The state Department of Transportation plans to complete an environmental impact statement for Hawaii Superferry, laying an important plank in the legal groundwork if Superferry chooses to resume operations in the Islands.

Thomas Fargo, Superferry's president and chief executive officer, said yesterday that Superferry is looking for commercial and military charter options for the Alakai and a second catamaran after a state Supreme Court ruling on Monday led the company to cease operations.

The Alakai made its last scheduled round trip between O'ahu and Maui yesterday, where passengers and employees, including many who will be laid off today, expressed sadness and anger about the shutdown.

Fargo said Superferry would retain its company name and a minimum staff to maintain operations in Hawai'i. He left open the possibility the Alakai could again run between the Islands, but said the company has no option but to look elsewhere.

"The problem before us today is there appears to be no short-term solution to this ruling," Fargo said at an early morning news conference at Honolulu Harbor's Pier 19. "To conduct another EIS (environmental impact statement), even with the work done to date, and move it through the legal review that it would have to go through, might take a year or so. And other options don't provide the certainty that's necessary to sustain a business.

"As a result, we're going to have to go out and find other employment for Alakai, for now. Obviously, this is not even close to our preferred and desired outcome. We have believed from the very start, and continue to believe, that there's a clear and unmet need for an interisland high-speed ferry system for this state.

"My hope, our hope, is that the conditions will eventually be such that we can realize that vision here in Hawai'i."

Brennon Morioka, the director of the state Department of Transportation, said state contractor Belt Collins has completed most of the work on the $1.5 million environmental review ordered by the law the court struck down.

The department will essentially start the process over under the procedural framework of state's more stringent environmental review law, known as Chapter 343, but hopes to transfer the bulk of the work already performed into the new document.

Morioka said a completed environmental review could be used by Superferry or any other ferry company interested in the Islands.

"All of the information and all of the studies we have done to this point are all still valid," he said.

BACKLASH FEARED

Robert Harris, director of the Sierra Club Hawai'i chapter, one of three environmental groups that brought the legal challenge against Superferry, said his group would likely not object to the state salvaging some of the environmental work on Superferry.

Harris said a bigger concern, however, was whether some of the anger over Superferry will lead some to want to dismantle the state's environmental review law. He said it was the decisions by the state and Superferry, and not the environmental review process, that was the problem.

"The DOT and Superferry were told to do an EIS, and if they had done that, we would not have had this situation," he said.

Fargo, in his first public comments since the court ruling, described it as "a terrible decision" but said the company accepts that it is the law.

Under questioning from reporters in Honolulu and Maui, Fargo would not address whether Superferry would repay the state for $40 million in harbor improvements other than to say that the payments were based on fees generated by ferry service. Superferry has paid the state about $2.5 million in fees and taxes since it has been in operation.

Fargo would also not discuss the extent of the company's financial losses or the possibility Superferry might file a lawsuit against the state. He said Superferry proved, after a year in service, that it took adequate steps to protect the environment. He said the ferry was popular with locals and small businesses and was beginning to tap into the tourist market.

Fargo said the company was expecting delivery of a second $95 million ferry soon from shipbuilder Austal USA of Mobile, Ala., and met Wednesday with officials from Virtru Ferries about leasing the second vessel. Virtu operates high-speed ferries between Malta and Sicily in the Mediterranean.

The second ferry was to have started service to Kawaihae early this year, but the company announced in September that it would delay the start of Big Island operations by a year in response to slower demand and the economic recession.

Fargo, after mentioning that the military might want to lease the Alakai, addressed speculation by some activists who have opposed the project that Superferry was designed from the start as a military operation.

"That's absolutely not true," said Fargo, a former Navy admiral. "We certainly wouldn't have gone to the trouble to paint Alakai in the manner that we did, to appoint her with 836 first-class seats, to spend the huge sums of money that we did to establish service here in Hawai'i if that was our goal.

"The goal that's unmistakable was to provide regular and reliable commercial ferry service in these Islands."

Early Superferry executives — and main investor John F. Lehman, a former Navy secretary — had praised the ferry's military utility in initial discussions with the state, including the possibility the ferry could be used to transport the Army's Stryker brigade between O'ahu and the Big Island. The second vessel was outfitted with a vehicle ramp that could make it more useful to the military.

REVISITING THE RULING

Gov. Linda Lingle and state House and Senate leaders have said they would ask the state Supreme Court to reconsider aspects of its ruling. The court found that the Superferry was special legislation written for a single company. The governor and lawmakers are concerned, among other things, that the ruling will unduly restrict the Legislature's power.

Fargo spoke to reporters in Honolulu in the morning and then flew to Maui to join company vice chairman John Garibaldi and others for the final voyage.

With three blasts from its horn, the Alakai pulled away from Pier 2C at Kahului Harbor just after 11 a.m. for the return leg home.

As the 350-foot, high-speed vessel maneuvered toward the harbor entrance, passengers and employees crowded the outer decks and waved aloha while a tugboat sprayed water into the air in a traditional maritime tribute.

The Alakai sailed from Ho- nolulu to Maui with 290 passengers and 84 vehicles aboard, including many employees. The return trip carried 398 passengers and 126 vehicles. The vessel is capable of carrying 836 people and 230 autos.

Tracy Knight of Makiki and her family had to cut short a weeklong Maui vacation to catch the ferry back to Honolulu with their two cars. They had arrived Sunday on the Alakai.

"We loved it. We were really bummed. It's very sad. I hope they don't leave for good," said Knight, 34, who works for a liquor distributor. "They were very conscious of the whales on the way over, and everyone really enjoyed it."

Father-and-son classic car owners Butch Meyer, 65, of 'Ewa Beach, and Duane Meyer, 38, of Ha'iku, Maui, were taking their prized vehicles to Honolulu on the ferry. The elder Meyer's 1932 Ford sedan was refurbished on Maui, although the work was not quite finished before he had to catch the last ferry.

"I hate that it shut down. I love the ferry. It's one of the best things for us," he said, referring to car enthusiasts.

Duane Meyer, who owns a towing company, said he used the ferry on a regular basis to transport his souped-up 1965 Ford Mustang to car shows. He said he would have to ship the Mustang back to Maui on a Young Brothers barge at four times the cost of using Superferry.

"This is stupid. They should let the people decide and not some stupid judges," he said.

Holding tears back while directing cars into the vehicle check-in area at Kahului Harbor, port utility operator Corrine Dutro-Ponce planned to join co-workers on the Alakai for the final sailing. "It's like a death," she said.

Dutro-Ponce joined the Superferry in its early days in July 2007 and lived through the ups and downs of a legal battle that ended with Monday's ruling.

"It was hard, but we stuck it out and we always had hope we would survive, and we still have hope that it will start again," she said.

Dutro-Ponce was uncertain about her job prospects. "I'll have to fight for a job like everyone else," she said.