An independent ferry based in the Southeast Alaska community of Coffman Cove on Prince of Wales Island will not be starting service this year. It’s another delay for the ferry authority that hoped to offer connections to Wrangell, Petersburg and Ketchikan. The North End Ferry Authority is hoping for additional federal loan money to refit an oil rig supply vessel it purchased last year.
For iFriendly audio, click here:
A year ago, the North End Ferry Authority purchased a 160-foot oil rig supply vessel, using about two million dollars of a three million dollar loan from the U.S. Department of Agriculture’s Rural Development Program. The Coffman Cove-based authority had hoped the remaining loan money would pay for converting the ship for passenger ferry service in southern Southeast. The authority’s manager Kent Miller said this month that overhaul work has not happened and he said he’s disappointed in the delay to the startup of service.
“I should think that potential customers are disappointed as well,” Miller said. “We do get calls and emails everyday from people who have seen our previous advertising, which as you know anticipated a 2013 start. Previously we thought we’d get it going even sooner than that.”
The North End Ferry Authority purchased this oil-rig supply vessel for around $2 million in March of 2012. (file photo courtesy of NEFA)
The ferry was supposed to be up and running in 2012 but was delayed until this year and will be delayed again due to a shortfall in funding for the overhaul work. The lowest bid for refit came in at $1.8 million, nearly twice the anticipated cost. So the authority has applied for an additional federal loan of $1.7 million. Miller said the federal agency has asked the independent ferry authority to reduce its latest loan application and they hope to secure the needed money in time for next year.
“We should have ample time to start up in March or April of 2014,” he said. “It does remain to be seen whether the budget cuts and additional information we provide USDA will be satisfactory first and second whether they’ll have additional loan that we’ve applied for.”
The vessel purchased by the authority has been renamed the Rainforest Islander and is docked in Patterson, Louisiana. The authority wants to offer four-day-a-week service between Coffman Cove, Wrangell and South Mitkof Island near Petersburg, and a three-day a week connection to Ketchikan. It’s one of two port authorities formed in the region to improve transportation to Prince of Wales Island. The Hollis-based Inter-Island Ferry Authority used to offer the service between Coffman Cove, Wrangell and South Mitkof but discontinued it in 2009 due to low ridership.
Miller acknowledged uncertainty with future federal financing in light of federal budget cuts. He said the new ferry service still makes financial sense, despite the increase in the cost of the vessel. The total USDA loan could be around four and a half million dollars and the authority will have to show it can repay the loan.
“The amount of debt will go up and so our challenge right now is to demonstrate to the lender that we can provide decent debt service coverage for that additional money,” Miller said. “We thought we had accomplished this last fall, that the results were acceptable but as it turns out they need more information. So we’re furnishing that now.”
If the North End authority is able to secure that additional loan money this year the new ferry could startup in the spring of 2014.
