Acting on concerns the Nova Star ferry will never be able to run without a costly taxpayer subsidy, officials in Nova Scotia are asking ferry operators around the globe if they have ideas for providing a less expensive service between Yarmouth, Nova Scotia, and Maine.
“We are going to engage with everyone we can who has the experience and investment level required to keep the service going,” Geoff MacLellan, the Nova Scotia minister overseeing the service, said in an interview Friday.
The province also is open to switching the Maine destination from Portland to Bar Harbor if it makes financial sense, MacLellan said. He plans to seek input on that issue from Gov. Paul LePage and Mayor Michael Brennan during a visit to Portland in June to determine how committed Maine is to supporting the ferry. The meetings have yet to be scheduled.
Nova Scotians are upset that Maine has not helped subsidize the service, although the state recently allocated $640,000 to the city of Portland to make improvements at the Ocean Gateway Terminal for the ferry.
The Nova Star’s inaugural season last year cost the province’s taxpayers a lot more than expected. The government originally committed to spend $21 million (Canadian) over seven years to re-establish the service, which had been suspended in 2009. But the ferry operator, Nova Star Cruises, spent that amount in the first few months and received another $7.5 million from the government so it could pay its bills for the remainder of the year.
This year, Nova Star Cruises already has spent $6.1 million of the $13 million that the government approved for the ferry. But the large upfront costs at the beginning of the season are expected because U.S. law doesn’t allow ferry operators to access passenger fares until after their trips are completed.
Its inaugural season was hampered by delays in permitting and marketing, which stifled early charter bus reservations and passenger counts. The service had hoped to ferry 100,000 passengers in its first year, but served only 59,000.
Early signs point to the Nova Star having a more successful year in 2015 because the company says bookings are up from last year and more charter bus companies have committed using the ferry this summer.
“Indications are that the market is picking up, and the business model is starting to succeed,” MacLellan said.
The service is scheduled to begin on June 1. Within four to six weeks after that, the government will look at the advance bookings and determine if the business is sustainable, he said.
In the meantime, it’s covering its bets. The government is launching an informal process to get input from ferry operators about the kind of service that would be successful between the province and Maine. Maybe the service needs a different sailing schedule or a different kind of ship, MacLellan said.
The informal process, which has no deadline, allows the government to draw on industry expertise to create a better operation, rather than having the government define a particular operation in a formal request for proposals. Though MacLellan acknowledged that if the Nova Star fails to perform this summer there may be not enough time to line up a new ferry operator for 2016, he said the government would have the option of inviting the Nova Star back for 2016 while looking for a different operator for 2017. Nova Star Cruises spokesman Dennis Bailey said the company doesn’t have much to say on the issue.
“We are looking at 2015,” he said. “We are confident we are going to hit our marks and look forward to 2016.”
MacLellan, who this winter assumed responsibility for overseeing the ferry service, didn’t ride the Nova Star last year, but plans to use the ferry when he travels to Portland in early June.
He hopes at that time to deal with the issue of Maine’s contribution to the service. Nova Scotians are upset that Maine hasn’t provided any money to subsidize operations, despite a pledge from LePage in 2013 that he would help Nova Star Cruises secure a $5 million line of credit from a Maine bank. The loan never materialized. During his re-election campaign last year, LePage said he would submit legislation to help secure the loan, but he has yet to do so.
MacLellan said officials from Nova Star Cruises have told the province that plans are underway in Maine to establish a line of credit for the company.
“That has never been verified,” MacLellan said. “We want to discuss it directly with Maine to assure that is the case.”
LePage spokeswoman Adrienne Bennett did not respond to email or phone messages.
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