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HomeNewsArchivesSenate Committee Approves Long-term Ferry-Service Agreement

Senate Committee Approves Long-term Ferry-Service Agreement

April 2, 2007 — In an effort to fill the void left by Island Lynx, senators on Monday unanimously passed a bill that would grant one local company an exclusive 15-year franchise agreement to provide ferry services between St. Thomas and St. Croix.
The agreement between the government and V.I. SeaTrans has been in the works for about a year, and is designed to put some much-needed government support behind the company's operations, according to Senate President Usie R. Richards.
"No franchise entity will continue to provide service without government intervention," he explained during Monday's Government Operations and Consumer Protection Committee meeting. "And we want to ensure that service continues."
While some senators seemed skeptical about granting an exclusive contract, V.I. SeaTrans principal Marjorie Smith said that it would not be economically feasible for the company to run alongside another operator. Currently, runs between the two islands pull in 30 to 40 passengers on a daily basis — barely enough to break even, she said.
Therefore, the company's major source of revenue comes from large groups traveling back and forth between school or other local events, such as Carnival or the Agricultural Fair. "It's not viable for us to have another vessel running, because there's not enough (passengers) to share," Smith said.
To support her point, Smith gave a brief outline of the company's expenses, which range from the building of a new boat to the daily cost of fuel, which totals around $3,000.
Building a boat equipped to handle the territory's waters is a necessity that would cost upwards of $10 million, she added. However, Smith said the bill is designed as a private-public partnership, which would allow the company better access to federal funds once a franchise route is granted.
The funds would be channeled through the Department of Public Works, which was unable to send a representative to Monday's meeting.
"Currently we are operating at a loss," Smith said. "But the franchise agreement would put us in a better position to qualify for certain benefits."
In light of the fact that subsidies would be funneled through Public Works, Smith suggested that senators discuss whether or not the company's operations should be regulated by the Public Services Commission (PSC). As currently written, the bill designates V.I. SeaTrans as a public utility, and therefore subject to the mandates of the PSC.
Testifying during Monday's meeting, PSC chairwoman Alecia Wells told senators that the commission currently has "no position" on the agreement, but suggests that other local ferry operators be given the opportunity to speak on or participate in the franchise route.
"The opportunity for an exclusive franchise is a powerful one, which can render significant benefits to an individual company," Wells said. "However, the interest in having affordable and reliable service may be gleaned by open competition through non-exclusive franchises — or, as we currently have between St. Thomas and St. John — exclusive agreements that include more than one franchisee."
Wells' statements sparked concerns for Sen. Carlton "Ital" Dowe, who asked testifiers whether the franchise agreement should be put out to bid.
"Not necessarily," responded Darlan Brin, executive director of the V.I. Port Authority, who told senators that there may not be enough interest from other companies in operating ferry services between the two islands.
"I mean, there's not a lot of other guys out there waiting in the wings," he said.
While Brin added that he supported the intent of the bill, he commented that certain provisions are ambiguous and need to be clarified before the final draft comes before the full Senate body. These ambiguities could also affect what position VIPA's governing board — which has not yet considered the bill — will take on the agreement, he said.
Specifically, Brin said, the bill needs to state where, on each island, the ferry will dock.
Present during Monday's meeting were Sens. Liston Davis, Dowe, Juan Figueroa-Serville, Shawn-Michael Malone, Terrence "Positive" Nelson and Basil Ottley Jr.
Sen. Alvin L. Williams was absent.
Non-committee members Richards and Sen. Louis P. Hill were also present.
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April 2, 2007 -- In an effort to fill the void left by Island Lynx, senators on Monday unanimously passed a bill that would grant one local company an exclusive 15-year franchise agreement to provide ferry services between St. Thomas and St. Croix.
The agreement between the government and V.I. SeaTrans has been in the works for about a year, and is designed to put some much-needed government support behind the company's operations, according to Senate President Usie R. Richards.
"No franchise entity will continue to provide service without government intervention," he explained during Monday's Government Operations and Consumer Protection Committee meeting. "And we want to ensure that service continues."
While some senators seemed skeptical about granting an exclusive contract, V.I. SeaTrans principal Marjorie Smith said that it would not be economically feasible for the company to run alongside another operator. Currently, runs between the two islands pull in 30 to 40 passengers on a daily basis -- barely enough to break even, she said.
Therefore, the company's major source of revenue comes from large groups traveling back and forth between school or other local events, such as Carnival or the Agricultural Fair. "It's not viable for us to have another vessel running, because there's not enough (passengers) to share," Smith said.
To support her point, Smith gave a brief outline of the company's expenses, which range from the building of a new boat to the daily cost of fuel, which totals around $3,000.
Building a boat equipped to handle the territory's waters is a necessity that would cost upwards of $10 million, she added. However, Smith said the bill is designed as a private-public partnership, which would allow the company better access to federal funds once a franchise route is granted.
The funds would be channeled through the Department of Public Works, which was unable to send a representative to Monday's meeting.
"Currently we are operating at a loss," Smith said. "But the franchise agreement would put us in a better position to qualify for certain benefits."
In light of the fact that subsidies would be funneled through Public Works, Smith suggested that senators discuss whether or not the company's operations should be regulated by the Public Services Commission (PSC). As currently written, the bill designates V.I. SeaTrans as a public utility, and therefore subject to the mandates of the PSC.
Testifying during Monday's meeting, PSC chairwoman Alecia Wells told senators that the commission currently has "no position" on the agreement, but suggests that other local ferry operators be given the opportunity to speak on or participate in the franchise route.
"The opportunity for an exclusive franchise is a powerful one, which can render significant benefits to an individual company," Wells said. "However, the interest in having affordable and reliable service may be gleaned by open competition through non-exclusive franchises -- or, as we currently have between St. Thomas and St. John -- exclusive agreements that include more than one franchisee."
Wells' statements sparked concerns for Sen. Carlton "Ital" Dowe, who asked testifiers whether the franchise agreement should be put out to bid.
"Not necessarily," responded Darlan Brin, executive director of the V.I. Port Authority, who told senators that there may not be enough interest from other companies in operating ferry services between the two islands.
"I mean, there's not a lot of other guys out there waiting in the wings," he said.
While Brin added that he supported the intent of the bill, he commented that certain provisions are ambiguous and need to be clarified before the final draft comes before the full Senate body. These ambiguities could also affect what position VIPA's governing board -- which has not yet considered the bill -- will take on the agreement, he said.
Specifically, Brin said, the bill needs to state where, on each island, the ferry will dock.
Present during Monday's meeting were Sens. Liston Davis, Dowe, Juan Figueroa-Serville, Shawn-Michael Malone, Terrence "Positive" Nelson and Basil Ottley Jr.
Sen. Alvin L. Williams was absent.
Non-committee members Richards and Sen. Louis P. Hill were also present.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.