MIAMI -- A cruise ship once earmarked for Hawaii cruises and
partially financed with U.S. taxpayer money will fly a foreign flag
after its construction is completed in Europe.
The ship, one of the two Project America vessels commissioned by
now-defunct American Classic Voyages, is being bought by Norwegian
Cruise Line.
NCL said it will acquire the ship's partially completed hull
from Northrop Grumman Corp. The price was not disclosed. The
project is slated for completion in 2004.
The ship was under construction at Northrop's Ingalls shipyard
in Pascagoula, Miss. NCL said it has not determined if it will
construct the second Project America ship.
Under NCL, the vessel will be reconfigured to accommodate the
line's Freestyle Cruising concept, including eight different
on-board restaurants. NCL said 80% of the cabins will have an ocean
view, and 85% of those will have balconies.
The vessel will be subject to U.S. cabotage laws because it will
fly a foreign flag. Non-U.S. flagged ships must make a foreign call
on voyages that begin and end in the U.S.
Andrew Stuart, NCL's senior vice president of sales and
marketing, said the Project America deal was "not related" to
recent discussions that NCL has been having with Hawaii Sen. Daniel
Inouye about expanding the NCL product in the 50th state.
Stuart said it was too early to tell where the ship will be
deployed.
In 1999, the Maritime Administration (Marad) agreed to provide
$1.1 billion in loan guarantees to Ingalls to finance construction
of the two ships. Marad paid $187 million of that amount in
December for work completed on the first ship, a spokeswoman
said.
Marad has agreed to give up a lien on the first ship in order to
recover its share of the proceeds from Northrop, which the
spokeswoman said was a minimum of $2 million.
Project America -- the first major passenger shipbuilding
program in the U.S. in more than 40 years -- hit rough seas during
its four-year history. Although it was hailed as an attempt to
return shipbuilding contracts to the U.S., critics derided the
project for being overbudget and behind schedule.
Work stopped in October after AMCV declared bankruptcy.
In May, after trying to market the hull to other cruise
companies and the military, Marad authorized Northrop to dispose of
the ship.