JANUARY 28, 2018 — TOTE Inc. says that, as a result of its Phase 1 technical review of Piers 1 and 2 in Honolulu Harbor, its plans to enter the Hawaii to mainland service are on hold and that it will not renew its letter of intent (LOI) with Philly Shipyard that expires on January 31, 2018. In response, the shipyard is putting its plans to build up to four Jones Act containerships for TOTE on hold.
In September 2017, the Hawaii Department of Transportation earmarked for TOTE access to Honolulu Piers 1 and 2 and exclusive use of the adjacent 45 acres beginning in 2020, to coincide with TOTE’s new service to Hawaii.
TOTE subsequently conducted a preliminary study of the site’s infrastructure which indicated that upgrades and improvements will be required to accommodate the new operations. TOTE says that, due to the scope and timing of the upgrades and improvements, i
TOTE says it continues to be open to working with the Hawai’i Department of Transportation to update plans and a timeline for access to a Honolulu deep water terminal that would allow commencement of TOTE’s service to Hawaii.
The LOI, signed by TOTE and the shipbuilder in July 2017, contemplates the construction and sale of up to four 3,700 TEU eco-friendly vessels, with planned deliveries for the first pair (Hulls 031-032) in 2020 and the second pair (Hulls 033-034) in 2021.
Philly Shipyard says that the project to build Hulls 031-034 as containerships is being put on hold and that it is suspending substantially all construction-related activities on these vessels, including design, planning and procurement work.
The shipyard has placed orders for all major long-lead items for the first pair. It says that if these orders were to be canceled, then the cancelation costs would be substantially lower than the value of the orders placed.
Philly Shipyard says “it intends to resume this project when there is more clarity regarding the new order situation and related capital requirements” and that it is “exploring alternatives in order to secure contracts and financing for these vessels.”