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Firm’s hovercraft proposal scrutinized

Firm’s hovercraft proposal scrutinized

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Officials on both sides of Lake Ontario say issues such as the operator’s financial stability and port compatibility must be resolved before they agree to a proposal for hovercraft service between Rochester and Toronto.
Hover Transit Services-based in Bolton, Ontario, northwest of Toronto-was the lone respondent to a request for qualifications from the city of Rochester and the Toronto Port Authority.
Officials from the city of Rochester and the Toronto Port Authority will review the proposal over the next 30 to 45 days, they said.
“We’re in a holding pattern right now,” HTS president and CEO Dale Wilson said midweek. “They hold the go or no-go decision. If they want economic development and vibrancy brought back to the city, they’ll go ahead with the project.”
HTS proposes using two hovercraft-each 130 feet long and 78 feet wide, and weighing 195 tons-to transport passengers between Rochester and Toronto. A one-way trip would take 75 minutes, HTS states in the proposal.
“The next step for us would be to require them to present some information concerning their financial viability,” Rochester City Corporation Counsel Thomas Richards said midweek. “We need to know what financial backing they have and whether they’re financially credible. That would be the next step. Until that’s done, there’s really no way of making a judgment on whether this is credible or not.
“We could spend a whole lot of time on a lot of other details here, but if they don’t have the financial wherewithal, it isn’t going to make any difference.”
Other details include the environmental impact of the vessels on the shoreline, and whether the ports in Rochester and Toronto are equipped with the necessary docking facilities.
“There are going to be some issues for us in Toronto,” said Angus Armstrong, the port authority’s harbor master and chief of security. “They are extremely noisy. They lift on a cushion of air, and they are pushed by propellers, like an aircraft. These are very large, and they are noisy.
“Their ability to navigate is a question that we really have to look at. They have a tendency to slide. They float and they slip around, so they need a lot of room to maneuver.”
A hovercraft rides on air, under pressure continuously supplied by its lift system and directed into a chamber under the craft. It moves forward via a thrust propeller. The craft is steered with moveable rudders mounted by the propeller.
There are no brakes. A hovercraft stops by reducing engine power or turning 180 degrees and applying full thrust.
“The way that hovercraft empties is it goes right up onto a concrete pad,” Armstrong said. “It’s almost like it goes right up onto a beach. Neither of our facilities is designed like that.”
HTS wants to use two SR-N4 hovercraft manufactured 40 years ago by British Hovercraft Corp. The vessels can carry up to 55 cars and 600 passengers, at speeds as high as 90 miles per hour.
“I had contributed input suggesting that the ports be multimodal and accommodate a variety of services,” Wilson said of discussions prior to the construction of the existing terminals. “They went ahead and, on both sides of the lake, built port-specific docking systems for a Cat (fast ferry). Regardless of whether it’s a hovercraft or any other vessel, port changes are going to be necessary.”
The hovercraft, called the Princess Anne and the Princess Margaret, previously were used to cross the English Channel between England and France. They have been in dry dock at the Lee-on-the-Solent’s Hovercraft Museum near Southampton, England, since 2000 when the English Tunnel became the preferred route of crossing the channel, HTS officials said.

Financial plan

HTS proposes to buy the two hovercraft and restore one for immediate service, at a total cost of $10 million. That compares to a $42 million price tag for the Spirit of Ontario I, the fast-ferry service shut down two years ago by Rochester Mayor Robert Duffy.
“The bottom-line number is approximately $10 million to acquire both hovercraft, refurbish one and get it in operation over the lake and get the service up and running,” said Rochester attorney Alan Knauf, hired by HTS to serve as legal counsel.
“It’s obviously not a small amount of money, but it’s a relatively modest price compared to the cost involved with the ferry, mainly because it’s not brand new equipment.”
Some $7.5 million of the $10 million will be raised through a “combination of private funds,” the HTS proposal states. The balance will come from bank loans.
“There are a lot of people watching the project and, actually, a lot of people in Rochester and on this side of lake that want to see a cross-lake service go ahead,” Wilson said. “They have other interests that go beyond the hovercraft that go toward supporting their personal aspect of the project.”
The plan calls for some 75 percent of the operation’s revenues to come from ticket sales, with marketing and special events contributing 25 percent. Additional revenues could come from the shipment of cargo, food and beverage sales, and possibly from commuter service near the Toronto port.
“It would probably be an early-morning run from either Oshawa or Hamilton, or both, if we have two craft,” Knauf said. “We would run commuters into Toronto, then fly back and forth across the lake twice, then take commuters home.”
Rochester-to-Toronto hovercraft service is very viable, Knauf said.
“The ferry had pretty decent ridership numbers,” Knauf said. “The problem was that it was poorly managed. I took it in August both years (in 2004 and 2005), and the boat was sold out.”
Ferry operator Canadian American Transportation Systems LLC did not deliver on promises to incorporate freight trailers into their revenue streams and was further burdened by expensive pilotage fees because the ferry was registered in the Bahamas, Knauf said.
“It seemed like they didn’t pay any attention to the bottom line,” he said.
The hovercraft likely would be registered in Canada, Knauf said.
“They’re buying used equipment,” he said of HTS, “so it’s relatively inexpensive. It’s going to cost a lot to refurbish with new propellers and engines, and new seats and all that stuff. But it’s proven technology. These crafts ran for 30 years over the English Channel and carried millions of people.
“Maybe the biggest thing is, it is fast. The ferry was slow. It was a misnomer to call it a fast ferry. It was the slow ferry.”
Wilson offered no specifics on the finan-cial backing for HTS.
“We need a big, long look at it,” the Toronto Port Authority’s Armstrong said. “Rochester and Toronto are in a position where that’s what they’re going to do. They want to see concrete pieces of information on noise, on any pollution issues, on navigation issues, on how we have to retrofit the two existing terminals and what we can do with that.”
The HTS proposal calls for year-round service, including a modified winter schedule, between the two cities beginning in 2009. The average fare would be $30, with ticket offices in both the Rochester and Toronto ferry terminals.
“We do think that today Canadians would be much more attracted to the United States than even a couple of years ago because of the strength of Canadian currency,” Knauf said.
“We think people would come here to buy things here at the outlets and the malls, and go to the wineries and come to the jazz festival. Rochester would be a pretty modest price compared to Toronto, and be very accessible. There are 5.5 million people in the Greater Toronto area. If we could just get a fraction of those people into Rochester, it would be great for us.”
The hovercraft would be equipped with reclining chairs, optional business class service and WiFi capability, the proposal states. Food and beverage service would be available.

Faster trip

The 75-minute travel time is 90 minutes less than what it took the failed ferry to cover the 88-mile trip.
“I’ve driven to Toronto in the same time that it took me to take the ferry, and for much less money,” Knauf said.
The hovercraft would use 70 percent less fuel than the ferry, the HTS proposal states, and will create no wake nor cause shoreline or property damage to lakefront properties.
“My personal opinion, from what I know of them, is they are hard on fuel,” Armstrong countered. “They are not a particularly fuel-efficient means of transport. That has much more impact nowadays than it used to have.”
HTS, founded by Wilson in 2002, has approached Rochester at least once before about service to Toronto, but without success. It also has lobbied Niagara County officials about starting service from Youngstown to Toronto and has expressed interest in service along Lake Erie to officials from the Toledo-Lucas County Port Authority in Ohio.
“The Toledo service was somewhat problematic because of the route, the distance and the pricing schedule,” Wilson said.
“Youngstown would offer a competitive landing site for people perhaps wanting to take in Niagara Falls, go to the wineries, in addition to sporting events in Buffalo.”
Knauf has talked to Rochester officials about the proposal, but does not have a feel for what they are thinking.
“They’re studying the proposal. Given that this is the only proposal, I have to believe they’re going to be interested in proceeding. If this were the first proposal, and there had never been a ferry service, it’d be different. But we have, on both sides, the infrastructure. That’s a huge expenditure that’s already there.”
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04/11/08 (C) Rochester Business Journal