Wrangell Sentinel -

Ferry service between Ketchikan, Coffman Cove, Wrangell and South Mitkof Island may soon become a reality again after a $3 million USDA loan to the Northend Ferry Authority and Rainforest Island Ferry was approved last week.

Some of the communities to be served by the new endeavor, which is slated for May 2012, have not had access to regular routes since the Inter-Island Ferry Authority suspended their runs in 2008 due to low ridership and falling revenue.

Kent Miller, the manager of the NEFA, said obtaining the loan is the first step toward reinstating an inter-island ferry to the communities the project will serve.

“It’s an extremely important step in the right direction for the ferry,” Miller said. “It’s a loan with extremely favorable terms and will help us move forward.”

Those terms include an interest rate of 3.75 percent with a 30-year repayment schedule.

The loan will provide funding for the acquisition, overhaul and refit of a vessel slated to be purchased in the coming month by the authority, according to Miller.

“We expect to get a vessel optioned for purchase within the next 3-4 weeks,” Miller added.

The vessels under consideration include a larger ship, which can handle up to 14 full-size vehicles and a baggage trailer, while the smaller vessel would be able to carry 11 vehicles and a baggage trailer.

“Each one of them, whether the bigger or smaller one, is right around the same size and are vessels that can make our timetable speed of 18 knots,” Miller said.

Both vessels would also be capable of a top surface speed of 22 knots, Miller added.

The M/V Aaron McCall, a vessel which was previously available and under a purchase option with GE Capital as a financer, was sold after backing for the deal fell through and is no longer being considered by Miller.

Miller also said that the new ferry service would succeed financially where IFA failed in years past.

“Ridership was not the entire problem,” Miller said. “However, we’ve forecasted traffic and revenue levels with several different scenarios.”

According to Miller, a Juneau-based marketing firm, McDowell Group, has completed a study for NEFA and has extrapolated IFA traffic levels from the existing ferry’s 2007 operating year as the best scenario for the new system.

“In 2007, IFA received a grant to allow them to run into the fall of that year,” Miller said. “To everyone’s amazement, traffic held up nicely until November. What we will do is base our traffic estimate on what IFA did in 2007, but we hope to do better than that.”

Miller added that NEFA plans to ensure success by “improving marketability of the service and reducing the cost of providing service, compared with IFA’s service in 2006-2008.”

A number of other factors will aid NEFA in being financially viable, Miller said.

“The 2010 completion of reconstruction and paving of the North Prince of Wales Highway and the Coffman Cove Road shortens and greatly improves the drive between Coffman Cove and Craig and Klawock, Prince of Wales Island’s main population centers,” Miller said. “This and similar improvement of the Mitkof Highway will facilitate and reduce cost of highway access to the ferry, and will create newly enjoyable and marketable routes for combined ferry-highway travel.”

Miller also added that NEFA would operate mini-coach services on Prince of Wales and Mitkof Islands. Together with highway improvements, Miller said these services would make ferry travel by walk-on passengers easier.

Such service would also assist those who wish to travel with bicycles, kayaks, and canoes, but without cars.

“The NEFA timetable will also spread service throughout the week, where IFA’s former service concentrated only on weekends,” Miller added on the schedule that will be available to travelers. “Fares will be similar to, and in some cases lower than IFA’s previous fares.”

Miller said cost analysis and savings, in terms of wages and operating expenses, will add to the profitable nature of the venture.

“The vessel will operate with a crew of three, reducing crew cost by about 50 percent compared with five crew members,” Miller said. “The vessel’s fuel consumption will be 60 gallons per hour at 18 knots, compared with the M/V Prince of Wales’ 100 gallons per hour at 14 knots.”

According to Miller, NEFA has taken fuel price escalation since 2008 into account.

Shore costs will also be reduced, Miller said, in reservations and ticketing, which will be done by a two-person office staff in Coffman Cove only.

There will be no shore office staff in Wrangell, Petersburg, and Ketchikan, as were employed by IFA.