SSA Members Express Concern Over Troubled High Speed Ferry

By JULIA WELLS

After two years of breakdowns and mechanical problems on the
high-speed ferry Flying Cloud, the Steamship Authority chief executive
officer said last week that he had negotiated a nine-month extension on
the warranty for the ferry's engine.

"Although the relationship is frayed and strained, the company
continues to provide support," boat line CEO Fred C. Raskin told
board members at the monthly SSA meeting on Nantucket.

The high-speed passenger ferry operates between Nantucket and
Hyannis. Built two years ago at a cost of $8 million, the ferry has been
plagued by so many mechanical problems that it has alternately earned
the nicknames Black Cloud and Dying Cloud.

The latest breakdown came at the end of the busy July Fourth holiday
weekend, when the ferry was taken out of service after a cylinder head
failed.

The ferry is powered by Paxman 12VP-185 engines manufactured by a
German company. Mr. Raskin has been haggling with the company over
engine warranty issues since early summer. He told board members last
week that there has been some dispute about whether the problems stem
from the way the ferry is operated or whether they stem from workmanship
problems in the engine.

He said the nine-month extension will give the boat line time to
decide whether the engine needs replacement. If the boat must be
repowered, Mr. Raskin said boat line managers will consider using a
Detroit diesel engine. But he said the Detroit engine also is not tested
and, under any circumstances, repowering will be costly.

"It could cost $1 million to repower, so the best of all
worlds is to make these engines work," Mr. Raskin said.

In an incident earlier in the year the ferry lost power and ran into
the rocks in Nantucket harbor, damaging the T-foil. A new T-foil had to
be ordered from Tasmania.

At one point board members turned for advice to David Scudder, whose
family owns Hy-Line Cruises in Hyannis and also the Grey Lady II, a
private high-speed passenger ferry that operates the same route as the
Flying Cloud. The Scudders are in the process of building a third new
high-speed passenger ferry to replace the Grey Lady II. Mr. Scudder said
they plan to use Caterpillar engines in the new ferry.

Mr. Scudder said the high-speed ferries require much more
maintenance attention than conventional ferries: "It's like
a race car; the wear and tear on the engine is much greater and you
really have to pay attention to things."

Mr. Raskin agreed, warning the board that even new engines will not
erase all the mechanical problems in the Flying Cloud. "It will
get better, but you won't eliminate all the problems. It's
like a Jaguar - when it's running it's great, but it
spends a lot of time in the shop," he said.

In other business last week board members talked about moving
forward on a number of projects, including the critical need to update
the boat line's outdated web site and to develop a
"real-time" reservation system, where automobile
reservations are kept completely current through computer processing.

In the monthly financial report, Mr. Raskin said revenues continue
to be up, but expenses are also up due to high legal fees associated
with the lawsuit in federal court against the boat line by the city of
New Bedford.

Total operating income at the end of May was $6.3 million, while
total expenses were $5.65 million, leaving a net income gain of
$677,000, or about $43,000 ahead of budget for the month. Net income at
the boat line is about $1.8 million ahead of budget for the year. Legal
expenses now stand at $822,338 for the year, with $443,674 attributable
to the New Bedford lawsuit. The higher legal expenses were offset by
savings associated with the elimination of the New Bedford freight run,
Mr. Raskin said.

"I think it's going to be a good year," he said.