[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Notices]
[Pages 58456-58457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29149]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration
[Docket No: [MARAD-98-4650]


Marine Transport Corp.; Application for Written Permission Under 
Section 608 and Section 805(a) of the Merchant Marine Act, 1936, as 
Amended

    Marine Transport Corporation, by letter dated September 28, 1998, 
requests consideration and approval of the following transactions 
described herein.
    The ITB JULIUS HAMMER and ITB FRANCIS HAMMER (Vessels) are 
currently subject to a leveraged lease financing with General Electric 
Credit Corporation of Georgia (GECC) (as owner participant) and Fleet 
National Bank, N.A. (as trustee) and bareboat chartered to subsidiaries 
of Occidental Chemical Corporation (Occidental Chemical). Debt required 
for the construction and acquisition of the Vessels is subject to Title 
XI loan guarantees (the Title XI Obligation). The ITB JULIUS HAMMER is 
subbareboat chartered to Ocean Chemical Transport, Inc. (Ocean Chemical 
Transport) which is the operator under Operating-Differential Subsidy 
Agreement (ODSA), Contract MA/MSB-440 and the ITB FRANCIS HAMMER is 
subbareboat chartered to Ocean Chemical Carriers, Inc. (Ocean Chemical 
Carriers) which is the operator under ODSA, Contract MA/MSB-442. The 
Vessels are time chartered to a subsidiary of Occidental Chemical, 
Suwannee River Chartering, Inc., and were constructed with 
Construction-Differential Subsidy (CDS).
    Occidental Chemical, Marine Transport Corporation (MTC), and Stolt-
Nielsen, S.A. (Stolt Nielsen) have entered into a Memorandum of 
Agreement (MOA) to (1) transfer the interest of GECC in the trust that 
holds legal title to the Vessels to MTC subsidiaries to be formed (the 
MTC Subsidiaries) and (2) assign the ODSAs from Ocean Chemical 
Transport and Ocean Chemical Carriers to one or two subsidiaries of 
Intrepid Ship Management, Inc. (the Intrepid Subs) as the new 
subbareboat charterers of the Vessels.\1\ Intrepid Ship Management, 
Inc., a subsidiary of MTC, was formerly named OMI Ship Management, Inc. 
In carrying out its obligations as the operator under the ODSAs, each 
Intrepid Sub may contract for specific management and technical 
services with MTC or subsidiaries of MTC.
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    \1\ By letter dated October 21, 1998, Occidental Chemical, Ocean 
Chemical Transport and Ocean Chemical Carriers support the request 
of MTC for Ocean Chemical Transport and Ocean Chemical Carriers to 
assign the ODSAs to subsidiaries of Intrepid Ship Management a 
subsidiary of MTC.
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    As part of these transactions, the bareboat charters, the Title XI 
Reserve Fund and Financial Agreement, and the Depository Agreement 
would be assigned to and assumed by the appropriate MTC Subsidiaries 
and the current bareboat charterer would be released therefrom. The 
Vessels would continue to be operated in the international trade for 
the duration of their ODSAs.
    Concurrently with the transfer of the interest in the trust that 
holds legal title to the Vessels, the ODSAs would be assigned to and 
assumed by the appropriate Intrepid Sub and Ocean Chemical Transport 
and Ocean Chemical Carriers would be released therefrom.
    Concurrently with the transfer of GECC's interest in the trust that 
holds legal title to the Vessels and the assignment of the ODSAs, the 
Vessels would be time chartered to a joint venture to be formed by MTC 
and Stolt Nielsen. The Joint venture, a foreign corporation to be 75 
percent owned by MTC and 25 percent owned by Stolt Nielsen, would be 
called Stolt Marine Transport (SMT). SMT would, in turn, sub-time 
charter the Vessels to Stolt Product Tankers, Inc. The sub-time 
charterer would employ the Vessels in accordance with the prevailing 
market conditions.
    MTC and its related companies request permission pursuant to 
section 805(a) of the Merchant Marine Act, 1936, as amended (Act), to 
continue to own, operate, or charter vessels in the coastwise trade (or 
to own a pecuniary interest in entities that own, operate, or charter 
vessels in the coastwise trade) following the approval of each Intrepid 
Sub as operator under the appropriate ODSA.
    MTC and its subsidiaries currently own 14 U.S.-flag vessels and 
manage 17 Ready Reserve Fleet vessels and 6 privately owned U.S.-flag 
vessels. Listed below are those U.S.-flag vessels that are owned and/or 
operated by MTC in the

[[Page 58457]]

domestic trade showing areas of specific service:

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            Owned vessels                   Area of operation                Cargo type             Size  (DWT)
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MARINE CHEMIST......................  West Coast..................  Chemical Parcel.............          35,941
MBC-1 (Barge).......................  Gulf of Mexico or Gulf to     Chemical Parcel.............           4,000
                                       Puerto Rico.
MBC-2 (Barge).......................  Gulf of Mexico or Gulf to     Chemical Parcel.............           4,000
                                       Puerto Rico.
MARINE DUVAL........................  Texas to North Carolina.....  Molten Sulphur..............          25,131
MARINE COLUMBIA.....................  Alaska Trade................  Crude Oil...................         138,698
PATRIOT.............................  Spot Trade..................  Product Carrier.............          35,662
COURIER.............................  East Coast..................  Product Carrier.............          35,662
Vessels Operated For Other Owners:
CHEMICAL PIONEER....................  Gulf of Mexico to New Jersey  Chemical Parcel.............          35,491
BT ALASKA...........................  Alaska Trade................  Crude Oil...................         191,120
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    MTC advises that simply changing the operator of the Vessels for 
purposes of the ODSAs will not change the competitive marketplace for 
any U.S.-flag vessels operating exclusively in the coastwise trade in 
competition with MTC's current U.S.-flag vessels. MTC claims non-MTC 
U.S.-flag vessels will face exactly the same competitive conditions 
after the transfer of the ODSAs as they do today. Therefore, according 
to MTC, no unfair competition within the meaning of section 805(a) of 
the Act will result from the assignment of the ODSAs.
    MTC states that permitting MTC to undertake activities relating to 
coastwise vessels following the transfer is also consistent with the 
objects and policies of the Act. MTC states it is the oldest and one of 
the largest shipping companies in the United States and is known for 
its long-term relationships with its customers. MTC states it is a 
strong competitor as a shipowner and ship operator in the U.S. maritime 
industry. MTC advises that permitting MTC to continue to operate under 
the U.S. flag for the duration of the ODSAs supports, advances and 
promotes the U.S. merchant marine industry.
    MTC advises that no subsidy received by MTC pursuant to the ODSAs 
will be used to benefit MTC's non-subsidized coastwise operations. 
Under modern banking and accounting practices, according to MTC, it is 
easy to audit the use of subsidized funds by the appropriate Intrepid 
Sub and provide needed assurances that funds will not be co-mingled or 
used for non-subsidized purposes.
    As a final matter, Intrepid and MTC note that its request for 
permission under section 805 does not involve any issue of material 
fact that cannot be resolved promptly on the basis of available 
information.
    Pursuant to sections 608 and 805 of the Act, and Article II-16 of 
the ODSAs, Ocean Chemical Transport, Ocean Chemical Carriers, GECC, 
Fleet National Bank, N.A., MTC, the MTC Subsidiaries, and each Intrepid 
Sub requests approval of the following:
    1. Assignment of the ODSAs to the appropriate Intrepid Sub;
    2. Designation of each Intrepid Sub as the Operator pursuant to the 
appropriate ODSAs;
    3. Permission pursuant to section 805(a) of the Act for MTC to 
operate vessels in the coastwise trade; and
    4. Such other approvals as may be required for the above-described 
transactions.
    Any person, firm, or corporation having any interest in the 
application for section 805(a) permission and desiring to submit 
comments concerning the application must file written comments in 
triplicate, referring to the docket number that appears at the top of 
this document with the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 
Seventh Street, SW, Washington, DC 20590. The petition should state 
clearly and concisely the grounds of interest and the alleged facts 
relied on for relief. Such comments must be filed no later than 5:00 
P.M. Eastern Time, November 13, 1998.
    If no petitions for leave to intervene on section 805(a) issues are 
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.
    The application and all comments received will be available for 
examination at the above address between 10 a.m. and 5 p.m., e.t. 
Monday through Friday, except Federal Holidays. An electronic version 
of this document is available on the World Wide Web at http:/
dms.dot.gov.

(Catalog of Federal Domestic Assistance Program No. 20. 805 
Operating-Differential Subsidies (ODS)).

    By order of the Maritime Administrator.

    Date: October 27, 1998.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 98-29149 Filed 10-29-98; 8:45 am]
BILLING CODE 4910-81-P