WAILUKU, Maui — The Alakai remains confined to port today with the fate of Hawaii Superferry's Honolulu-to-Maui service still unresolved.

A hearing on whether the 350-foot catamaran should be allowed to resume service while the state conducts an environmental assessment of ferry-related harbor projects will reconvene Monday following weeklong testimony in Maui Circuit Court.

Judge Joseph Cardoza yesterday agreed to extend the ban on Hawaii Superferry's use of Kahului Harbor, via a preliminary injunction, at least until he reaches a decision. Cardoza had issued a temporary restraining order to that effect on Aug. 27, but such orders cannot be extended beyond 20 days.

Although a similar case is pending in Kaua'i Circuit Court, the vessel is being allowed to resume service to Nawiliwili Harbor on Sept. 26.

The Maui hearing was convened in the wake of an Aug. 23 Hawai'i Supreme Court ruling that ordered the state Department of Transportation to conduct the environmental assessment.

Arguing in favor of keeping the ferry from using Kahului Harbor until the review is done are Maui Tomorrow, the Sierra Club and the Kahului Harbor Coalition; on the other side is DOT and Hawaii Superferry.

So far, Cardoza has heard testimony from a marine biologist on the potential for humpback whale collisions; invasive species experts; an educator, canoe paddler, diver and surfer who frequents Kahului Harbor; and Native Hawaiians concerned that visitors from other islands will bring their vehicles to Maui and deplete subsistence resources such as fish, limu and 'opihi.

Yesterday, the judge heard from an official with the federal Maritime Administration, which granted a $140 million loan guarantee to Hawaii Superferry for construction of its two vessels: the Alakai and one now being built at a shipyard in Mobile, Ala.

Jean McKeever, associate administrator for business and workforce development for the agency in Washington, D.C., said it is in the public interest for the ferry to resume operations because it is a prototype for a mode of transportation that can relieve roadway and airport congestion.

Another reason is "there is $140 million in taxpayer money at stake here," she said.

MarAd, as the agency is called, would have "serious concerns" if the ferry were not allowed to operate while an environmental assessment is done, McKeever said.

"Our concern is that the company does not have any other assets to generate revenue. It's a startup company," she said. "It needs the Alakai to operate and generate revenue to service the debt."

If the company defaults on its debt, taxpayers would be left holding the bag, she said.

As a condition of the loan guarantee program, the company enrolled in MarAd's Voluntary Intermodal Sealift Agreement program. That means it could be called into service on the nation's behalf in case of an emergency such as war or natural disaster.

McKeever, who was called as a witness by Hawaii Superferry, said another reason to keep the ferry running "instead of tied up at pier" is to ensure the company maintains a skilled crew that can immediately respond to emergencies if needed.

In his cross-examination of the MarAd official, attorney Isaac Hall attempted to point out the loan guarantee would not be in immediate danger if the ferry remains out of service while an assessment is conducted. Hall is representing Maui Tomorrow, the Sierra Club and the Kahului Harbor Coalition.

McKeever said the company is to make semiannual payments on its debt. The next loan payment of $3 million for the Alakai is not due until November, with another payment due six months later. The company also has a payment due in October for the ship under construction.

McKeever said a $6.5 million escrow account would cover any missed payments, adding the escrow account is meant as a short-term, stop-gap measure that could quickly be depleted.

She also agreed the company was required to maintain net worth of $58 million between the time of the loan guarantee closing and delivery of the second ferry. But she also noted that net worth is not always liquid, meaning cash.

Under questioning by Hall, she said the Alakai had "not yet" been listed in the Voluntary Intermodal Sealift Agreement program's vessel inventory, but would be once rate negotiations with the military are complete. McKeever also said no ships in the program had been called to duty for at least 10 years — an attempt by Hall to show that national defense interests would not be impacted if the ferry isn't operating.

Because McKeever traveled from the nation's capital for the hearing, Cardoza agreed to take her testimony and put off arguments over whether to accept her statements. Hall said he intends to argue the judge cannot consider economic or nonenvironmental harms when weighing a decision on the injunction to keep the ferry in port while an assessment is performed.

The hearing will reconvene at 9 a.m. Monday.

Meanwhile, the hearing on a motion to dismiss the Kaua'i case against the Hawaii Superferry was rescheduled from Monday to Friday in Kaua'i Circuit Court.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.