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January 19, 2006

Navy buys MPS ships from Philip Morris

Leasing or chartering ships rather than buying them is often suggested as a way of stretching the Navy shipbuilding budget.

That was the approach taken with the original maritime prepositioning ships built by General Dynamics Quincy twenty years ago.

Now, though the Navy is committed to buying these ships as they come to the end of their charters. Earlier this week, the Department of Defense announced that the Navy is exercising options to buy three of the ships at $70 million each. They are the PFC Dewayne T. Williams, 1st Lt Baldomero Lopez and 1st Lt Jack Lummus.

According to shipbuilding guru Tim Colton, the $70 million price is arrived at by independent valuation.

The Navy is buying them from Braintree II Maritime Corporation, Braintree III Maritime Corporation and Braintree IV Maritime Corporation, all of Quincy, Mass.

These various Braintree entities were originally set up by General Dynamics but are currently owned by Philip Morris Capital.