Post by ferryfast admin on Nov 13, 2007 17:55:23 GMT -5
USVI ferry owners threaten major shut down this week
Published on Tuesday, November 13, 2007
By Susan Mann
Caribbean Net News
St Thomas-St John Correspondent
Email: susan@caribbeannetnews.com
ST THOMAS, USVI: Two US Virgin Islands ferry companies, Varlack Ventures and Transportation Services, have issued a statement indicating that they plan a major reduction in the number of daily runs between St Thomas and St. John “within days.”
Particularly hard hit would be shift workers who travel back and forth between the two islands, and St John school children who travel to St Thomas to attend secondary school, as well as those attending private schools on St Thomas.
Many cruise ship visitors disembark in Charlotte Amalie (St Thomas) for the day, and then take the St Thomas ferry to spend the day on St John. Also, those tourists headed for a beach vacation on St John arrive and depart the USVI at the Cyril B. King airport on St Thomas.
The two franchise owners notified USVI senators and other officials through their attorney last Thursday that they could no longer continue to “use any private, family or personal funds, assets or collateral …to fund (ferry) operations.”
The attorney, St Thomas resident Claudette Ferron, said in her letter that federal law mandates that government agencies are responsible for funding the entire operations of the franchised ferry services using local and federal funds.
Ferron also said past USVI administrations had "improperly redirected" tens of millions of dollars provided by the federal government for the St Thomas-St John ferry service to other public works projects that have nothing to do with ferry service.
The letter stipulated that the ferry companies currently incur a cost of $6.18 per passenger for each trip, with the fares covering only $4.13 per trip. Ferron also stated that most passengers do not pay the regular fare of $5.00 because they qualify for special discounts in the form of commuter, bulk rate, student and senior fares.
“The rates set by the Public Services Commission do not provide a fair and reasonable return on the companies' investment,” said the attorney.
The ferry services do not permit individuals who legitimately qualify for senior citizen discounts in other parts of the United States to receive this benefit while in the territory. Instead, senior citizens must show proof that they are residents of the US Virgin islands.
Ferron’s letter said, "The companies have lost tens of millions of dollars. The companies (Varlack Ventures and Transportation Services) are required to pay all government taxes and fees, but receive no tax breaks. The companies have no obligation, legally or otherwise, to pay for 'public marine service', it's contrary to the US Constitution to force them to do so.”
The US Virgin Islands Public Service Commission (PSC) regulates the two ferry companies because they each have a long standing exclusive contract in place to be the only ferry service providers between St Thomas and St.John.
Former USVI Licensing and Consumer Affairs Commissioner Andrew Rutnik told Caribbean Net News that the ferry service(s) should be entitled to federal mass transportation subsidies, but they must first make records of qualified audits available.
Rutnik further indicated that the issue was an ongoing concern while he was commissioner. He concluded his comments on the ferry service funding matter with, “There is no doubt that they are entitled to the subsidies, but they need to have qualified audits available.”
Local counsel for the PSC later supported Rutnik’s comments in a letter of response sent to Ferron, and cited by local media.
On Friday, the Governor’s Office issued a press release on behalf of the USVI Dept. of Public Works regarding the looming strike.
“(Commissioner) Smalls wishes to assure the general community that the VI Government has demonstrated its commitment to improving marine transportation and rendering financial assistance to the ferryboat franchise operators by approving an appropriation of $1,000,000 in Fiscal Year 2006. In early Fiscal Year 2007, the Office of Management and Budget released $500,000 each to Varlack Ventures, Inc. and Transportation Services of St John, Inc. to assist them to defray the increasing cost of operation to service the St Thomas – St John regulated route. Moreover, the Government applied to the US Department of Transportation, Federal Highway Administration for $4,000,000 to purchase new ferries for the franchise operators.”
The federal funding was not approved for the new ferries.
Small also said, ““I want to assure the residents of the Virgin Islands, especially the commuters between the islands of St Thomas and St John, that the Government of the US Virgin Islands is prepared and available to collaborate with the franchise operators and render any assistance it can for the betterment of the people of the US Virgin Islands.”
Smalls said the Governor had convened a meeting with his financial advisors and the Commissioner of the Department of Public Works on Wednesday, October 31, 2007, and, “as a result of the meeting, the Governor is preparing to request that the 27th Legislature continue to provide operating subsidies to the ferryboat franchise operators.”
The Department of Public Works has scheduled a meeting with the three ferryboat franchise operators for Wednesday, November 14, 2007 to discuss issues pertaining to the subsidy.
Ferron said the companies provide ferry service to “between 1.5 to two million passengers” each year. "Unfortunately, both the people of the Virgin Islands and the government itself have become accustomed to, and addicted to, the companies subsidizing and paying for public marine transportation."
Ferron also says that appropriate financial records have been provided to the PSC. In early Fiscal Year 2007, the Office of Management and Budget released $500,000 each to Varlack Ventures, Inc. and Transportation Services of St John, Inc.