Half the $21 million available for start up costs
Minister Graham Steele speaking with Yarmouth Vanguard journalist about the deal reached between the province and STM Quest. TINA COMEAU PHOTO
by Belle Hatfield
“We have a deal with STM Quest. We have successfully concluded our negotiations with them for provincial financial support.”
In an interview with the Vanguard, Economic and Rural Development and Tourism Minister Graham Steele provided the first media briefing just after lunch on Thursday, Sept. 5. He said that he left Halifax immediately after securing cabinet approval for the deal negotiated between the province and STM Quest for establishment of a new ferry service between Yarmouth and Portland, Maine. He arrived in Yarmouth after lunch, back less than a week after he had joined negotiators when the deal was reached at the Grand Hotel on Friday, Aug. 30. “The most significant milestone has been reached,” he said of the successfully completed negotiations.
The signing agreement will be concluded once the company has tied up the loose ends with the ship’s owner. Steele said the province will be the last signator, after joint venture partners Quest Navigation and ST Marine sign off.
There are still several major elements to be put in place before a ship sails up Yarmouth harbour, but the minister said “the province has now done what is within its power to do."
Among the things remaining to be negotiated is formation of the joint venture company that will operate the service. That joint venture involves Quest, a Maine-based company and ST Marine, owner of the ship. The new company is bringing International Shipping Partners, a world-leader in providing ship-based passengers services, into the deal to provide the passenger component of the service.
In addition, the ferry terminal in Yarmouth must be transferred and upgrades and temporary facilities established; border services and homeland security requirements must be met, the marketing plan has to be developed, the marine licences to clear the vessel to sail in Canadian/American waters, and port berthing contracts must be negotiated.
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Although Steele acknowledged there are still “hoops to be jumped” he has been given assurances that the details left to be ironed out can be accomplished in time to meet the 2014 deadline.
The Vanguard reached Quest Navigation’s chief operating officer Steve Durrell on Wednesday, Sept. 4, in Singapore where the company is now putting the finishing touches on its partnership agreement with ST Marine, owner of the ship the company has secured for the service.
The province’s agreement with the company stipulates a daily service beginning May 2014, which will run until the end of October yearly.
The province’s agreement with STM Quest will provide half of the $21 million commitment in the company’s first year of operations and a further 1.5 million annually for the remainder of the seven-year deal.
Steele told the Vanguard that in negotiations it was apparent that, for this company, start up costs are going to be the significant factor. The agreement provides the money as a forgivable loan. It is forgivable as long as the ship operates as proposed, he said.
Other safeguards have been built into the agreement, including stipulation of a morning sailing out of Yarmouth. Steele said that during the course of the seven-year operating agreement that schedule can't be changed without provincial approval.
Steele said and he is confident this is a sustainable deal.
“This is good news for everybody in the southwest and right through the province,” he said.