Plan Asks Full New Bedford Ferry Ties;

By JULIA WELLS

Gazette Senior Writer

Adding a new kink to the tangled business affairs of the Steamship
Authority, a private freight hauler submitted a license request this
week to run year-round ferry service between New Bedford and the two
Islands.

"We are confident that we can operate these routes
successfully at no cost to the Steamship Authority," wrote Craig
Johnson, who is the director of operations for Seabulk International
Inc., formerly known as Hvide Marine Inc.

The SSA paid Hvide Marine $1.6 million to run a pilot freight
program between New Bedford and the Vineyard last summer. The boat line
has contracted with Hvide to run the program again this summer for
roughly the same amount of money. The service cost the boat line more
than $1.2 million last season.

The new license request calls for launching the startup ferry
service after the completion of the pilot program this year. Seabulk
wants to run three trips a day to the Vineyard and two trips a day to
Nantucket from the State Pier in New Bedford.

Although the request is principally for carrying freight and pickup
trucks, Seabulk is also asking for the right to backhaul cars from the
two Islands to New Bedford on a standby basis, and for the right to
carry passengers and cars in both directions if the Steamship Authority
will not meet its conditional demands. The demands include the condition
that the boat line reduce its own freight traffic to 1997 levels and
force some 8,000 trucks to use the Seabulk service out of New Bedford.

Seabulk has not said what fares it will charge for the freight
service; it refuses to specify what boat it will use for the service,
and it has asked the SSA to waive a long list of public protection
measures in its own freight policy, including any oversight of schedules
and any rights to terminate the license. Seabulk also wants to use the
SSA docking facilities on the Islands for free.

The license application involves a series of marine holding
companies involved in freight transportation, including one based in
Delaware, one based in Florida, one based in California and one that has
not yet been formed.

Seabulk is a new Delaware company formed recently when Hvide Marine
was reorganized under its parent company, based in Fort Lauderdale, Fla.
But in the application, Mr. Johnson writes that Seabulk plans to join
with another company named Patriot Holdings, LLC. to create a new entity
named Seapat LLC. The new entity has not yet been formed. Patriot
Holdings is based in California. The application also states that the
Seabulk license request comes "in cooperation with the city of New
Bedford," although it is unclear what that means.

Mr. Johnson could not be reached for comment this week.

In the application letter, Mr. Johnson wrote that Seabulk expects to
run the service at a cost of $1.6 million per run. Projected financial
statements attached to the application estimate $1.9 million in gross
revenues for each run. If the service carried 8,000 trucks and took in
$3.8 million in gross revenues, the average fare for each truck would
have to be about $900 for round-trip passage. Round-trip fares for
trucks on SSA ferries are currently about $200 on the Vineyard route.

"We are confident that there is sufficient unmet demand for
water carriage between New Bedford and the Islands to justify the
investment of time and resources," Mr. Johnson wrote.

The license request raises the ante in the high-stakes political
game now surrounding the public boat line. The request is framed in
threatening language and in many places reads like a legal challenge to
the boat line licensing policy. Under the state statute that created the
SSA in 1960, the boat line has the power to license its competitors.

"If we can reach agreement with the Steamship Authority on
commercially reasonable and nondiscriminatory licensing terms, we are
willing to take a license on such terms and to avoid what may prove to
be unnecessary contentiousness," Mr. Johnson wrote.

"We dispute the validity of the Steamship Authority's
power to require a license for any water carriage between the mainland
and the Islands. . . . No rational carrier could agree to place the fate
of its business in the hands of its principal competitor," he also
wrote in the license application.

The license request comes in response to a recent ruling by a
federal judge in New Bedford's lawsuit against the public boat
line.

The complaint charges that the SSA violates interstate commerce laws
by restricting ferry service between the mainland and the two Islands.

Early this month, U.S. District Court Judge Douglas P. Woodlock gave
attorneys for the city of New Bedford two weeks come up with a private
carrier who wants a license to run ferry service - or face
possible dismissal of the lawsuit.

With its long list of conditions, caveats and requests for waivers,
there are serious questions about whether the Seabulk application
qualifies as a free-market ferry service proposal.

But under the court ruling, the SSA now has 30 days to act on the
application, and yesterday the boat line announced that it had already
set dates for public hearings on the Vineyard and on Nantucket. The
Vineyard hearing will be held on April 10 at 7:30 p.m. in the cafeteria
of the Oak Bluffs School. The Nantucket hearing will be held on April 12
at 7 p.m. at the Nantucket High School. Among other things, the boat
line policy for license requests calls for public hearings to be held in
each affected community. SSA general counsel Steven Sayers said
yesterday that a public hearing will be held in New Bedford, and likely
in Falmouth and Barnstable as well, although it is unclear why there
would be hearings in Falmouth and Barnstable when they are not affected
communities.

"We will now engage in going through the steps. It's
going to be complicated. I am sure that there are going to be additional
requests for information," said SSA general manager Armand Tiberio
this week.

"It's going to be a busy April, I'll say
that," declared Vineyard boat line governor J.B. Riggs Parker.

Both Mr. Parker and Mr. Tiberio said they expect the SSA board will need
to call a special meeting late in the month to vote on the license
request. The regular monthly meeting will be held on April 19. "I
doubt we can be ready by then," Mr. Tiberio said.