Page 16: of Maritime Reporter Magazine (June 2014)

16 Maritime Reporter & Engineering News • JUNE 2014

U.S. MARITIME ADMINISTRATOR

A s a reader of Mari- time Reporter &

Engineering News, you’re probably fa- miliar with Title XI shipbuilding loan guarantees and the program’s impor- tance to the U.S. Maritime Industry. The

Title XI program—administered by the

Maritime Administration (MARAD)— has long provided full faith and credit loan guarantees by the Federal Govern- ment of private sector debt acquired to build vessels in U.S. shipyards. While the Title XI program’s principal objec- tive is to promote the growth and mod- ernization of the U.S. Merchant Marine and U.S. Shipyards, it also enables our nation to maintain a presence in our wa- terborne commercial and military supply chains—serving as an essential compo- nent of sound U.S. economic and secu- rity policies.

Today the program is represented in almost every maritime market segment and geographic region, and I think most maritime stakeholders recognize its val- ue to our industry.

In a large part driven by our country’s continuing natural gas boom, the U.S. maritime industry is currently seeing robust shipbuilding activity, the most in over three decades. Over 20 large, self- propelled, oceangoing Jones Act-eligible tankers and containerships are under construction or are on-order at U.S.

Shipyards and MARAD wants to ensure that the Title XI Program continues to support this trend. To that end, MARAD recently issued a Federal Register Notice to propose that the criteria used to grant

Title XI loan guarantees include vessels powered by alternative energy sources like lique? ed natural gas (LNG) should be considered.

While maritime industry trends are of- ten unexpected and rarely coincide with the Federal budget cycle, MARAD cur- rently holds suf? cient funding to support $735 million in Title XI loan guarantees and we fully intend to use it. And with the surge in shipbuilding we’re experi- encing, MARAD is working overtime to improve our management of the pro- gram.

I’m happy to announce MARAD’s recent installation of Owen Doherty as

Associate Administrator of the Title XI program.

A longtime MARAD employee (most recently as Director of our Of? ce of Se- curity), Owen brings a solid work ethic, decades of maritime industry experi- ence, and a U.S. Merchant Marine Acad- emy and Naval War College education to the Title XI program.

Our new Associate Administrator isn’t the only Title XI-related change in per- sonnel at MARAD. We have also in- creased our in-house ? nancial expertise by incorporating additional staff into the Of? ce of Marine Financing. This includes an on-site ? nancial analyst to assist with efforts to develop a new risk- assessment model and timeline for credit watch reports. Additionally, MARAD increased the number of ? rms conduct- ing independent ? nancial analysis (IFA) under contract with the government to ensure more industry-knowledgeable analysts are available to speed the Title

XI process and provide competition for the work. This move will help us de- termine best practices to structure loan guarantees, and in the long term, it will save taxpayer dollars and expedite qual- ity ? nancial reviews.

MARAD has also been targeting as- pects of the program that can be simpli- ? ed and made more ef? cient. On this front, we have engaged the services of an external consultant to obtain an inde- pendent review of the program and help identify areas for further improvement.

For example, to increase the ef? ciency of the review process, MARAD now requires that we receive all information before we will consider an application complete.

Having all information submitted at the outset will considerably cut down the average processing time to approve loan guarantees.

Furthering the effort to make the anal- ysis process timelier, we now directly complete the IFA contracting process.

This has already had a substantial effect on our procedures, cutting months off the time to award the IFA contract.

At MARAD, we understand the impor- tance of Title XI funds to our industry.

Our recent efforts can be just the “nudge” that some ? eet- and/or capacity-building initiatives need to move ahead, and they can be a major boon to both vessel own- ers and shipyards.

To ensure that the program continues to have a positive impact on our na- tion’s ships and shipyards, we are forg- ing ahead with our evolution of the pro- gram’s management—so regardless of any potential ? ux in funding, applicants will be able to timely capitalize on the opportunity that Title XI offers.

Paul “Chip” Jaenichen, Acting Maritime Administrator weighs in on

Title XI

While maritime industry trends are often unexpected and rarely coincide with the Federal budget cycle, MARAD currently holds suffi cient funding to support $735 million in Title XI loan guarantees and we fully intend to use it.

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