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A
comfortably-appointed passenger ship that United
Nations peacekeepers in earthquake-battered
Haiti call home is still on duty, its rental
meter running at $72,500 per day. The tab for
U.N. member states is more than $6.5 million
since March and counting.
Both
the 480-foot vessel named Ola Esmeralda, and its
smaller companion the Sea Voyager known
among U.N. staffers as the "Love Boat"
have been generating controversy ever since
their arrival in Haiti was reported on by Fox
News.
On
May 11, the Love Boat left Haiti after
completing its 90-day initial contract with the
U.N. at a cost of roughly $3.5 million. A
recent U.N. peacekeeping budget, however, has
set aside an additional $6.5 million for Ola
Esmeralda to cover rental until the end of
August.
According
to an expert in international shipping operations,
management and finance consulted by Fox News,
however, that $13 million projected tab for Ola
Esmeralda, an 11,000-ton Venezuelan-registered
vessel whose owners have close ties to the Hugo
Chavez government, is "outrageous,
ridiculous, whatever bad words you can use. I'd
love to have that contract."
He
estimates that the ship deal is spinning off
cash for its owners at a rate that is two or
three times what is normal for the "flotel"
floating hotel business.
The
expert's estimate of the lucrative nature of the
Ola Esmeralda contract raises new questions
about the choice of the vessel for U.N.
peacekeeping work
by
the agency that struck the deal, the World Food
Program (WFP).
According
to WFP, Ola Esmeralda was chosen after rigorous
competitive bidding, in which five different
vessels were vying for the job on the basis of
the lowest competitive price. Said a WFP
spokesman: "The Ola Esmeralda is relatively
old and was the most cost effective in terms of
price per cabin."
The
expert consulted by Fox News, however, was
skeptical. His conclusion: "It's a dream
deal for somebody."
Using
the "most generous" operating cost
assumptions, plus the actual technical
specifications of the ship, the expert concluded
that the U.N. is paying at least 100 percent
more than Ola Esmeralda costs to operate a
tally that the expert said should be no more
than $36,200 per day.
That
would leave an estimated excess of revenue over
operating expenses of more than $36,280 per day,
and even after making further allowances for
administrative overhead, the Ola Esmeralda is
likely generating a cash flow for its owners of
at least $29,000 per day more than $2.6
million during its first three months in Haiti.
Normal
cash flow in the floating hotel business, the
expert said, would be more like $10,000 to
$15,000 a day.
Indeed,
the operating costs for Ola Esmeralda could be
even lower than that, the expert concluded
and the cash flow could be a lot higher. Among
other things, Fox News' expert who requested
anonymity based his cost calculations on the
likelihood that Ola Esmeralda, which can carry a
maximum of 482 passengers, was hosting 375 U.N.
staffers per day, or 78 per cent capacity.
According
to a spokesman for the U.N. peacekeepers the
ship has recently been hosting about 250
passengers, or 52 percent capacity.
That
should lower expenses for such things as hot
meals, laundered sheets and other personal
services all of which make Ola Esmeralda a
luxury pit-stop on the ravaged island by
another 25 percent, and add another estimated
$1,400 per day to Ola's potential profit
margins.
"These
are huge, huge commissions," said the
expert. "Somebody's making a fortune."
Fox
News first revealed the murky ownership details
of Ola Esmeralda last April, as the U.N. agency
that contracted for the vessel, the World Food
Program, was ridding its web-site of a photo-essay
and story about the two ships' arrival.
According
to WFP, the ship's owner is a Miami company
called Lighthouse Ship Management
LLC, whose office address is that of a suburban
Miami residence.
But
in fact, as of the end of January 2010, the
registered owner of the Ola Esmeralda, according
to official ship registries, is a Venezuelan
company, Servicios Acuaticos de Venezuela, C.A.,
or Saveca. Lighthouse Ship Management is the
vessel's manager, a fact confirmed to Fox News
by a Saveca executive who otherwise declined to
answer questions.
Saveca,
in turn, boasts on its website that it has an
"alliance" with a Venezuelan shipyard,
Dianca, that is jointly owned by the Chavez
government and its state-owned oil firm.
Neither
Saveca nor Lighthouse Ship Management has
answered questions about their relationship
initially posed by Fox News in April.
Through
a spokesman, however, WFP has tersely defended
to Fox News both its procurement procedures in
the Ola Esmeralda selection and the cost of the
ship's rental. According to the spokesman, ten
ships were originally offered for the contract,
and half of them survived a technical analysis
to determine if they could adequately provide
the required services.
Ola
Esmeralda was chosen from among the surviving
five on the basis of lowest price bid, WFP's
spokesman said.
When
informed that Fox News had been told the cost of
renting the Ola Esmeralda was considered to be
high, the spokesman replied that its expenses
included "refueling costs over a
three-month period, and food requirements of
passengers."
"Refueling
costs alone account for almost one-third of the
daily rate," the agency's spokesman
declared.
Fox's
expert agreed that fuel costs made up one-third
of his own estimated operating costs for the
vessel but that was $12,000 out of an
estimated total expense of $36,200, rather than
the $72,500 the U.N. is paying for the ship.
He
based his estimate on normal commercial
rates for fuel oil and lubricants and the
consumption rates of the diesel
"generator" engines listed in Ola
Esmeralda's specifications. He noted that in a
moored "flotel," those
"generator" engines would be used to
produce roughly 4,000 kilowatts of energy per
day for the vessel in port, rather than the main
engines, which are used to propel the ship at
sea and which use much more fuel.
The
Fox News expert's numbers also included food and
laundry services for a crew of 150 plus the 375
assumed passengers.
"The
galley and housekeeping is where the real labor
is aboard this kind of ship," he said, and
those workers are often less expensive than the
operating crew.
According
to the shipping expert, it would be "very
difficult" for any costs to be higher than
his estimates, given the labor markets and wage
rates in the Caribbean zone where Ola Esmeralda
operates.
As
for food costs, he mused, "maybe they're
flying in porterhouse steak and lobster tails.
But I don't think so."
George Russell is executive editor
of Fox News.
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