In light of what appears to be conflicting statements of intent, a clarification of the plans for the N.S. SAVANNAH would seem to be in order and, accordingly, I would like you to answer the following questions. 1. Is the layup of the SAVANNAH intended to be implemented as indicated in the budget message? 2. If the layup is planned, will it be temporary or permanent? 3. If permanent, does this imply that the Maritime Administration is terminating its consideration of future nuclear ships? 4. Was the SAVANNAH operating budget requested by the Maritime Administration reduced by the Bureau of the Budget or was the Maritime Administration request limited to the $1,700,000? 5. Does the $1,700,000 represent the total amount required to fully deactivate the ship and transfer it to the reserve fleet? 6. Will the $1,700,000 account for disposal of the nuclear servicing facility together with the spare and spent fuel assemblies and other support facilities? 7. What are the Maritime Administration's projected total costs for a temporary and permanent layup of the SAVANNAH? 8. Could the SAVANNAH be operated for less than $3.4 million in some form of austerity program pending the completion of plans for advanced nuclear ships? If so, what are the details of such a program and its projected operating cost? 9. One American-flag operator is presently converting a number of ships that are similar to Savannah into containerships at a considerable expense. The government is funding about 50 per cent of these costs. Could the Savannah be converted in such a manner? 10. In your testimony before the Committee on Merchant Marine and Fisheries of the House of Representatives on November 6, 1969, you stated that you plan to use the forthcoming year to prepare for an ongoing nuclear merchant ship program. Consistent with such a program, what would be the projected costs of continuing the Savannah in operation during Fiscal Year 1971? Your replies to the questions contained in this letter will assist the Committee in considering the funds to be authorized for the operation of the Maritime Administration and in considering the proposed new maritime program now pending before this Committee. Consequently, your earliest response would be appreciated. Sincerely yours, WARREN G. MAGNUSON, Chairman. U.S. DEPARTMENT OF COMMERCE, Hon, WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: Your letter of February 9, 1970 requests information concerning the plans of the Maritime Administration for future utilization of the N.S. SAVANNAH. Answers to your numbered questions have been provided as an attachment to this letter. In the 1971 Presidential budget document several program terminations and reforms were identified which resulted in a Governmentwide reduction in budget authority amounting to $2.4 billion. One of the included items called for the layup of the N.S. SAVANNAH and resulted in a reduction of $1.7 million for fiscal year 1971 below the 1970 rate of $3.4 million. We believe the operation of the SAVANNAH in commercial service over the past three years and the previous experience as an experimental vessel had fully proven the results which the SAVANNAH was designed and built to achieve. In this sense, the SAVANNAH has been a complete success. The SAVANNAH was not designed to compete in commercial service; therefore, we do not believe it worthwhile to continue the commercial operation of the SAVANNAH. As indicated in our answer to question 3, we do not consider the deactivation of the SAVANNAH to represent a termination of the nuclear ship program. We fully intend to continue research that should yield a nuclear propulsion system which can be utilized in the future in the construction of nuclear merchant ships. I am looking forward to discussing this matter with you and the Senate Commerce Committee at your earliest convenience. Sincerely, ATTACHMENT ROBERT J. BLACKWELL, Acting Maritime Administrator. Reply to questions contained in letter from Honorable Warren Magnuson, Chairman, Senate Commerce Committee to Honorable Andrew E. Gibson, Maritime Administrator, dated February 9, 1970. Question No. 1: Is the layup of the SAVANNAH intended to be implemented as indicated in the budget message? Answer: Yes, however the present plan is to continue to operate the N. S. SAVANNAH through the remainder of this fiscal year. Question No. 2: If the layup is planned, will it be temporary or permanent? Answer: The $1.7M allocated for this program will not permit the vessel to be fully deactivated in fiscal year 1971; however, a limited amount of preliminary planning for overall defueling and total deactivation can be expected within the limits of the fiscal year 1971 funding. For the purposes of budget allocation, the Maritime Administration is projecting fiscal year 1972-fiscal year 1974 funding requirements that will include total deactivation, defueling and transfer of vessel to the reserve fleet. Question No. 3: If permanent, does this imply that the Maritime Administration is terminating its consideration of future nuclear ships? Answer: The Maritime Administration does not consider the deactivation of the Savannah to represent a termination of the nuclear ship program. There are presently two programs planned for fiscal year 1971 that will fully explore the potential advantages offered by nuclear propulsion. These programs will be expected to yield a nuclear propulsion system appplication consistent with the overall transport system requirements in each program to be considered. Question No. 4: Was the Savannah operating budget requested by the Maritime Administration reduced by the Bureau of the Budget or was the Maritime Administration request limited to $1,700,000? Answer: The original Maritime Administration request was considerably higher than was finally allocated, however, a review of overall program goals dictated that the revised budget figure of $1.7M would be in keeping with the total program objectives. Accordingly, the reduction to the present budgeted figure is consistent with the Maritime Administration nuclear ship program plan for fiscal year 1971. Question No. 5: Does the $1,700,000 represent the total amount required to fully deactivate the ship and transfer it to the reserve fleet? Answer: The $1.7M will provide sufficient funds to initiate the total deactivation of the vessel. The budget identifies these funds for the "initial phase of layup." 4 Additional funds will be requested for total layup and transfer to the reserve fleet of the vessel for the purpose of planning the fiscal year 1972 through fiscal year 1974 budget. The costs associated with a final program termination are presently being developed for further review. Question No. 6: Will the $1,700,000 account for disposal of the nuclear servicing facility together with the spare and spent fuel assemblies and other support facilities? Answer: The $1,700,000 allocated in the fiscal year 1971 budget will not provide for the disposal of the fuel that is presently on hand. Additional money will be required for removal of spent fuel, transfer and disposal. Further funds will be required for close-out of the present servicing facilities in Galveston, Texas. Question No. 7: What are the Maritime Administration projected costs for a temporary and permanent layup of the SAVANNAH? Answer: A temporary layup cost of the vessel is being considered and based on a 1-year and 3-year idle period. Preliminary cost indicates that a 1-year layup with operation being resumed at the beginning of the second year would require a first year cost of about $1.7M with a second year cost of about $4.0M. A 3-year |