Nova Star CEO Mark Amundsen questioned about future of ferry service
Difficult goals lay ahead to cut taxpayer subsidies
Nova Scotia taxpayers will likely continue to subsidize the Nova Star ferry service, unless the company can accomplish a trio of difficult goals.
The company's CEO Mark Amundsen appeared Thursday before the province's standing committee on economic development.
He told the committee the company has three main priorities:
- Increase ridership to 80,000 passengers per year — last year it was 59,000
- Secure a contract for winter work
- Change the ferry's fuel source to natural gas
"We're working on all the three factors and are confident we can get to a subsidy-free future," Amundsen told the committee.
Each of the goals have their own particular challenges.This week, Nova Star released passenger statistics showing ridership has declined since last year. That revelation is particularly worrisome, considering province-wide tourism has increased overall.
Winter work is also a concern, following the expensive previous season spent berthed in South Carolina. Amundsen said he is in negotiations with a possible route overseas, but as a backup the ferry is also licensed to operate between the United States and Cuba.
In early August, officials with the Nova Star announced the vessel had secured a winter route between England and France. However, a British newspaper reported the ferry company looking to run the service between the two countries had not received approval from English officials.
The change to natural gas would eliminate Nova Star's reliance on oil. Amundsen told the committee last year the company spent $40,000 daily on fuel. While the cost of fuel has steadily decreased in the past year, natural gas remains a cheaper option.
'We're trying to be smart with our money'
The upgraded fuel system would cost $8 million to install. Amundsen said the company has tentative plans to have liquid natural gas delivered to the terminal in Maine, but no plans for refuelling in Yarmouth.
"We're trying to be smart with our money," he told the committee. "We're trying to spend it in the right areas."
So far Nova Scotia taxpayers have contributed $38.1 million to keep the service afloat.
"I think what the taxpaying public in Nova Scotia would really like to know is how much more?" said interim NDP leader Maureen MacDonald to Amundsen during the meeting.
Amundsen said if all three major goals can be attained, the service could be entirely subsidy-free in three years.
The Department of Transportation is currently deciding whether Nova Star represents the best company — and the best boat — for the ferry service between Yarmouth and Portland, Maine.
Officials are considering three alternative proposals, although today government staff said there are no clear frontrunners.
"We're not aware at this point of whether there's a better boat out there, or a better operator," said Alan Grant, executive director of policy and planning with the Department of Transportation and Infrastructure Renewal.
Amundsen warned that Nova Star spent $10 million on startup costs alone, which a new operator may also have to pay. He said there is no guarantee a different operator wouldn't also require public subsidies.