SSA Studies New Deals for New Bedford Ferries

By JULIA WELLS

Steamship Authority treasurer and acting general manager Wayne
Lamson said yesterday that a freshly minted plan for a high-speed ferry
project laid out last week by the city of New Bedford is now just one of
three new proposals.

"We got a proposal last Thursday night, there was the one that
New Bedford showed everybody on Saturday, and we got another one just
last night," Mr. Lamson said from his office in Woods Hole.

All three proposals are from the Nichols Brothers Boat Builders
Inc., a shipyard in Washington state. All of the proposals involve a
single ferry - a 500-passenger, high-speed ferry built by the
shipyard in 1999 for $8.5 million. The ferry is for sale, although Mr.
Lamson said yesterday he does not know why.

Three weeks ago the boat line governing board voted 2-1 to reject a
high-speed ferry project that would have cost the SSA $10.6 million for
lease and purchase of the vessel during the next three years. At the
time the proposal was described as the best deal - and the only
deal - available.

Mr. Lamson said all that has changed suddenly.

"I don't know if somebody put a bug in someone
else's ear, but here we are," he said.

The project that was rejected last month was intended to replace the
passenger ferry Schamonchi.

The SSA never put out a request for proposals (RFP) for the ferry
project.

The original proposal called for the SSA to lease the same
high-speed ferry from Boston Harbor Cruises. Boston Harbor Cruises had
planned to buy the ferry from the Nichols shipyard, transport it to the
East Coast and lease it to the SSA for $1.2 million a year for a minimum
of three years. At the end of the three years the SSA would have had the
option to buy the ferry for $7 million.

After the vote to reject the proposal last month, Mr. Lamson said
SSA managers contacted Boston Harbor Cruises to tell them the deal was
dead.

Then he said last week the SSA suddenly got a new offer to lease the
ferry, only this time the offer came directly from the shipyard.

Mr. Lamson said the offer came in last Thursday night. He said
senior managers had just started to look at the offer on Friday when New
Bedford city solicitor George Leontire called. "He asked if I had
a problem with him calling Nichols Brothers to tell them they need to
work with the Authority," Mr. Lamson said.

He said he did not know how the city solicitor knew that the
shipyard had made an offer to the SSA.

"I told George I didn't have a problem with that because
we were getting ready to talk to Nichols anyway about their
offer," Mr. Lamson said.

At a meeting with a group of Vineyard officials on Saturday, Mr.
Leontire unveiled a lease-buy proposal for the high-speed ferry that he
had negotiated with the Nichols shipyard.

Mr. Lamson said Mr. Leontire's proposal was sent to the boat
line late on Friday. He said the shipyard sent a third proposal to the
boat line on Wednesday night this week.

The three new proposals are all variations on the same theme: a
lease-buy arrangement for the high-speed ferry. One proposal calls for
the SSA to lease the ferry for two years with an option to buy at the
end of the lease; another proposal (the New Bedford plan) calls for the
boat line to lease the ferry for six months a year for two years with an
option to buy at the end of lease; the third proposal also calls for the
SSA to lease the ferry for two years with an option to buy at the end of
a year. Each proposal has a different set of strings attached to it.

Mr. Lamson was still working on a financial analysis of the
proposals yesterday, but he said all three proposals add up to about the
same amount of money and would cost the public boat line about $1
million a year compared with the $1.2 million annual cost attached to
the proposal that was turned down last month. The option to buy calls
for the SSA to pay about $7.5 million for the ferry, Mr. Lamson said.

Mr. Lamson said the central problems that he laid out in connection
with the original proposal remain the same:

* The boat line does not have $7.5 million to buy a ferry, and
any capital expenditure in the next three years will collide with other
planned capital projects, including a plan to replace the ferry Islander
and a plan to renovate the Oak Bluffs terminal complex.

* No market study has been done, so passenger projections for
the fast ferry service are largely fictional.

"There are a lot of factors that go into this. We don't
know any more about the ridership than we did before, and then there is
the timing of the replacement of the Islander and the renovation in Oak
Bluffs. The board needs to look at the exit strategy: If this does prove
successful and we want to buy the boat, where is the money going to come
from to do it?" Mr. Lamson said.

He added: "So the board will have to decide: Is $200,000 a
year enough of a difference for one of the members who voted against the
other proposal to reconsider?"

At their meeting this week, the Falmouth selectmen voted to send a
letter to Mr. Lamson asking him to prepare a management summary on the
new high-speed ferry proposal in time for their Monday meeting next
week.

He said he expects to bring at least one of the new proposals to the
SSA board at the November monthly meeting.

He stopped short of commenting on whether the high-speed ferry
proposal is a prudent business decision for the public boat line.

"Last month the board made a decision after weighing all the
issues - whether it is prudent, that is their job to
decide," he said.