Contract dispute ties up ferries

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ST. THOMAS - The brand new ferryboats delivered to the territory last year are still not operational because the ferry franchise companies and the government have not executed a management contract.

Three weeks ago, Public Works Commissioner Darryl Smalls said all paper work had been finalized and the only thing holding up the launch of the vessels was a Coast Guard inspection.

"We cannot schedule the final inspection until the contract is fully executed," said Transportation Services General Manager Kenrick Augustus.

Smalls did not return numerous phone calls last week.

The two ferries are 85-foot aluminum catamarans, each of which can carry about 250 passengers and are loaded with state-of-the-art features. The current ferries in operation belong to Varlack Ventures and Transportation Services, the companies franchised to run the St. Thomas to St. John ferry route.

However, the two new boats will belong to the V.I. government and be operated by the franchisees. At the end of January, Smalls said he expected the new vessels would be operational for the public by the end of February.

Augustus said it is a management contract, not a lease agreement, for the use of the ferries. He said the two franchise holders are not expected to pay to use the new boats.

He would not say what the sticking points are that are holding up the contract.

"It just hasn't been completed," Augustus said. "It has to satisfy local government, federal government, and us."

Augustus said he was confident that the contract would be executed soon.

"I think that's just around the corner," he said.

Despite the fact that the new ferryboats are state-of-the-art, Augustus said his own existing crew can operate them and he is confident the crews can pass Coast Guard inspection.

"I can speak only for Transportation Services. But we're satisfied that the vessels are good and we're ready to put them in service and as soon as the contract is executed, we're ready to go," Augustus said.

Delrise Varlack of Varlack Ventures did not return several calls for comment last week.

The vessels, named Red Hook I and Cruz Bay I, were delivered to the territory in November and were supposed to be in operation by the end of 2013.

Funded with $7.6 million in federal funds, the vessels were built by the Louisiana-based company Midship Marine Inc.

The funding for the boats - $3.25 million for each - comes from a number of federal sources. Two different earmarks from the U.S. Transportation Department coupled with a $3 million federal stimulus grant provided the money to purchase the boats.

- Contact Aldeth Lewin at 714-9111 or email

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