Nova Star owners invested no startup money, says Michel Samson
'Unfortunately, that is what was negotiated, prior to our arrival in government,' Samson says
Nova Scotia's economic development minister, Michel Samson, confirms the company that runs the Yarmouth ferry has not invested any startup money in the vessel's operations, despite the province handing over $21 million in less than a year.
Samson says the previous NDP government allowed this to happen.
"As part of the letter of offer that had been negotiated by the previous government, there’s not actually money put up front by the company," he says. "But once the $21 million has been spent, there’s a requirement on the company to invest $3 million, at that point."
Nova Scotia committed $21 million over seven years to the Nova Star ferry operations. The final instalment was given to STM Quest, an American company that owns the vessel, last month.
They were providing the vessel. It was a brand new vessel that has never been used.- Michel Samson
"Unfortunately, that is what was negotiated, prior to our arrival in government," Samson says.
Part of the $21 million Nova Scotia invested includes $7 million in unanticipated costs the province had to cover when other financial arrangements were delayed.
"First was the bond that was required of the U.S. government of $2 million and then, when the $5-million credit from the United States wasn't in place in time, we had to provide $5 million operating costs to them," Samson explains.
The minister says the state of Maine is still negotiating the $5-million line of credit, but it’s been bogged down in red tape.
When asked what the company has brought to the table, Samson says, the Nova Star.
"They were providing the vessel. It was a brand new vessel that has never been used."
Sean Lewis with NATIONAL Public Relations speaks on behalf of Nova Star Cruises and issued a statement Friday morning.
"Nova Star Cruises will not be doing an interview on this, as much of the financial details you are looking for are confidential," he says."I can tell you that Nova Star Cruises has invested millions of dollars to restart the Yarmouth-Portland ferry service. This includes, but is not limited to, the charter of Nova Star and major investments in modifications to the vessel."
"As you are aware, the Yarmouth-Portland route equity has diminished due to having no ferry service in place since 2009, and it will take years to win back travellers to Nova Scotia. Nova Star is now focused squarely on driving the passenger volumes and visitors to Nova Scotia for the remainder of this season and we are making important contacts to secure bookings for next year and beyond."