Kuwait, which once sought to appease congressional critics of its reflagging arrangement by chartering two U.S.-flagged supertankers, has backed out of a lease on one and never bid on the second, according to the Maritime Administration and congressional sources.
The Kuwaiti decision Dec. 11 to cancel its two-year charter of the 264,000-ton Maryland came after expenses to make the supertanker seaworthy and meet U.S. standards exceeded by $1.5 million the projected $2.5 million renovation cost.
The Maritime Administration (MARAD) had also put the similarly sized supertanker New York up for bid in the expectation that Kuwait would charter it. But a MARAD spokesman said Kuwait never bid on the New York and that none of the bids from other sources was acceptable.
The spokesman said the New York might now be sold for scrap.
Drydocking and repair costs on the unused New York were expected to exceed the $4 million that MARAD, which owns both supertankers, has spent rehabilitating the Maryland.
MARAD had asked Kuwait to absorb $1 million in additional repair costs on the Maryland, but the Kuwaitis refused, congressional sources said. Kuwait also refused a MARAD request to extend the life of the charter agreement in order to help offset the unexpectedly high costs.
It was not immediately clear whether Kuwait was put off by the high cost of repairs on the two ships or has changed its policy about using supertankers under either Kuwaiti or American flags in the Persian Gulf, where Iranian and Iraqi attacks on shipping are mounting.
Kuwait has already pulled its biggest U.S.-flagged supertanker, the 401,000-ton Bridgeton, out of the gulf trade after it struck a mine last July and spent two months undergoing repairs at a drydock in the United Arab Emirates. The Bridgeton was the only Kuwaiti-owned reflagged ship capable of carrying crude oil.
On the other hand, there are few seaworthy American-owned supertankers available for charter and Kuwait may have decided to look elsewhere. No Kuwaiti Embassy spokesman was available to explain the decision to cancel the charter agreement.
Sen. Frank H. Murkowski (R-Alaska) said he was "obviously disappointed" by Kuwait's move.
He has been seeking to persuade Kuwait to give some business to American firms, arguing that this would help to build more support in Congress for the administration's policy of providing military escorts for 11 Kuwaiti ships under the U.S. flag.
"I am not pleased that our government has failed to convince the leaders of Kuwait of the significance of leasing U.S. tankers," Murkowski said in a statement released late last week. "Rather than putting our flag on Kuwaiti tankers, we should be employing U.S. tankers and crews."