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Ferry Companies Want Amended Legislation to Ensure Viability

Oct. 12, 2006 — While the V.I. government is required by law to provide funding for local ferry operations, franchise ferry companies have not yet "received a penny," Claudette Ferron, legal counsel for Varlack Ventures Inc. and Transportation Services of St. John Inc. said during a Public Services Commission meeting Thursday.
Ferron said that a lack of funding, coupled with infringements made by private transportation entities upon the ferries' franchise operation between St. Thomas, St. John and Water Island, need to be addressed "expeditiously."
She asked PSC officials to support the idea of the ferry companies approaching the Legislature "for a redrafting or amending" of the law, which would clearly define franchise operation routes, along with the PSC's authority to regulate mass transit carriers and levy fines on private entities found violating the franchise agreement.
While PSC officials said they would not be opposed to the request, they also said that audited financial statements first have to be submitted by both ferryboat companies.
"The only way the PSC can assist in determining fair rates, the only way we can actually help, is if we get your financial information," PSC board member Joseph Boschulte said.
During the meeting, neither Ferron nor representatives from either Varlack Ventures or Transportation Services could say how much the companies were losing per year due to private companies offering similar transportation services between St. Thomas and St. John.
Ferron listed a number of entities that were allegedly violating the franchise agreement, including hotels such as Caneel Bay Resort and Westin Resort & Villas on St. John, along with Marriot Frenchman's Reef on St. Thomas. Private intra-island ferries, such as marine transport services offered between Water Island and St. Thomas, were also included, along with barges operating between St. Thomas and St. John.
Representatives from Caneel Bay said their ferry services are offered to guests as part of pre-packaged tours and are provided at no cost to employees. "We're not trying to make a profit with our ferry service," Rik Blyth, the resort's general manager said. He added that when Caneel Bay's ferry is not running, the resort looks to Varlack Ventures to ship passengers.
"I thought we had a very symbiotic relationship with the ferry companies," Blyth said. "We've actually paid Varlack Ventures something like $50,000 to bring our passengers over for us." He added that Caneel Bay offers private ferry service to attract off-island guests to stay at the resort.
"If we didn't offer this service, our occupancy rates would plummet," he said.
PSC board member Donald "Ducks" Cole suggested that private ferry services, such as those offered by Caneel Bay, should pay ferry boat companies for the loss of business. However, Cole and other board members could not nail down a specific amount since representatives from the franchise ferry boat companies did not have the audited financials available.
"The only way to determine that amount is if the infringements stop," Kenrick Augustus, general manager for Transportation Services said.
Ferron said that reworking the existing law is the first step in that process. She said that the companies have been preparing a draft bill, which does not stop private entities from offering their services within the territory, but rather "maintains funding" for the franchise ferry companies.
"There is a way to regulate the franchise routes so that the operation of private carriers will not be impaired and the perpetuation of the public mass-transit system between the islands would be maintained," she said. "We need to both maintain local transport and allow those who wish to use private transport to do so."
Ferron added that seeking a government subsidy and asking the V.I. Port Authority to lift wharfage and dockage fees would be a step in the "right direction."
"Taxing the ferry companies to perform a public government function is tantamount to the government taxing VITRAN for offering bus service," she said. "This situation has to be done away with, especially since the ferry boats are not receiving appropriations from the government."
"We're really in a regressive financial situation," Ferron added.
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