Editor's Note: Maritime Administrator Sean Connaughton
discussed the Title XI ship financing program with Bernie
Jacobson during a break at a meeting of the Marine Board of the
National Academies held in Portland, Maine, in May.
WB: Do you visualize Title XI funding as one of the elements
for America's marine highway?
Snnb Connaughton: If they meet the criteria. I am aware of
some Congressional interest in using the program to support
marine highway projects. However, marine highway use is not the
criteria that we utilize in determining whether or not to give
Title XI financing. We have statutory and regulatory guidelines
that we employ to make a determination as to whether a project
is eligible and whether it meets creditworthiness tests.
WB: What are your feelings about expanding the Capital
Construction Fund for the coastal trades?
Connaughton: Right now, the Department of Transportation is
considering its own legislative proposal for the American
Highway Initiative, and the House Transportation and
Infrastructure Committee has introduced its own bill with a
marine highway component. We are looking at every aspect of
this issue and utilization of the CCF is one option that can be
considered.
Snnb WB: There has not been a Title XI default in over five
years and the majority of Marad's current portfolio consists of
transactions approved prior to the implementation of auditing
recommendations from the Inspector General and the Government
Accountability Office. Do you see the added time and expense
associated with those recommendations as cost effective?
Snnb Connaughton: Well, I'd like to think that the addition
of these standards and review processes has helped lead to the
diminishing number of defaults. The program is much better
managed and administered, and we keep much closer tabs on those
who have Title XI guarantees to the point that we work with
them to try to avoid a default before it occurs. So, that has
had a major impact. I have met with several Title XI
guarantee-backed operators to see what we can do to avoid
defaults, which I think has maybe had more of an impact than
many of the issues evaluated in the project review process.
Snnb