Ferry Loss Expected
By JULIA WELLS
The surprise decision by the Steamship Authority governors last month to buy the New Bedford passenger ferry Schamonchi was pitched as a sound business decision for the public boat line, but an internal financial analysis done by the SSA shows that in fact the ferry is expected to lose large amounts of money.
The boat line board of governors voted last month to buy the Schamonchi for $1.75 million.
The financial analysis that accompanied the decision projects that the ferry will lose between $600,000 and $900,000 when the SSA takes over the passenger operation between New Bedford and the Vineyard this summer.
The analysis was prepared by boat line treasurer Wayne Lamson. Among other things, Mr. Lamson recommended that the SSA reduce the Schamonchi operating schedule from 145 to 104 days "in order to minimize our potential operating loss."
Even with the reduction in operating days, Mr. Lamson estimated that the Schamonchi will lose nearly $650,000. If the ferry operates for the 145-day schedule, it could lose between $800,000 and $940,000, Mr. Lamson found.
The detailed financial analysis includes projected revenues from passenger fares the New Bedford-Vineyard run, and projected expenses associated with manning and operating the 130-foot boat. Total projected operating costs range from $1.4 to $1.8 million, while total projected revenues range from $810,000 to $900,000.
The analysis is based on three round trips a day, from Memorial Day through Labor Day.
The Schamonchi can carry 640 passengers, but has never operated at capacity. Last year the ferry carried about 100,000 passengers.
Mr. Lamson was away and unavailable for comment this week.
But Vineyard boat line governor J.B. Riggs Parker defended the decision to buy the Schamonchi, despite the gloomy financial analysis.
"The Schamonchi was bought on the assumption that in its present configuration, there would be an initial period where it would not be a profitable run," Mr. Parker said. He added: "But it was bought as part of a long-term plan to make the run profitable and shift ridership to New Bedford for the Vineyard, and we assume that long-term plan to shift ridership would require a conversion to high-speed service."
The Schamonchi purchase did not include any hard analysis of high-speed ferry service between New Bedford and the Vineyard.
Mr. Parker said the boat line is now developing cost and revenue projections for high-speed ferry service to both Islands.
The sudden announcement about the Schamonchi last month was followed immediately by the unveiling of a new service model for the boat line. The new service model includes a shift in emphasis toward high-speed passenger service and limiting casual and short-term automobile traffic to the Islands.
Political leaders on the mainland, including city officials in New Bedford and community activists in Woods Hole, praised the new service model amid pronouncements about the boat line's new commitment to run high-speed ferry service out of New Bedford.
But Mr. Parker said this week there is no commitment - yet.
"The business concept is based on some very rough assumptions on how it might work out - but they are very rough and that business concept has not been approved by the board," he said. He continued:
"The Schamonchi became available to us at a time when we had not even launched our business concept publicly. The business concept certainly contemplates high-speed service to New Bedford, and all I can say is that concept hasn't been approved because we haven't got the numbers."
The new business concept includes an aggressive marketing campaign to shift passenger traffic from Woods Hole to New Bedford.
"We intend to make a very aggressive effort to move ridership onto the Schamonchi using the present system. As these other matters come into focus, high-speed service will be considered," Mr. Parker said.
"But the reason we proceeded with the concept first was to get it out there for discussion," he added.
Discussion has begun.
On Nantucket last week, the reaction to the new business model was sharply negative, as island residents and political leaders condemned the multi-million-dollar price tag associated with an ambitious plan to replace much of the current fleet with sophisticated high-speed ferries that carry cars, passengers and freight.
"Who told [SSA general manager Armand] Tiberio that's what we want?" declared a stinging editorial in The Inquirer and Mirror, the newspaper of record on Nantucket.
On the Vineyard, reaction was more curious than negative, but on both Islands, discussion about the new service model centered on the same key questions: Will the Islands be forced to forfeit control of the public boat line that is their lifeline, and will the core mission of the boat line be shifted more toward satisfying the interests of the mainland communities? The SSA was established 40 years ago to provide affordable ferry service for year-round residents.
"Control is an important theme - there has got to be local control," said Richard Toole, a member of the Martha's Vineyard Commission, during a discussion at a commission executive committee meeting last week. "I agree and I think it needs to go one step further. We need to reaffirm the mission of the Steamship Authority. It's not a cash cow or tourist-driven, and it needs to meet our basic needs at the most affordable price possible," said commission member Linda Sibley. The MVC plans to develop a policy statement on the new service model before the end of the month.
Mr. Parker said there is no shift in core mission.
"I don't consider it a shift away from the mission at all," he said. He continued:
"I consider it a plan which will strengthen our ability to perform the core mission, because on the present model of replacing heavy metal boats with more heavy metal boats and paid for by more cars coming to the Island, we've already found out that it makes it difficult for Islanders to get back and forth. We have to limit the number of cars that come from the mainland to maintain the existing and growing demand from the Islands to go back and forth, and in order to pay for that service we need to maintain our revenues. Passenger service is a way to do that; it also contributes to the health of the Island economy. It's not a shift away from the core, it's a protection of the core mission.
"And as far as Island control is concerned, I don't think there is any question that it must be maintained. There is no way that mainland communities can understand the needs of Island communities that have no highway. There is no way they can understand and be expected to respond compassionately to that need."
As a series of public hearings opened last night with a governor's task force on ferry transportation to the Islands, many more questions hung in the balance.
"Establish High Speed Ferry Service to the Islands! Create Waterfront Jobs and Industry! Enhance Our Growing Tourism!" declared New Bedford Mayor Frederick M. Kalisz in advertisement posted on the city's web page this week.
"This Steamship Authority needs to be restructured, with both the Islands' needs and those of the mainland ports in mind," warned an editorial in the New Bedford Standard Times.
Mr. Parker said change is unavoidable.
"We have to move, we have to change it - it's going to take hard work and it's going to take accepting change on all fronts. We're looking at a long-term plan here and not just a one-season adjustment. How it falls into place, which happens first, is yet to be determined. It's all still up for discussion, it's still up for costing and revenue analysis as soon as its available," he said.
He concluded: "Every business often undertakes things important to the overall plan, and if you do not have the courage and the vision to make those decisions at the time they are available, you will atrophy and not succeed as a business. We believe this is the right move, we believe it has the proper vision for the authority and its services."I think we've embarked on a great adventure here; we need to turn it into a nuts and bolts trip. These decisions should be made on the basis of facts and data, not theory."