Defense bill re-ups MSP

Defense bill re-ups MSP

WASHINGTON - The Maritime Security Program got a 10-year extension, and added more than a dozen ships to its fleet, as part of the new defense spending bill signed in to law this week by President Bush.

Bush signed the fiscal 2004 Defense Authorization bill Monday, reauthorizing the MSP and increasing the number of participating ships in the Maritime Security Fleet from 47 to 60.

The act -- which was not set to expire until October 2005 -- provides payments to commercial ship operators to help offset the higher cost of operating under the U.S. flag.

Payments to ship operators participating in the security fleet will increase from $2.1 million a year to $2.6 million a year for the first three years of the program, then increase to $2.9 million a year beginning in fiscal 2009. For the remaining four years of the program, operators will be paid $3.1 million a year.

Preference will be given to new U.S. tankers and vessels owned and operated by U.S. citizens. To be considered, LASH vessels must be less than 25 years old and other vessels less than 15 years old.

The law also includes financial assistance and incentives to build five new tankers and establishes a 30-month period to replace older ships with new vessels approved by the Department of Defense.

In addition, the law authorizes $158.8 million for the Maritime Administration, including $36 million for vessel construction loan guarantees and $18.4 million to dispose of obsolete ships in the National Defense Reserve Fleet.