Pursuant to the letter of intent, Messrs. Barker and Tregurtha,
members of their immediate families, and Lakes Shipping Company, Inc.
(which itself is owned in substantial part by the Barker and Tregurtha
families) will be purchasing the outstanding stock of Moran.
According to Mormac, Moran and its subsidiaries are currently
involved principally in the operation of tug boats from eight ports on
the U.S. east and gulf coasts used to dock and undock ships and also
tow barges and other vessels. Moran also uses its own tugs and barges
to transport cargoes along the east and gulf coasts and dry bulk
cargoes both in the coastwise and worldwide trades. The Moran fleet
currently consists of 54 tugs and 12 barges. Moran also indirectly owns
a 20-percent interest in tankers transporting crude oil from Alaska to
the continental U.S.
Mormac states that Moran and Mormac are both U.S. citizens within
the definition of section 2 of the Shipping Act, 1916, and section
905(a) of the Act, and will continue to be so after the consummation of
the proposed transactions. Following the change in ownership, Mormac
claims that Moran will continue to be involved in the same domestic
coastwise and worldwide service in which it is currently engaged, with
the possibility of future modifications and expansion to these services
as circumstances warrant and permit. Mormac feels that it is essential
that Moran be permitted freely to move tugboats and barges among the
several services in which they are presently employed and into new
services if conditions and circumstances so dictate. It is also
important that Moran be able to expand services geographically within
the regions currently being served.
Mormac maintains that the ownership of Moran by Messrs. Tregurtha
and Barker and their involvement in the management of Moran will not
result in any change in competitive conditions for U.S.-flag vessels
providing domestic coastwise marine transportation and harbor tug
services or for U.S.-flag vessels providing tanker services from Alaska
to the continental U.S. The only effect of the proposed transaction
will be a change in the ownership of Moran. Furthermore, it is expected
that the management of Moran will remain with Moran after the
acquisition. Messrs. Tregurtha and Barker will serve as Chairman and
Vice Chairman thereof, respectively.
Moran and Mormac are, and will remain, according to Mormac,
entirely separate corporate entities that will maintain separate and
discrete accounts so there will be no issue of a subsidy leakage or
diversion of subsidy. Following the consummation of the proposed
transaction, Mormac and Moran will consent to examination of their
books and records to the extent necessary to establish that there is no
diversion of subsidy. Mormac will receive no benefit from the
operations of Moran and Moran will receive no benefit from the
operations of Mormac.
Moran believes that no U.S.-flag competitor of Moran will be
subject to unfair competition nor will the ownership of Moran by
Messrs. Barker and Tregurtha and their family members be prejudicial to
the purposes and policies of the Act.
Mormac contends that no disputed issue of material fact is
anticipated by a transaction that simply changes ownership of a company
providing existing services. Any competitive condition that existed
before the transaction will exist after the transaction. Mormac
believes that no credible argument of leakage can be raised,
eliminating the possibility of any argument that a change in ownership
and the continuation of current services will result in unfair
competition to any U.S.-flag vessel. Under these circumstances, should
there be any request to intervene in this application, no issue is
expected by Mormac to be raised that could not be addressed on the
basis of available information provided to the record or subject to
official notice and certainly no issue that would involve the
submission of substantial evidence, either written or oral.
In Mormac's view, approval of this application is also entirely
consistent with the purposes and policies of the Act. This acquisition
will be a significant expansion of Messrs. Barker's and Tregurtha's
U.S.-flag fleets and a strong statement of continuing support for the
U.S. merchant marine by individuals who have a long history in and are
well respected by the maritime industry.
Mormac requests the scope of domestic operations permitted under
the ODSAs be modified to allow ownership of Moran by Lakes Shipping
Company, Inc., Messrs. Barker and Tregurtha and members of their
immediate families, as well as to allow Messrs. Barker and Tregurtha to
serve as officers and directors of both Mormac and Moran, with Moran
continuing to be involved in its current services (modified and
expanded as circumstances warrant and permit).
This application may be inspected in the Office of the Secretary,
Maritime Administration. Any person, firm, or corporation having any
interest in such application within the meaning of section 805(a) of
the Act and desiring to submit comments concerning the application,
must file written comments in triplicate with the Secretary, Maritime
Administration, together with petition for leave to intervene, Room
7300, Nassif Building, 400 Seventh Street SW., Washington, DC 20590.
Comments must be received no later than 5 p.m. on May 24, 1994. The
petition shall state clearly and concisely the grounds of interest, and
the alleged facts relied on for relief.
If no petition for leave to intervene is 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.
In the event petitions regarding the relevant section 805(a) issues
are received from parties with standing to be heard, a hearing will be
held, the purpose of which will be to receive evidence under section
805(a) relative to whether the proposed operations (a) could result in
unfair competition to any person, firm, or corporation operating
exclusively in the coastwise or intercoastal service, or (b) would be
prejudicial to the objects and policy of the Act relative to domestic
trade operations.
Dated: May 11, 1994.
(Catalog of Federal Domestic Assistance Program No. 20.804
(Operating-Differential Subsidies))
By Order of the Maritime Administrator.
James E. Saari,
Secretary.
[FR Doc. 94-11825 Filed 5-12-94; 8:45 am]
BILLING CODE 9410-81-M
