FOR IMMEDIATE RELEASE                      MAR 10-96
Tuesday, September 24, 1996                Contact:  John Swank
                                           Tel.: (202) 366-5807
U.S. Transportation Officials Laud
Passage of Maritime Security Act

Secretary of Transportation Federico Peña today thanked Congress for its strong, bipartisan support of the Maritime Security Act, which President Clinton soon will sign into law.

The Senate gave final Congressional approval to the bill Tuesday (Sept. 24) evening. The House of Representatives passed the bill last December and twice had voted overwhelmingly for the bill in 1993 and 1994.

"Congress has acted responsibly in assuring that the United States will continue to have a fleet of U.S.-flag commercial cargo vessels," Secretary Peña said. "This makes good sense for the United States strategically and economically."

The vessels, owned by U.S. shipping companies and crewed by loyal American seafarers, will carry military cargo and supplies when called by the Secretary of Defense as they have done faithfully in all previous wars and conflicts.

"Maritime security is an important program and has never been an issue," Secretary Pea stressed. "All along, it has had strong support. I particularly applaud the work of Senate leaders to bring it to a vote before Congress adjourns for the year."

The Maritime Administration, an agency of the U.S. Department of Transportation, is preparing to implement the new program, said Maritime Administrator Albert J. Herberger. These vessels play an important role in international commerce when a U.S. presence is needed to assure carriage of vital imports and exports during wartime and during peace.

Under the Maritime Security Program, the government will contract with owners and operators of U.S.-flag commercial ships employing U.S. citizen crews. The vessels must be militarily useful, and will be available to carry sustainment supplies and other military equipment to troops in areas of conflict.

"High technology U.S.-flag ships crewed by civilian American seafarers and the logistics networks developed by U.S.-flag shipping companies are a cost-effective source of military sealift," Herberger said. "In addition, they provide an indispensable link to the worldwide commercial intermodal transportation system."

Here are some highlights of the Maritime Security Program:

LENGTH: 10 years, subject to annual appropriations.

NUMBER OF SHIPS: The Maritime Security Act authorizes funding for up to 47 vessels.

ANNUAL COST: Up to $100 million, subject to appropriations; $46 million is currently available from funds already appropriated.

SAVINGS: The Maritime Security Program is one half the annual cost of the existing operating-differential subsidy program.

DEREGULATION: Carriers will have the flexibility to operate freely in the competitive world market. Trade route and service restrictions previously required under the operating-differential subsidy program will be eliminated, as will authority to enter into new contracts under the old program.

SERVICE OBLIGATION: Participating shipowners must enroll in an Emergency Preparedness Program established to provide sealift support in time of war or national emergency at the request of the Secretary of Defense. The commercial transportation resources to be provided will include ships, capacity, intermodal equipment, terminal facilities, communications and cargo tracking systems, and management services.

PAYMENT: $2.1 million per year per ship.

ELIGIBLE VESSELS: Commercially and militarily useful ships.