Privatizing Plan for Schamonchi

Steamship Authority Tells Union That Losses Could Be Stemmed If Another Operator Runs New Bedford Ferry


After only three years of owning the New Bedford passenger ferry Schamonchi, Steamship Authority senior managers are now proposing to convert it back to a private operation, the Gazette has learned.

"Unfortunately, our efforts to improve the Schamonchi's financial performance have not been successful . . . . But just because the authority cannot operate the Schamonchi profitably does not mean that the service should stop . . . and there exists one course of action that may prove successful . . . namely allowing a private operator to provide the service instead of the authority," wrote boat line chief executive officer Fred C. Raskin in a letter to union leaders late last week.

The letter went out Friday and was obtained by the Gazette yesterday.

Purchased by the boat line three years ago for $1.2 million from the Thompson family, the Schamonchi is currently running huge annual operating deficits and is now on target to lose more than $800,000 this year. In recent months SSA managers have said repeatedly that they do not know how long they can commit to run the service.

In his letter, Mr. Raskin did not shy from the topic of heavy union manning requirements on the ferry.

"We have every reason to believe that a private operator, who would not be bound by the restrictive work rules for its employees that the authority must follow, would be able to conduct its operations much more efficiently," Mr. Raskin wrote in part.

Mr. Raskin said the plan to convert the Schamonchi to a private ferry will follow the Pacheco Act, the state anti-privatization law, to the letter.

The Pacheco law is aimed at preventing public agencies from using private contracts unless they can demonstrate cost savings. Among other things, the law provides a list of protections for employees who might lose their jobs because of the change, including minimum wage requirements for any private contractor who takes over the service.

Boat line compliance with the Pacheco Act was written into the new enabling legislation adopted by the state legislature last year. The legislation also expanded the SSA board of governors from three to five by adding voting members from Barnstable and New Bedford.

Under terms of the Pacheco Act, the SSA will also encourage its employees to organize and put in their own bid for the service, Mr. Raskin said.

"We expect to begin this process within the next few weeks," the CEO wrote, referring to the process to put the ferry out to bid.

The move comes at a time when the boat line has been trying to ink a deal with a private contractor to run high-speed passenger ferry service between New Bedford and the Vineyard starting next summer. That plan appeared to be on a fast track to completion until two months ago when SSA managers learned that, because of their ownership of the Schamonchi, a conventional ferry, such a move could run afoul of the Pacheco Act.

The general counsel for state auditor Joseph DeNucci told boat line senior managers that if the SSA issues a license for a private ferry service between New Bedford and the Vineyard, it would be forced to continue operating the Schamonchi or risk violating the Pacheco Act.

New Bedford city officials have been on a quest for the last three years to develop expanded ferry service between the Whaling City and the two Islands.

A final vote by boat line governors is still required before the license for a fast ferry can be issued to New England Fast Ferry, a private marine consortium that wants to run the service.

It is unclear how the plan to privatize the Schamonchi will be received by the boat line unions, especially the union that includes some 350 unlicensed deck officers. One union member who did not want to be named said yesterday that the move is "just another end run around Pacheco."

Union leaders have opposed the plan to contract with New England Fast Ferry for the high-speed service because they want the boat line to run the service.

Citing a risky market, Mr. Raskin has said it makes more sense to license a private contractor in that case.

Mr. Raskin did not return telephone calls from the Gazette yesterday.