SSA Receives Bids for Service

Two Bidders Respond to Request for Ferry Service Proposals from New
Bedford; One Offers Year-Round Run

By JULIA WELLS
Gazette Senior Writer

Expanded ferry service between New Bedford and the Vineyard moved
one step closer to reality this week after senior managers at the
Steamship Authority got their first look at two proposals from private
companies who have an interest in running the route.

But in a move that left lingering questions about the wisdom of
expansion in the current economic climate, one of the brightest lights
in the private ferry business - the family-owned Hy-Line Cruises
in Hyannis - decided not to submit a proposal.

"It is still a speculative run. We had a great interest in New
Bedford, but we chose to not get involved this time around," said
Murray Scudder, vice president of Hy-Line Cruises, yesterday.

Hy-Line operates a number of passenger ferries between the Cape and
Islands, and it runs a year-round high-speed passenger ferry between
Hyannis and Nantucket.

As one part of a planning effort aimed at examining the market for
ferry service between New Bedford and the Vineyard, the SSA had put out
a request for proposals (RFP) to see whether there is any interest from
private operators. The deadline for responding to the RFP was last
Friday.

Boston Harbor Cruises and New England Fast Ferry LLC, a newly formed
marine conglomerate, both submitted proposals.

SSA chief executive officer Fred C. Raskin has a prior business
relationship with one of the principals in New England Fast Ferry, but
Mr. Raskin took steps to avoid any conflict of interest by filing a
disclosure this week.

The boat line has not made any details public yet, but it is
understood that Boston Harbor Cruises wants to run summer service using
a high-speed ferry, while the other company is interested in running two
smaller boats year-round, one into Oak Bluffs and one into Vineyard
Haven.

Two other companies submitted letters of interest but no formal
proposals.

The letters of interest came from Fox Navigation, a Connecticut
ferry company, and Water Transportation Alternatives Inc., a Quincy
marine company that operates commuter boats.

The Fox Navigation letter was cursory, but in a four-page letter two
partners in the Quincy company laid out a series of concerns about the
terms of the RFP which they described as onerous and riddled with
financial risk. These terms included:

* The requirement by the boat line that any private operator
post a $3 million performance bond.

* Docking fees at the State Pier in New Bedford, which could
run to $1 million a year according to the posted rates.

* Uncertain arrangements for parking fees and parking lot
management in New Bedford.

Mr. Raskin brushed off the critical comments from Water
Transportation Alternatives, calling them uninformed.

"I don't know who these people are, but they
didn't do a lot of work, they just threw some spaghetti on the
wall. The RFP did exactly what I wanted it to do - it discouraged
people who weren't real and it encouraged people who are willing
to make an investment," Mr. Raskin said. "We have two other
committed and responsive submissions, and hopefully ones that will prove
to us that they can do this, or give us the courage to do it
ourselves," he added.

But yesterday Mr. Scudder echoed many of the concerns raised by the
Quincy marine company.

"We did feel that the RFP was onerous in some ways," he
said, adding:

"Certainly the performance bond was one part of it, and also
the docking fees in New Bedford, but it also wasn't clear that the
Steamship Authority would be willing to grant exclusive rights of
service to the operator - they wanted to hold all the cards, which
I understand - but I think whoever goes in there should have an
exclusive right to service," Mr. Scudder said.

Two years ago, the Scudders were poised to buy the passenger ferry
Schamonchi from owner Janet Thompson when the Steamship Authority
decided to trump their move and buy the ferry. The boat line ran the
Schamonchi for the second summer this year with an operating loss of
some $800,000.

This week Mr. Scudder spoke publicly for the first time about the
Schamonchi, dispelling widespread reports that Hy-Line had planned to
replace the Schamonchi immediately with a high-speed ferry.

"We weren't going to go in and run high-speed, we were
going to run the Schamonchi for a few years and do some R&D
[research and development], take it slow and see what the market would
do, see if it made sense," Mr. Scudder said.

"We are interested in that market, but it's not a
slam-dunk by any means; it's going to take somebody a lot of
work," he said. Mr. Scudder said the decision not to submit a
proposal was also influenced by the fact that Hy-Line Cruises is about
to put a new high-speed Grey Lady on the Nantucket run. "Maybe
we've missed the boat, maybe we've blown this one, but
you've just got to make a business decision and say you
can't do it right now," he said.

He also expressed surprise at the purported plan by one company to
run year-round service between New Bedford and the Vineyard.

"I thought that was really strange. The Steamship Authority is
losing three quarters of a million dollars on that service in the cream
of the summer - how much would it lose if it ran
year-round?" Mr. Scudder said.

Mr. Raskin said year-round service was listed as advantageous in the
RFP at the request of Vineyard boat line governor Kathryn A. Roessel.
Ms. Roessel said yesterday that she added the year-round component as a
way to make the service a benefit for the Vineyard.

"If this service is done at all, it shouldn't be done if
it's only a benefit to New Bedford, it should be a benefit to the
Vineyard," Ms. Roessel said. But she said the SSA will not run
year-round service to New Bedford.

"I think I'm on pretty safe ground in saying the
Steamship Authority would not at this time dream of attempting to run
year-round service. It's too risky to commit public money to that
kind of thing. But if there are people out there that are so deeply
capitalized they feel they can risk running year-round, then that may be
interesting," Ms. Roessel said. The Vineyard boat line governor
said she understands that New England Fast Ferry has lots of money.

"I understand that this company is deeply capitalized and
supported by money from other concerns," she said.

In his disclosure filed this week in accordance with state ethics
laws, Mr. Raskin said James Barker, one of the principals in New England
Fast Ferry, was a former board member for Eastern Enterprises. Mr.
Raskin was CEO at Eastern Enterprises for many years.

"I can vouch for him. I think he's a good honest
businessman with excellent credentials," Mr. Raskin said
yesterday.

Boat line managers will not look at the financial information in the
two RFPs until the service component of the proposal is evaluated. Mr.
Raskin said he expects to have a recommendation from management in the
next two or three weeks; he said an in-house evaluation of an expanded
SSA-run service between New Bedford and the Vineyard is nearly complete.

"I don't think we're there quite yet, and that
will be the toughest issue. The good news is we have two submissions
from very credible, worthwhile organizations that seem to have a history
with developing these services," he said.