Portland-Nova Scotia ferry service draws early on provincial loan to stay afloat

 Staffers from U.S. Rep. Chellie Pingree's office get a sneak-peek tour of the Nova Star cruise ship in Portland in this May 2014 file photo.
Staffers from U.S. Rep. Chellie Pingree's office get a sneak-peek tour of the Nova Star cruise ship in Portland in this May 2014 file photo. Buy Photo
Posted July 25, 2014, at 12:23 p.m.

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The Nova Star cruise ferry is escorted into port in Boston, Massachusetts, for a christening ceremony in this May 2014 file photo.
BRIAN SNYDER | REUTERS
The Nova Star cruise ferry is escorted into port in Boston, Massachusetts, for a christening ceremony in this May 2014 file photo.

PORTLAND, Maine — Nova Scotia provincial officials on Thursday advanced the Nova Star ferry service the last $2.1 million of a $21 million government loan that was originally planned to be distributed over seven years.

The head of the new Portland-to-Nova Scotia ferry service acknowledged on Thursday night that ticket sales were slow to pick up momentum, among other early challenges. But he said the ferry is receiving strong customer feedback and publicity, and ridership is rebounding.

“There have been several significant challenges, so we know it will take more than the first year to rebuild,” said Mark Amundsen, president and CEO of Nova Star Cruises, in a statement. “We have required the committed funds from the province to get the service established, and we continue to be in ongoing conversations with officials from the province.”

Under the deal reached with the Nova Scotia government to restore ferry service, $12 million of the total $21 million in loan money was always earmarked to help offset startup costs, with the remainder of the funding to be doled out over the following six years.

Repayment of the loan will ultimately be forgiven if the company meets certain conditions specified by the province and if it continues to operate the ferry.

In addition to the startup funding, Nova Star officials said they needed another $5 million early because the service still hasn’t secured $5 million in private investment or credit the Maine state government has pledged to help line up — a search for funding both the ferry company and state officials have suggested they remain optimistic about.

The slow early ticket sales — combined with greater-than-expected costs associated with bringing the Nova Star to North America from the Singapore shipyard that built it for $165 million — forced the service to seek the financial cushion of the remaining provincial loan funds.

As a result of Nova Star’s accessing all the loan funds early, the status of the ferry service has become a point of partisan debate in Nova Scotia.

The province’s top economic development official, a member of the Nova Scotia Liberal party, said Thursday that New Democratic Party officials who were in power last summer when the deal with Nova Star was drafted “knew it was unrealistic when they announced it.”

“In no way was it an economic deal that was reflective of the realities of ferry services throughout North America,” Michel Samson, Nova Scotia’s economic and rural development minister, told Canadian reporters after a Thursday cabinet meeting. “We have not been able to find one ferry service which is not subsidized by taxpayers.”

New Democratic Party members countered that the final pact with Nova Star was signed after the Nova Scotia Liberal party came into power, and that the Nova Scotia Liberal party was happy to attend all the ribbon cuttings leading into the service’s launch in May.

The Nova Star is a 528-foot cruise ship that has capacity for 1,250 passengers and 300 vehicles. It features a casino, three restaurants, a theater, spa and art gallery. The ship departs at 8 p.m. daily from Portland and arrives in Yarmouth, Nova Scotia, at 7 a.m. the following day.

Return trips leave Yarmouth at 9 a.m. each day and reach Portland at 5 p.m.

The May restoration of ferry service came after more than four years without the seabound connection between Portland and Nova Scotia. The 2009 demise of the high-speed CAT ferry ended more than 50 years of Maine-Nova Scotia ferry service, starting with a Bar Harbor connection and going on to include about 35 years of routes to Portland as well.

“Our goal was to reintroduce this service after many years and get re-established after a four-year hiatus of a ferry between Portland and Yarmouth,” Amundsen said. “The startup of getting the service online has been significant, and we are working to build the service and the ridership. While the start was slower, we have received exceptional visitor feedback on the Nova Star voyage experience, and as soon as summer arrived, the ticket bookings have significantly increased.”

After a promising inaugural trip on May 15, for which tickets sold rapidly, ridership for the new service in May and June were sluggish. The Nova Star launched two weeks later than it had originally planned, and then canceled trips over the typically vacation-friendly July 4 weekend because of a storm that rolled through the area at the time.

Portland city spokeswoman Jessica Grondin on Friday confirmed that the Nova Star had 2,924 riders in combined arrivals and departures in the month of May, and 6,740 such riders in June. This works out to averages of 101 riders per trip in May and 112 per trip in June, less than 10 percent of the vessel’s capacity.

Dennis Bailey, spokesman for Nova Star Cruises, told the Bangor Daily News on Friday that ticket sales have begun to ramp up in July. He said the service had 500 passengers per trip last weekend and sold out all of its cabins. While he said he did not have official figures for the month of July yet, he said the ferry’s goal is to have between 500-700 riders per trip, numbers the Nova Star is hitting on weekends regularly and “getting close to … on weekdays now.”

It’s not uncommon for excursion travel services to run in large part on government subsidies. Amtrak’s Downeaster passenger train service connecting Brunswick to Boston by way of Portland receives state and federal funding to cover nearly half of its approximately $15 million in annual operating expenses.

Bailey said that the Nova Star remains committed to eventually being self-sufficient.

Despite the rocky start, Nova Scotia Premier Stephen McNeil told the Chronicle Herald newspaper he still is committed to the ferry service and suggested he’s open to providing additional provincial subsidies, although “there’s not a blank check.”

McNeil said he expects ridership to increase sharply during its second year, as, unlike in its first year, the service will be established when tours and bus groups are scheduling their summers, a process which takes place during the late fall and early winter.

“It’s Nova Scotia’s international link,” McNeil told the Nova Scotia-based newspaper. “We want to connect that link, but we’re also going to do it in a cost-effective way. It’s never entered in my mind, quite frankly, that we would not have that connection.”

 

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