Nov. 16, 2005 — The V.I. Port Authority Board on Wednesday denied the Island Lynx's request to waive almost all local marine tariffs for the operation of its fast ferry service.
The waivers would have allowed the company to avoid pay pilot or wharfage fees, as well as ship dues, at VIPA owned boat terminals.
"The waivers are being sought to reduce the operating costs of the proposed ferry service during the critical start-up period and initial years of operation," R.C. Siebengartner, the company's manager, wrote to VIPA in early October.
Island Lynx, a new year-round, high speed, inter-island ferry, is scheduled to start service between the territory, Vieques, and Tortola in December–replacing the V.I. Fast Ferry Salacia, which has been whisking residents between St. Thomas and St. Croix for the past six seasons. Boston Harbor Cruises, Salacia's parent company, said they would temporarily pull their operation out of the territory, as Island Lynx could prove to be financially damaging competition (See "Fast Ferry Suspends Service in the Wake of Competition").
While VIPA board members said Island Lynx's request would give the company an incentive to offer their services in the territory, most also agreed that such waivers would be financially damaging to the Port Authority.
"We can't keep waiving these things when we have operating expenses," James Rodgers, VIPA board member said. "We tried that in the past, and it's only put us deeper the in red — we definitely can't afford to keep doing it."
Instead, members voted to deny Island Lynx's request, but lend them support in finding other funding sources to subsidize the tariff costs.
"Money is available through agencies like the Economic Development Authority, or the Public Works Department," Darlan Brin, VIPA's executive director, said. "We just can't do it — it's not fair to those other companies and vessels who are paying their fair share of the tariffs."
George Phillips, acting commissioner of Public Works, said Island Lynx wouldn't be able to receive support from his department right away. Phillips explained that Public Works can't provide assistance to a company that does not have a franchised route agreement — such as Varlack Ventures, which provides service between St. Thomas and St. John. The company has to have a long-term commitment and show they will be remaining in the territory, he said.
Brin added recent Homeland Security requirements such as increased security and manpower at the docks have increased VIPA's expenses, which the organization has to recoup through the tariffs.
An agreement between Atlantic Petroleum Trading Ltd. and VIPA was also considered at Wednesday's meeting. According to Brin, Atlantic proposed to construct and operate a twin pipeline system at the pier so incoming ships can be refueled by a tanker or barge operating from the opposite side of the pier.
Atlantic would also charge a 10-cent per gallon bunkering fee for vessels — or 10 cents for each gallon pumped into a ship. This represents an 8.5 cent increase from the current rate, Brin said, which is "extremely" reasonable when compared to docking facilities on the mainland.
However, according to Atlantic's proposal, the company would collect the 10-cent fee for the next 10 years — of which Brin and other board members disapproved. "We don't want to be tied to the 10-cent rate for such a long period of time," Brin said. "What happens if we need to increase it? We won't be able to do anything."
Rodgers added VIPA had already agreed to waive all fees for cruise ships docking at the Abrahamsen pier until April 2006.
"Ten years at 10 cents would make us lose even more money," he said. "That's not something I'm willing to consider."
Board members instead voted to enter into a five-year agreement. At the end of that time, the two entities will meet to renegotiate the rate.
In other action, the board voted to approve the terms of a contract between VIPA and HTA Caribbean for the construction of a sidewalk starting from the Motor Vehicle Department on St. Thomas to the end of VIPA's new commercial center at the Crown Bay Marina. The total proposed cost for the project is not to exceed $91,985, and the company will work in conjunction with Public Works to make sure any drainage and traffic flow issues are addressed.
The board wrapped up Wednesday's session by approving an agreement between VIPA and Burns and McDonnell Inc, for the upgrade of lighting systems at the Cyril E. King Airport. At a total cost of $85,966, the company will replace light poles along the airport's access road and install a new illumination system for the parking lot.
The board went into executive session to discuss negations between VIPA and Gallows Bay Development Partners — the firm hired to undertake the development of Gallows Bay dock on St. Croix. Brin said the board is still going "back and forth" on negotiations, as the firm wants to enter into a long-term lease with VIPA.
"We are still discussing where we stand," Brin said, "but I anticipate a groundbreaking within another month, month and a half."
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