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"3. Accumulation of additional operating and technical data as a basis for improved design and operational procedures.
"4. Development of a safety record for consideration by the insurance fraternity to reduce or minimize the basic uncertainties involved in nuclear ship operation and thereby tend to reduce future liability requirement costs."
Are you in agreement, Admiral, with the Maritime Administration that the continued operation of the Savannah in either one of the three methods would accrue to this country of ours the specific benefits that are spelled out on page 11 of Mr. Davis' statement?
Admiral WILL. Without any reservation, yes, sir.
Mr. LENNON. Well, it is difficult for me to see how the Department of Commerce, if it accepts their own recommendations and their own beliefs, could have ever considered the withdrawal and even the temporary laying up of this vessel for 1 year when even the Maritime Administration, which had this responsibility, comes up and tells this committee that, in its judgment, the continued operation of the Savannah in those three ways would inure to this country the benefits enumerated in those four specific categories.
I don't see why you couldn't have argued down the Department of Commerce, talking of my friends in the Maritime Administration. Do you want to comment on this?
Mr. SULLIVAN. I could, if you would like just a very few words. The decision that has been made in the budget proposal, as I understand, was based on dollars available in the light of other things going on in the country. These particular benefits that we both agree to, the benefits where they would apply would be in a future utilization of nuclear power, not the Savannah itself.
Mr. LENNON. For the record, how does the Maritime Administration differ with the statement that Admiral Will has just read. Let's get both sides of the coin and lay it in the record.
Mr. SULLIVAN. I didn't see too much difference between the two statements, sir. The costs involved are quite similar.
Mr. ASHLEY. Will the gentleman yield?
Mr. LENNON. I yield.
Mr. ASHLEY. I will point out one slight area of difference which occurs on page 9 of the statement by Mr. Carl Davis when he says: "Even if the vessel is utilized to 100 percent capacity, it cannot be operated at a profit. Any further information cannot be justified due to the high cost of operation."
That is, as I see it, the essence of Mr. Davis' statement this morning. That certainly is the conclusion he reaches.
The Admiral reaches a diametrically opposed conclusion, is that so, Admiral?
Admiral WILL. No, I don't try to say that you can operate this ship at a profit when all the costs are considered, Mr. Ashley. That is at a profit where you take all of her costs and attempt to recover those costs through generated revenue, cargo revenue, and without a sizable subsidy.
Mr. ASHLEY. Also, in the second part of his statement he said, "Any further information cannot be justified due to the high cost of operation."
It seemed to me that you are saying that there is additional information which offsets the deficit in revenue.
Admiral WILL. Mr. Ashley, the Maritime is saying that based on their position in having to cut dollars out of their budget, since they cannot show that the Savannah can be operated at a profit, but must expend budget dollars, therefore, they have to lay it up.
Mr. LENNON. I thank the gentleman. I was glad to yield to him. Now I return to you, sir. The Admiral has, I think, appropriately laid stress on what is going to happen to these men who have been trained and are now serving on the Savannah when she is laid up effective August of 1967. What, in your judgment, is going to happen to those men? Where are they going to continue their technology and skills?
Admiral WILL. I think many of them are going to these nuclear services contracting companies that are looking for nuclear competence because they will go back to their jobs on conventional ships at no more pay than they are getting now. That was one of the requirements that we insisted on when we offered to reactivate the Savannah and operate her as general agent for the goot. We would not pay our Savannah crew any more than we paid our crews on conventional ships and they accepted that.
So that I am afraid that they will just be dispersed to nuclear industry and disappear.
Mr. LENNON. I would like for the gentleman from the Maritime Administration to comment on that question. I really directed it to you, sir.
Admiral WILL. I am sorry, Mr. Lennon.
Mr. LENNON. I am happy to have your statement.
Mr. SULLIVAN. Sir, I think that the problem is certainly a very, very important one to the effect that we need these men or men like them, and without a program you can't keep them.
Mr. LENNON. While they may go into various fields that you have assigned to them, at the same time they are not going to get the practical, everyday application of their nuclear experience except on a nuclear operated vessel, are they? Wouldn't you agree to this? Mr. SULLIVAN. Certainly not to the same extent.
Mr. LENNON. And we certainly, within this next year, will not be training additional people in the field of nuclear sciences as related to merchant marine vessels, will we?
Mr. SULLIVAN. If temporary training is carried out, you probably would have the low cadre of the training program but not the officers of the fleet.
Mr. LENNON. Assuming that the vessel is laid up in August, which I hope it will not be, in what time frame do you think the Maritime Administration and the Department of Commerce is going to come to a decision and make that decision public with respect to its ultimate recommendation of the method in which the Savannah should be used finally phased out, decontaminated, deactivated, put in the rust bucket fleet or what? When will we know?
Mr. SULLIVAN. Well, in something as complex as the Savannah, and believe me it is, when a problem like this arises such as when we first put the Savannah into commercial operation with FAST, there
are so many matters that must be considered and taken care of that we have to have a very carefully planned schedule of events to carry that out.
In this case the same thing is true and we do our best to maintain that schedule. At the present time I believe it was June 15 where we have our red star in our particular office, but that is our planning as to the final time when a decision could be made to properly notify FAST and properly get plans organized for such disposition of the ship.
Mr. LENNON. Just for the record, when did the Department of Commerce notify the Maritime Administration that it had made its decision to deactivate the Savannah effective in August of this year?
Mr. SULLIVAN. I think Mr. Miller could probably answer that better. He is our budget officer.
Mr. MILLER. Congressman, I don't have the piece of paper with me, but it was in the area of September or October that the discussions occurred about this.
Mr. LENNON. Did the Department of Commerce recommend to the Bureau of the Budget the continued funding of the Savannah for fiscal 1968 and the Budget turned it down, or did the Department of Commerce not recommend it?
Mr. MILLER. The Department of Commerce in forwarding its request did not carry a recommendation other than layup.
Mr. LENNON. The Department of Commerce, then, did not request funds from the Bureau of the Budget?
Mr. MILLER. In its submittal did not cover other than layup of the ship.
Mr. LENNON. This was a Department of Commerce decision and not a Bureau of the Budget decision, was it not?
Mr. MILLER. I am not in a position to answer that because there were certain discussions that were held following this. In other words, when the recommendation went forward I am not aware of what occurred between the Department and the Bureau as to the final decision necessarily, you see.
Mr. LENNON. Would it be an invasion of the executive prerogative if we could have for this record the exchange of correspondence or any memorandums between the Budget Bureau and the Department of Commerce on the subject of the exclusion from the budgetary funds for fiscal 1968 for the operation of the vessel ?
Mr. MILLER. Unfortunately, not being a lawyer, I am not sure of your point about the executive privilege, but insofar as I know there was no back and forth correspondence. It was a matter of negotiations and I know of no particular piece of paper that exists that I have concerning this. But let me say further that if the Congressman wishes, we will look into this and see if anything exists.
Mr. LENNON. I am going to make the request. I would like for the record to show that I made the request of the Department of Commerce to furnish the committee for this hearing record any communications, correspondence, or memorandums that might have passed between the Department of Commerce and the Bureau of the Budget relative to the funding for fiscal 1968 of the continued operation of the Savannah.
(The following was supplied in response to the above request :)
Aside from the Department's Budget request which called for the lay-up of the SAVANNAH, as reflected in the President's Budget, there were no written communications, correspondence, or memorandum between the Department and the Bureau of the Budget with respect to funding for fiscal 1968 for the SAVANNAH,
Mr. LENNON. That is all.
The CHAIRMAN. Mr. St. Onge.
Mr. ST. ONGE. Thank you, Mr. Chairman.
First of all, Admiral, I would like to compliment you on your
Admiral WILL. Thank you, sir.
Mr. ST. ONGE. It unfortunately sticks pretty much to the point that we are supposed to be discussing here, the deactivation of the Savannah, because I think there is a lot more to this problem than the immediate cost or possible cost of laying up this ship for a period of 1 year which is the only decision apparently that has been made in the executive branch.
Your style, sir, is a very pungent one and makes very interesting reading. I am sorry I wasn't here to get the benefit of personal delivery. I would like to go a little bit afield, Admiral, if you don't mind and ask you about the future of the Savannah assuming that it were to continue in operation.
This morning we heard some talk about jumboizing the Savannah and automating her, containerizing her and so forth, and the figure of $6 million was used. Would it cost $6 million in your estimation to jumborize the Savannah and make it a containerized ship?
Admiral WILL. Mr. St. Onge, I would not feel qualified to question those figures. I accepted those at face value because I didn't think they seemed out of line when you stop and think that they had in mind not only putting in a new midbody section but converting all of the cargo holds to reception of containers which would mean really gutting the ship and putting in guide rods and then changing all of the cargo-handling gear to handling of containers, converting all of the presently wasted spaces to cargo space, and, I believe they also proposed the installation of a heavy lift boom. I think on a ship that size $6 million is not too great a figure.
Mr. ST. ONGE. All right, sir. I accept that as a very satisfactory
Do you fel that we have had enough experience with the Savannah to justify considering at least jumboizing the ship to make it a purely commercial ship to get some practical experience for a year or two in commercial operations, say, to the Far East where the cargo operations, I understand, are more profitable, where you could carry possibly full cargoes on ordinary commercial runs?
Admiral WILL. I would like to say here that the statement made this morning about the possibility of keeping the ship operating for the next year until it had to be refueled, during which detailed and intensive construction planning could go on, and at that time the plans could be implemented to improve the ship's capability as a real cargocarrying ship talked right down our alley.
It was not long ago, and I can say this now because it has leaked out in the February issue of Nuclear Industry, the monthly maga
zine of the atomic forum, that we did submit to Maritime a formal proposal to jumboize the Savannah, to convert her into an efficient capable container ship with a new modernized, up-to-date reactor. There was to be no appreciable increase in speed. But we did propose to operate the ship until she has to be refueled because that is going to be quite an expensive operation in itself and we could profitably utilize the time in between right now and that time to come up with a plan that would produce a real efficient cargo ship.
This ship was never built to make money. She was never built to be operated at a profit. She was a show ship. She was demonstrating the peaceful use of the atom. But she could be made into an extremely valuable cargo carrying container ship.
Mr. ST. ONGE. This is a very good answer. Would I be asking you to divulge confidential information if I asked you what the cost of your proposal would be?
Admiral WILL. I am just trying to remember. With a brand new reactor which we hoped would be the most modern available of approximately the same size that is now in the Savannah, the total cost would run to $32,500,000. That would be broken down as follows: $12,200,000 for a new reactor, the cost of removing the present reactor and storing it of $5 million, hull modifications $1,500,000, revisions to accommodations outfit and removals $1,800,000, installing the new reactor plant $8 million, containerizing the ship $1 million, engineering $730,000, training $500,000, licensing $350,000 and startup and trials about $1 million, and spare parts $400,000 for a total of $32,500,000.
Mr. ST. ONGE. If that were done, could the Savannah be operated at less annual cost to the Federal Government than it is costing now? Admiral WILL. I believe it could, Mr. St. Onge, because there are so many costs right now that the Government is subjected to because of the excessive crew size, and the obsolete nature of the equipment onboard the ship. Much of the equipment that was installed was out of date at the time it was put into the ship. There are so many ways the ship could be made a modern ship with complete automation. I think that then it would have a real chance of demonstrating the practical economic value of nuclear power in a merchant ship.
Mr. ST. ONGE. Would it be your feeling that if this committee were to recommend an addition of $2 million to keep the Savannah operational for the next fiscal year with additional funds for the planning of these changes that you mentioned, that we would be on the right track if we are aiming at a nuclear-powered merchant marine in this country?
Admiral WILL. I believe definitely that it would produce that result; yes, sir.
Mr. ST. ONGE. Thank you very much.
The CHAIRMAN. Admiral, I believe you have made a very fine witness and given us a lot of information. I agree with you wholeheartedly as chairman of the committee that the Savannah should be continued in operation, and I think I can state that for the other 33 members of the committee, although I haven't polled them as yet. Admiral WILL. I, Mr. Chairman, want to tell you how much we all