- the native canadian

(June 26, 2005) — As Rochester's ferry service to Toronto is expected to resume Thursday, many of the same challenges face the new owners and operators.

Engine problems have caused delays. The ship is still sailing under a foreign flag, creating additional costs. And ticket sales so far are slow.

But Rochester Mayor William A. Johnson Jr., probably the biggest cheerleader for the ferry project, is optimistic the ferry is here to stay and expects it to be "extremely profitable" in time.

"I truly believe the response is going to build as the vessel continues to operate," he said. "We constructed our business plan on the most conservative assumptions, on an extremely low ridership." (Yeah? So is that some sort of a guarantee the venture will succeed? Simply because you lowered the expectations?) Written before the city purchased the ship in February, the city's feasibility study anticipated that 385,705 passengers would ride the ferry annually. In a typical year, 143,000 would be expected to ride in the first six months.

Don Cormier, vice president of operations and safety for Bay Ferries Great Lakes, the company managing the ferry service, isn't releasing ticket sales figures but characterized the sales as "quite modest."

"There's a lot of space available," Cormier said.

What's next

Today: Free public tours of the ship are slated from noon to 5 p.m. at the Port of Rochester.
Monday: The new Toronto terminal opens.
Thursday: The ship sails. For more information, schedules and rates, call (877) 283-7327 or visit www.catfastferry.com.

He acknowledged that it is going to take time for the public, especially in
the Toronto market, to realize the ship is up and running.

"We expect the consumer is waiting to see that the product is actually offered before they commit," he said. Experience shows that most will book within a week of their trip.

The service was delayed almost two weeks to finish $1.5 million in engine repairs, fix mechanical glitches and complete inspections. It's a parallel to last year's start-up when similar repairs caused a seven-week delay.

While many in the community view the ferry as a bold experiment to help the local economy, not everyone is as optimistic as the mayor.

Shannon Stevenson, 35, a hairdresser from Henrietta, vows never to set foot on the vessel, which she believes is cursed.

"Imagine it breaks down, or something happens in the middle of Lake Ontario," she said. (Sweet Jesus. Now the locals are trying to conjure up a Great Lakes version of the Bermuda Triangle.)

Others, like Antoinette Peoples, 38, of Rochester, is considering riding the ship to Toronto, but only after service is steady.

"It looks really good," she said, looking at the docked ferry last week while she ate an ice cream cone she bought at the terminal. "I might go a couple of times."

The Coast Guard and the ship's insurers make sure the ship is safe before passenger service begins. The requirements for life vests, fire sprinklers and medical training for the crew have been met.

CATS challenges

When last year's operators, Canadian American Transportation Systems, or CATS, brought the ferry to Rochester from Australia, they planned a May 1 startup. But the first voyage was June 18. The ferry arrived a month later than planned, partly because of repairs needed to fix a gash in its hull when the ship docked in New York City. And up to $1 million in engine work needed to be done to repair design flaws before the ship could start service.

Even after it began, there were glitches. Passengers occasionally had to resort to buses when the ship canceled trips because of mechanical problems.

And CATS was losing money. Pilot fees cost them $6,000 a day because the ship flew under Bahamian registry. Canadian customs also was charging $2,500 a day, and CATS saw no revenue from trucking cargo because there was no system in place in Canada to inspect the cargo. They had hoped the trucks would bring them $18,000 a day.

After 80 days, CATS suspended service, citing $1.7 million in debt since service began. They said 133,000 people took a ride across Lake Ontario, although many took advantage of half-priced specials good for weekdays in the summer.

Maritime liens were placed on the ship by its creditors. And, prompted by questions from lawmakers about the disposition of taxpayer money earmarked to help start the service, the state Comptroller's Office began an audit, which will take months to complete.

New owners

In February, the city bought the vessel for $32 million at a federal foreclosure auction using part of a $40 million loan from the Export Finance and Insurance Corp. of Australia. EFIC was the top mortgage holder of the ship, which cost $42.5 million when constructed two years ago. The city will pay the loan off in 15 years, with quarterly payments beginning in November.

City leaders hoped to have the ship up and running by Memorial Day, but the first launch was scheduled for June 17 so they would have plenty of time to get the vessel shipshape.

But there were more problems.

Engine repairs were taking longer than expected, and on May 16 the ferry fell off wooden blocks at dry dock in Canada. (Well, sort of. The ship slipped on the blocks, but sustained no damage and created a few extra hours of work to set it properly. It's not like there was a monumental thud causing days of delay. No big deal.) Then the computerized propulsion system failed. An expert was flown in from The Netherlands to reinstall the software.

The hurdles are being worked out. Thursday, the ferry made a test run to Toronto, using each of its four engines for the first time this year.

This weekend the ship is undergoing final testing in the middle of Lake Ontario, where the engines — each with 11,000 horsepower — will be revved to maximum capacity. New gaskets have been installed to prevent water from leaking from them.

"These engines are prototype engines, new on the market," Cormier said. "These are upgrades that have been identified in order to correct latent defects that existed in these engines."

According to a pre-inspection report before the city's purchase, the ferry's engines were "problematic" and repairs were to be expected.

But after the ship was sold, the warranties disappeared. The city negotiated with the engine makers, MTU Friedrichshafen GmbH, based in Germany, who allowed a continuation of the engine warranty if the city paid for $1.5 million in upgrades. A $600,000, two-year maintenance agreement was also purchased.

The cost of the repairs is being paid by the Rochester Ferry Co., an authority formed to oversee the ferry operation. Board President Benjamin Douglas, also a city councilman, said last week that he didn't know what the repairs were costing, but added he wasn't worried because all the expenses were within their startup costs.

The delay has meant no passenger revenue is being generated, but at the same time, fuel, insurance and some salary expenses, as well as hefty pilotage fees, are being saved.

Familiar hurdles

As it did last year, the ferry will start service sailing a Bahamian flag. The ship was registered in the Bahamas, presumably because it was less expensive to do so. But, as a consequence, a U.S. or Canadian pilot must accompany the ship on each voyage since it is considered a foreign vessel.

Cormier said he intends to have the ship reflagged, but the crew needs to be trained under U.S. regulations, which require logged time aboard the vessel. It will take a few weeks until the crew becomes certified.

Canadian customs fees, which had cost CATS $2,500 a day, have been negotiated this year, but Cormier would not say how much they will cost.

"We're a private operator. We don't disclose that publicly," he said. (You can bet the farm there's going to be a lot of 'undisclosed details'.)

And the commercial trucking market, one reason the 284-foot ship was built so large to begin with, is not a focus for Bay Ferries. Trucks certified through FAST and C-TPAT, two programs that speed border inspections by investigating low-risk applicants ahead of time, will be allowed on the ferry.

"We want motor coach traffic, car traffic," Cormier said. (No doubt, M. Cormier. Since the boat's going to sail anyway, it's better for the bottom line to load up with the higher profit margin fares than those piddlin' walk-ons.)

Johnson said the problems CATS cited for failing were "greatly exaggerated. ... Overall, we recognize all of those issues have been well managed and mitigated if not eliminated."

New managers

Bay Ferries, which has operated ferries for decades in Maine and Canada, was awarded a three-year contract for $1.3 million annually to manage the ferry. It could be extended.

"We did not want to invest our time, resources and energies only to create a service for three years and walk away from it," Cormier said.

Bay Ferries has hired 45 people to work in Rochester and another 16 in Toronto. It uses its existing call center staff in Prince Edward Island to accept reservations. Salaries are to be paid by ferry revenue. (Wow! Forty-five jobs paying $40K a year! That's GREAT! Because that's about what it takes for one person to maintain a modest middle-class lifestyle in the Rochester area.... err... umm... all the jobs DO pay at least $40K a year... don't they??)

What will riders of this year's ferry find different this year? Slightly higher ticket prices, a new paint job and logo on the ship and a new 38,000-square-foot terminal to walk into when the ship docks in Toronto. Other than that, "they should see a similar product," Cormier said. (Oh, so that's just another way of saying 'nothing's really changed' is it?)

This year, the voyage will take a little longer, 2 hours and 30 minutes — 15 minutes longer than last year, making the promised schedule easier to meet.

Cormier said special vacation packages are being developed. But the popular half-price discounts available during less busy weekday trips last year probably won't be seen again.

Cormier expects the number of passengers to keep growing.

"We didn't get into this business expecting not to be successful," he said. "Our vision is to build this long term. It won't be easy, it will take time. Once people experience the product, they will find the convenience in traveling with us, and tell a friend. It will be one of the things to do." (Oh. You mean like buying full-sized SUV's and trucks was 'one of the things to do'?)

GLIVADAS@DemocratandChronicle.com