Nova Scotia official seeks meeting with LePage over $5 million line of credit for Nova Star Cruises ferry service

The Nova Star cruise ship travels daily between Maine and Nova Scotia.
Troy R. Bennett | BDN
The Nova Star cruise ship travels daily between Maine and Nova Scotia. Buy Photo
Posted Aug. 22, 2014, at 5 p.m.
Last modified Aug. 22, 2014, at 5:55 p.m.

PORTLAND, Maine — Nova Scotia’s economic development minister told a Canadian newspaper he hopes to meet with Gov. Paul LePage to discuss how Maine can help secure a $5 million line of credit for the Nova Star Cruises ferry service that started earlier this year.

The Chronicle Herald reported Michel Samson, the province’s top economic development official, said Thursday a meeting date has not been confirmed but said he will seek to forge a greater partnership with Maine for the ferry service that has been heavily subsidized by the province of Nova Scotia.

The deal between the province and operator STM Quest — a joint venture between Eliot-based Quest Navigation and shipbuilder ST Marine Ltd. in Singapore — called for the province to deliver about $11.5 million in the first year with $1.5 million for marketing over seven years.

The company already has received the full $21 million subsidy package and continues to seek a $5 million line of operating credit.

Last year, LePage wrote in a letter to Nova Scotia’s previous Premier Darrell Dexter the state would “assist” operators of the Nova Star in getting that line of credit.

It is unclear what that arrangement might be. Spokespeople for the governor and the Finance Authority of Maine were not available for comment Friday afternoon, but FAME spokesman Bill Norbert said in June his agency was in preliminary talks with Nova Star Cruises for a deal that could involve the agency guaranteeing some portion of a bank loan or providing a direct loan.

“Bottom line is we want to be helpful but can’t provide all the money, so are hoping to partner with others,” Norbert said at the time, noting the deal could involve one or more banks.

Norbert said FAME and the Department of Economic and Community Development were involved in the talks aimed to produce an agreement by the end of this summer.

The Herald reported Samson declined to cite the reason why he was pursuing a meeting with LePage about negotiations over assistance from Maine for the service.

The service has been a source of political frustration for the provincial government. Earlier this month, Samson said in a familiar refrain to the Canadian Broadcasting Corp. that the terms of the province’s subsidy agreement were inked just before the exit of the previous government of Premier Darrell Dexter.

The Nova Star succeeds the previous Nova Scotia-to-Portland ferry service called the The Cat. That high-speed ferry service ended in 2009, when it was losing around $7 million a year.

Operators of the Nova Star said when the service launched that it would succeed where The Cat failed. Nova Star has cabin space for travelers to stay in overnight, for a trip more like a cruise than a ferry ride. It’s more similar in that aspect to the slower Scotia Prince service that ran the Portland-Yarmouth, Nova Scotia route from 1982 to 2004, offering entertainment on board and about 250 overnight cabins.

Unlike those previous ferries, the Nova Star does not stop in Bar Harbor but travels directly between Portland and Nova Scotia.

Ticket sales on the Nova Star were slow at the outset of its first year of operation this spring but picked up in July and August. July passenger counts were up 90 percent from June, to 13,043. That’s an average of 421 passengers aboard the ship, which has a capacity of about 1,200.

The service said preliminary August figures already beat July by the middle of the month, with 17,255 tickets sold, for an average of 557 passengers per day, within a goal of having between 500 and 700 average daily passengers during its peak season.

Regular adult fares during the summer are $139 per person; children younger than 18 travel for free. Through the summer, the service introduced a variety of travel packages for families and groups of adults.

Dennis Bailey, a spokesman for Nova Star Cruises, said in June the company sought a line of credit because federal regulations prevent it from using any of the money from booked fares and cabins until those trips are completed.

The province gave the service the final $2.1 million of its $21 million subsidy commitment in July to keep the Nova Star in operation.

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