MarAd Gives Go-Ahead To Extend Cherry Valley's Subsidizable Life

The MarAd and Maritime Subsidy Board have agreed to a request from Margate Shipping Co. to extend the subsidizable life of the 38,000-dwt tanker Cherry Valley until February 28, 1997.

Without action, the subsidizable life would have expired July 9. The vessel was built by National Steel and Shipbuilding Co. (NASSCO) of San Diego, and delivered to Margate on July 10,1974.

In its application, Margate said it requested the extension, under section 605 of the Merchant Marine Act, when the operating differential subsidy (ODS) expires on Chestnut Shipping Co.'s contract, which would then make the Cherry Valley eligible to receive subsidy sharing up to that time. Under the subsidy sharing arrangement, the vessel shares subsidy with vessels under Chestnut's contract and Margate's other contracts.

In addition, Margate indicated that the subsidy sharing received by the Cherry Valley would not increase the dollar amount of the present subsidy contracts, as no additional subsidy money would be required.

Section 605(b) states that ODS shall not be payable for tankers over 20 years old "...unless the Secretary of Transportation finds that it is in the public interest to grant such financial aid for the operation of such vessels and enters a formal order thereon."

Other stories from September 1994 issue


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