The current deal to run the Yarmouth to Portland, Maine ferry is the best option for taxpayers and the company, according to Bay Ferries chairman and CEO Mark MacDonald.
MadDonald responded to his critics the same day Bay Ferries launched the CAT’s 2016 sailing season. The ferry operator is expecting to get a $23.3 million subsidy for the 2016 sailing season.
“The model — which we think was best for taxpayers but also afforded our company some degree of protection — was the model of recovery of costs plus a fee,” MacDonald said.
Bay Ferries’ contract with Nova Scotia requires the government to cover any operating deficiency that the company incurs as well as a management fee and a bonus, should the ferry do better than expected.
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The price tags for the management fee and the possible bonus are being kept secret. Both the NDP and the Tories have criticized the Liberals for a lack of transparency.
Ferry service carries ‘a lot of uncertainties’
Bay Ferries says it pointed out “a lot of uncertainties” to the Nova Scotia government, connected to the Yarmouth to Portland ferry service.
The change in ferry operators and ferry name, and the stop and go nature of the service over the last several years are some of the factors that make the market more volatile, MacDonald said.
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In a letter written to Progressive Conservative Leader Jamie Baillie, MacDonald said if the company took on all of the risk related to operating the service, it would have had to charge the government $5-8 million more per year due to the “unpredictability” in the market.
Asked whether the government could be on the hook for $5-8 million more depending on how the season goes, MacDonald said he doesn’t think that will happen, but “it’s possible.”
“It’s not hard to see that there are massive swings that can take place in this business,” MacDonald said.