[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service was within section 803 of the Act, which was repealed by the 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