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 Rear Adm. Rick Breckenridge, director of undersea warfare, said repairing the Groton, Conn.-based sub would have meant canceling work on dozens of other ships because of new budget constraints.
He said that would've hurt the Navy's overall readiness.
"The Navy and the nation simply cannot afford to weaken other fleet readiness in the way that would be required to afford repairs to Miami," Breckenridge said in a statement.
Inspections revealed a significant number of components in the torpedo room and auxiliary machinery room would require replacement, further driving up the repair costs for the USS Miami. The Navy originally said it planned to repair the submarine but the discovery of additional damage raised the cost, originally estimated to be about $450 million.
A shipyard worker, Casey James Fury, of Portsmouth, N.H., was sentenced to 17 years in prison after admitting he set fire to the Miami, which was in dry dock during a 20-month overhaul at the Kittery shipyard.
It took 12 hours and the efforts of more than 100 firefighters to save the Los Angeles-class attack submarine. Seven people were hurt.
The fire, set on May 23, 2012, damaged forward compartments including living quarters, a command and control center and the torpedo room. Weapons had been removed for the repair, and the fire never reached the rear of the submarine, where the nuclear propulsion components are located.
U.S. Sens. Susan Collins and Angus King of Maine and Jeanne Shaheen and Kelly Ayotte of New Hampshire issued a statement blaming the decision to scrap the submarine on the automatic budget cuts known as sequestration.
"We are disappointed by the Navy's decision to discontinue repairs to the USS Miami. Inactivating the Miami will mean a loss to our nuclear submarine fleet -- yet another unfortunate consequence of the across-the-board cuts known as sequestration. We will continue to work together to find a responsible budget solution that replaces sequestration," they said.
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 The Navy announced last summer that it intended to repair the Miami with a goal of returning it to service in 2015. The Navy said it would be cost-effective because the 23-year-old submarine could serve another 10 years.
The decision to inactivate the Miami was a difficult one, "taken after hard analysis and not made lightly," Breckenridge said in his statement. "But in exchange for avoiding the cost of repairs, we will open up funds to support other vital maintenance efforts, improving the wholeness and readiness of the fleet."
The repairs have potential implications for both Portsmouth Naval Shipyard workers and workers from Electric Boat in Groton, who expected to play a major role in the repair effort.
U.S. Rep. Chellie Pingree, whose Maine district includes the shipyard, blamed the submarine's loss on Congress' inability to come up with a budget.
"It's outrageous that the yard won't get the chance to put the Miami back in service because of sequestration," she said.
[Associated
Press; By DAVID SHARP]
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