The Nova Scotian government’s reluctance to provide information about a recently completed audit of the ferry service between the province and Portland indicates there are serious problems with the service, says a leader of Nova Scotia’s opposition party.
“To me, it appears they got a bad report, and they are trying to figure out how to respond to it,” said Chris d’Entremont, a veteran lawmaker who represents a district just north of Yarmouth, the Nova Scotia town that serves as the departure and destination point for the Nova Star ferry.
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Economic and Rural Development and Tourism Minister Michel Samson told reporters in Halifax on Wednesday that discussions with Nova Star Cruises are “ongoing” and the department has not engaged other potential operators.
He declined to discuss the audit completed by KPMG, the company hired to examine Nova Star Cruises’ business practices and audit its books to find ways to increase the operation’s efficiency and reduce costs.
The report is crucial to the future of the ferry service because it can’t operate without the financial assistance of Nova Scotia taxpayers. The ferry operator has yet to obtain a contract from the government for the 2015 season.
The Nova Scotia government agreed a year ago to advance $21 million (Canadian) in forgivable loans over seven years to Nova Star Cruises. But the company spent all that money during its inaugural season and received another $5 million to pay its bills.
Officials with Nova Star Cruises are adamant that the ferry will return this spring for a second season, but the evidence backing up that commitment has yet to emerge.
The operator has neither set a sailing schedule nor published ticket prices for 2015. A person who answered the Nova Star reservation line Wednesday said the company can’t make reservations at this time and suggested calling back in February. On Thursday, callers were told to leave a phone number and email address so they could be contacted when tickets were available.
People are making their vacation plans now, so the company is losing business by not selling tickets this winter, said Darrell Bryan, president of Clipper Vacations, which operates a ferry between Seattle and Victoria, British Columbia. Bryan is past president of Interferry, an international trade association of ferry operators, and former chief of the Passenger Vessel Association.
Last year, Nova Star Cruises wasn’t able to sell tickets until March because it was late obtaining required permits from the U.S. Maritime Commission. Those permits are still active, according to federal maritime officials. But last year’s delay was a critical factor in the ferry’s poor sales last year, according to Nova Star officials. The ferry operator ended its inaugural season with a total passenger count of 59,000, far short of the 100,000 it had expected, and in October ended its season three weeks early, offering refunds to 650 passengers.
The company is poised to repeat its mistakes from last season, Bryan said.
“Time passes pretty quickly,” he said. “How are they going to improve over last year?”
The company’s activity has dropped sharply since the season ended in October. Its Facebook page hasn’t been updated since Nov. 13. Negotiations with the city of Portland to amend its two-year lease for space at the Ocean Gateway terminal have yet to be scheduled. The company has not paid its $1,600-per-month lease for November, December or January. The ferry has not occupied the space during those months, but it is obligated to make the payments.
The company so far has failed to secure a winter route for the vessel, as it had intended, a move that would have provided cash during the offseason. Instead, the Nova Star remains tied up in Shelburne, Nova Scotia, with a skeleton crew on board. The engines are kept running to heat the vessel and protect its systems from the cold.
Officials in the Nova Scotia government are evaluating the first season and discussing plans for next season, said Sarah Levy MacLeod, a spokeswoman for the Economic and Rural Development and Tourism Department.
“Our goal remains the same – to establish a reliable ferry service between Yarmouth and Maine, based on realistic costs, the right business plan and the best interests of Nova Scotians,” she said.
d’Entremont, a leader in the right-of-center Progressive Conservative Party, says he sees the economic value of maintaining a ferry service that brings tens of thousand of American tourists to Nova Scotia, but he also worries about the tax burden of subsidizing the service.
While it makes sense to give the service another year to build a customer base, the government needs to find a way to protect taxpayers from the kind of financial hit they took last year, he said.
“I don’t know how far you have to let something like this go before you say, ‘We’ve got a turkey here,’ d’Entremont said.
Although the government has no obligation to negotiate with Nova Star cruises and could work out a deal with the ship’s owners, ST Marine of Singapore, to bring in another operator, Samson said Wednesday that there will be a ferry service with Nova Star this year or none at all, according to the Chronicle Herald newspaper in Halifax.
An attempt by former Scotia Prince managers to take over the ferry route with an older, less expensive vessel appears to have stalled because the Nova Scotia government may not want to work with Bruce McNeil, the leader of the effort, d’Entremont said. McNeil lacks credibility in the Yarmouth community, he said.
Maine has yet to provide any subsidy for Nova Star Cruises, whose president and CEO, Mark Amundsen, lives in Eliot. In 2013, when Gov. Paul LePage lobbied the Nova Scotia government to select Amundsen’s company to run the service, LePage said he would help the company secure a $5 million line of credit from a Maine bank. The bank loan has not materialized, and LePage in October said he will submit legislation that would provide a $5 million line of credit to the company. Doug Ray, spokesman for the Maine Department of Economic and Community Development, said the administration is still working on a proposal. “It’s premature to get into any details about what the fix might look like,” he said.
Nova Star spokesman Dennis Bailey expects the ferry schedule will be completed and tickets will go on sale in mid-January. Bailey said the company has been in discussions with the province and there will be an announcement soon. He said company officials will attend a series of trade shows in the coming months to promote the service.
“We are of the opinion that we are going to have a great season,” Bailey said.
While the public can’t buy tickets, charter bus companies are holding contracts that spell out prices and sailing dates.
Rene Dupuis of Tours of Distinction in Connecticut has nine tour groups scheduled for trips to Nova Scotia that use the ferry in one direction. He said he has been assured by Nova Star Cruises that the ferry will operate. Dupuis has already collected deposits from the groups. If the ferry service is canceled, he said, the route would have to be altered so much that more than half the groups would drop out.
“It would be a big hardship for me,” he said.
Atlantic Tours in Halifax has booked several charter bus tours on the ferry, and owner Richard Arnold is certain the service will operate this year. He said he’s assured because the Liberal Party gained power in 2013, in part because people were angry that the previous government in 2009 had canceled the subsidy for The Cat, a ferry between Yarmouth and Portland operated by Bay Ferries.
“I feel confident at this point,” he said. “We have no reason to change our plans.”
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