FEMA Pays 192 Million For Cruise Ships It Could Have Got For Free

Discussion in 'Current Events' started by GotZoom, Oct 5, 2005.

  1. GotZoom

    GotZoom Senior Member

    Apr 20, 2005
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    Cordova, TN
    Greece offered (I believe) three of their cruise ships for free - FEMA turned them down.


    WASHINGTON · The government's controversial agreement to lease three ships from Carnival Cruise Lines for emergency housing after Hurricane Katrina provided more benefits to the company than have previously been disclosed, according to contract documents.

    But it also includes a clause, inserted late last week at the company's request, that calls for returning any excess profit. The clause provides for Carnival to determine voluntarily and "on a good faith basis" whether it has made too much money on the deal and should offer the government a refund. Yeah..right...."Oh..we made too much money..."

    Among the disclosures, the deal requires the government to pay any additional costs the company incurs by having to hire American workers instead of foreigners.

    As previously reported, the contract will give Carnival $192 million over six months for providing about 7,100 berths, originally intended for evacuees but now being used mostly for emergency workers. And the company will be reimbursed for up to $44 million in operating costs to cover its fuel, waste removal and piloting expenses.

    Amid mounting criticism, Carnival has maintained it will make no additional profit beyond what it would have earned from the three ships under normal operations. This week, for the first time, Carnival spokeswoman Jennifer de la Cruz said that a provision in the contract calls for it to return "any excess profit" above that amount.

    She said this concept "was part of our discussions with the government from the outset" leading to the Sept. 2 deal. But she said final negotiations, including the "profit neutrality clause," were completed only last week.

    Timothy M. Boulay, a spokesman for the Navy's Military Sealift Command, which negotiated the deal with Carnival at the direction of the Federal Emergency Management Agency, said that any refund would be voluntary and based on a good-faith estimate by the company.

    He confirmed that the repayment clause was broached by the company as far back as Sept. 2 and was inserted in the contract on Sept. 30 that "finalized all the elements of the original deal." The original contract documents, which include the award notice and Carnival's "final offer," don't mention the clause.

    On Monday, Carnival CEO Bob Dickinson sent a letter to members of Congress saying that after the completion of the charter, Carnival would "review the expenses incurred and will return monies ... if necessary to achieve the goal of profit neutrality."


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