The city of Rochester, N.Y., plunked down $32 million at a federal auction in late February and came away with the Spirit of Ontario, the idled fast ferry that got off to a poor start last spring. Service was halted in the fall.
The Rochester Ferry Co., formed by the city to operate the vessel, expects to restart service to and from Toronto in late May.
But first, maritime liens must be settled and lenders paid in order of priority, according to Linda Kingsley, corporate counsel for the city.
The Export Finance and Insurance Corp. (EFIC), the Australian government’s export credit agency, was the only other bidder. EFIC made a first mortgagee credit bid of $29.6 million to clear the first mortgages as well as maritime liens, said Chief Operation Officer Michael Jackson.
Canadian American Transportation Systems (CATS), the vessel’s previous owner, has debts of $40.9 million, secured by its assets, according to city documents. Kingsley said it may be at least a month before the debts are sorted out. EFIC is lending Rochester $40 million to run the ferry, so the city will have about $8 million left for operating expenses, which means, “CATS is out of the picture,” she said.
CATS’ telephone number was not working, and company officials could not be reached.
The operation shut down in early September after only three months. The ferry can cruise at 42 knots and cross Lake Ontario in 2-1/4 hours. It carried 133,344 passengers and 21,239 cars, city records show.
The debut of the $42.5 million, 284’ aluminum ferry built by Austal Ltd. was delayed by mechanical and other issues. Further problems included Canadian customs fees, no approval for truck traffic (a key to financial health), no permanent terminal in Toronto and insufficient funding to keep operating while the issues were resolved. The operation also faced a lawsuit from creditors.
The city’s business plan factors in truck and bus traffic and projects that the service will be profitable in its second year. The vessel will be reflagged in the U.S. to eliminate pilotage fees associated with its Bahamian registry. Officials must also decide if the vessel’s marine operations will be contracted out.
The Toronto Port Authority expects to finish the interior of a new passenger terminal within a few months, authority chairman Henry Pankratz said in a statement. The heated building has an escalator, elevator and some common areas finished.
“Rochester Mayor William Johnson Jr. should be congratulated and praised for his tireless efforts to keep the dream of the Rochester-Toronto fast ferry alive,” Pankratz said.
But one potential bidder wasn’t so sure about the route’s viability.
Ahmet Paksoy, general manager of Istanbul Fast Ferries Co. Inc., said in a statement after the bidding that the Toronto-Rochester route is not financially feasible and that ferry systems operate best on economies of scale. However, the addition of casino gambling might change the equation, he said.
The Turkish company, which operates 28 vessels that carry 12 million passengersp a year, considered buying the ferry. But it didn’t want to pay over $30 million, because of the added cost of getting the ferry back to Istanbul.
— Dale K. DuPont