Final ferry deal in detail

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By Belle Hatfield
The VANGUARD
www.thevanguard.ca
 
The final deal signed by Singapore Technologies Marine Ltd (STM) and Quest Navigation Inc. with the province of Nova Scotia to establish a ferry service between Yarmouth and Portland, Maine is almost identical to the letter of offer released in Yarmouth by Graham Steele, former minister of economic development, on Sept. 5.

(See story here) The major changes involve the timing of when STM-Quest will be required to kick in its financial contribution and some of the language around salary deferrals for the company’s senior executives.

The province announced on Tuesday, Nov. 12 that it had signed off on the letter of offer outlining the operating agreement between the joint venture company, STM-Quest, that has formed to operate the service. Last week the final letter of offer was made available to the media. Click here to go to final letter of offer.

One of the amendments made to the letter was to clarify how and when ST Marine would provide its $3 million contribution to cover any operating losses. It would be made after the province’s $21 million loan has been exhausted. Under the agreement the province would provide $10.5 million for start up costs and then $1.5 million in each of the following seven years for a total of $21 million.

Both agreements require STM-Quest to "inject at least $3 million to cover operating losses", but in the final letter it is spelled out that the company’s injection of capital occurs only after “the province has advanced the full amount of the Forgivable Loan to [STM-Quest]." Further the province acknowledges that the $21 million may be used earlier than the seven-year timeframe of the agreement. And further, at that time, when STM-Quest must make its monetary contribution towards operating losses, the province will consider a cut in the leasing costs as equivalent to a cash contribution from the company.

There are terms and conditions that the company needs to meet to get the province’s financial assistance and earn forgiveness. Although the letter indicates that the province’s loan payments may be accelerated, any changes to that schedule would need to be approved by the province.

There is also language in the offer regarding salary and bonuses collected by senior officials of STM-Quest.

Changes were made to the original letter of offer, from Sept. 5, that add more detail to the section on the terms of the senior management salary deferral during the start-up phase and if there are operating losses. References to executive compensation have been taken out of the main letter of offer and are included in an appendix. 

Among the conditions, it stipulates that the four senior executives will receive 50 per cent of their salary, as identified in their proposal. The remaining 50 per cent is payable after the fact for any year in which the company operates without a loss and when payment of the deferred salary doesn’t place the company in a loss position.

There are many dates by which performance measures have to be met sprinkled throughout the letter of offer. Although they are contained in the original letter of offer, they have been redacted from the online versions. A spokesperson from the Department of Economic and Rural and Tourism Development said they are deemed to be commercially sensitive information and are subject to the Protection of Privacy Act.

 

Organizations: STM-Quest, Singapore Technologies Marine, Quest Navigation ST Marine Department of Economic and Rural

Geographic location: Yarmouth, Nova Scotia, Portland, Maine

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Recent comments

  • Sharon
    March 25, 2016 - 11:31

    I cannot see how the ferry schedule will help Yarmouth..The ferry will be docking at around 9:30 pm. So how are people going to shop and sight -see Yarmouth & the surrounding areas at these hours? Also checking into a hotel at this time of night,around 10:30 pm while others,like salespeople maybe sleeping. Years ago,when the Prince was docking in Yarmouth at 9am in the morning years it was perfect..people would check in between 9:30-10am..Left their rooms and went shopping,went on tours,dined...Then they would check out the next morning..I worked at the Grand for 28 years and this was the best schedule...people had time to sleep, plus enjoy the town and surrounding areas...How can they do this at night.Plus i do not believe in Portland not wanting our transport trucks, Digby ferry can only handle a small number of trucks,and when the nova star was running our truckers were using it regularly,as it was the right schedule for them,and Porland let them in then...So why the change??? Plus no Canadian workers..I would say this schedule is ok if Canadians were going to the US,but who can afford the exchange rate..That's why the schedule should be reversed, so the Americans can take advantage of the exchange rate,and spend money in our area..Kind of hard to spend money at night,when you have to get up & catch the ferry.I see where our Canadian Dollars going to help out the Americans, not Us..Especially Yarmouth. Some may drive to other parts of the province the next day,but Yarmouth merchants will be left with over-nighters.

  • Sharon
    March 25, 2016 - 11:31

    I cannot see how the ferry schedule will help Yarmouth..The ferry will be docking at around 9:30 pm. So how are people going to shop and sight -see Yarmouth & the surrounding areas at these hours? Also checking into a hotel at this time of night,around 10:30 pm while others,like salespeople maybe sleeping. Years ago,when the Prince was docking in Yarmouth at 9am in the morning years it was perfect..people would check in between 9:30-10am..Left their rooms and went shopping,went on tours,dined...Then they would check out the next morning..I worked at the Grand for 28 years and this was the best schedule...people had time to sleep, plus enjoy the town and surrounding areas...How can they do this at night.Plus i do not believe in Portland not wanting our transport trucks, Digby ferry can only handle a small number of trucks,and when the nova star was running our truckers were using it regularly,as it was the right schedule for them,and Porland let them in then...So why the change??? Plus no Canadian workers..I would say this schedule is ok if Canadians were going to the US,but who can afford the exchange rate..That's why the schedule should be reversed, so the Americans can take advantage of the exchange rate,and spend money in our area..Kind of hard to spend money at night,when you have to get up & catch the ferry.I see where our Canadian Dollars going to help out the Americans, not Us..Especially Yarmouth. Some may drive to other parts of the province the next day,but Yarmouth merchants will be left with over-nighters.