October 06, 2016 - 1:31 PM
HALIFAX - The new operator of Nova Scotia's taxpayer-funded ferry from Yarmouth, N.S., to Portland, Maine, says more than 35,000 passengers used the service in its inaugural season — a figure well short of the provincial government's projected target of 60,000.
Despite dumping the previous operator, partly for failing to meet projected passenger numbers, provincial Transportation Minister Geoff MacLellan said Thursday he believes current operator Bay Ferries has brought stability to the volatile service.
"We needed the stability on the operational side," he said. "Clearly we didn't have that with Nova Star and clearly we have that with Bay Ferries."
The just-concluded season ran from June 15 to Oct. 1 and the 35,551 passengers carried by Bay Ferries' high-speed CAT ferry was about 15,000 fewer than previous operator Nova Star Cruises carried in 2015. The 51,038 passengers carried by Nova Star was short of its goal of 80,000.
MacLellan said while there's lots of work to do to build ridership, he's confident the province is backing the right operator, given Bay Ferries' limited opportunity to promote itself in the key New England market.
"We are moving things in the right direction. The financial realities of the 2016 season and the fact Bay Ferries came in on budget, I think is a good sign."
The government ended its contract with Nova Star last fall after the company soaked up $39.5 million in provincial subsidies during two years of running the service.
Bay Ferries, which is to get a subsidy of at least $32.7 million over the first two years of a 10-year deal, said Thursday that it "anticipates" it will meet its financial projections for the current fiscal year, which ends March 31, and that "no additional contribution should be required."
Under its deal with the province, the ferry is to get $23.3 million in the first year. That figure included $9 million for a vessel refit and $4.1 million for startup costs and for terminal upgrades in Yarmouth.
Any losses incurred were also to be covered by taxpayers under the contract.
In an interview, Bay Ferries CEO Mark MacDonald said it was "unlikely" the service would need additional financing this year, but he cautioned an unforeseen circumstance could change things.
"When you are dealing with ships it can always happen, even if they are tied to a dock," he said. "Based on what we know right now we project we'll end the season in line with the projections which we gave."
MacDonald pointed out that the ongoing subsidy is expected to be around $10 million a year, although provincial officials said when the deal was inked in March that the figure was based on a financial model projecting 60,000 passengers a year.
In relation to the passenger numbers he said the company made no projections and wasn't surprised by the final tally given it was operating on a shorter season this year.
"We were coming into an entirely new situation with a new product in a circumstance where the previous operator had just gone bankrupt and the market was disrupted," said MacDonald. "Our approach was to try to build something that could grow in the future and that's what we did."
He said the CAT would spend the winter months tied up in Charleston, South Carolina and was expected to leave for the port early next week.
News from © The Canadian Press, 2016