Private operation of New Orleans area ferries is projected to save the state $1.7 million annually and improve services to customers, a state Department of Transportation and Development official said Wednesday.
DOTD Assistant to the Secretary Kevin Reed advised the state Civil Service Commission of the savings associated with the contract with Veolia Transportation as he sought and won approval of the outsourcing of a traditional government service.
Veolia is working under contract with the Regional Transit Authority, which has a cooperative endeavor agreement with DOTD.
The commission must judge whether the privatization is being implemented for “economy and efficiency” rather than for political purposes.
Approval is required before state employees are laid off. Forty-one state employee jobs are being eliminated with the change.
Veolia began operating the Gretna-Canal Street, Algiers Point-Canal Street and Lower Algiers-Chalmette ferries Feb. 23.
State Civil Service Director Shannon Templet said that as of Wednesday the ferry employees continued on the state payroll pending a transition period.
Reed said it has cost the state $7.2 million annually to operate the ferries. It will now cost $5.5 million in subsidies for a savings of $1.7 million
The reduced expense comes from consolidations and changes in the ferry rate structure generating additional revenues, he said.
“RTA and Veolia continue to offer employment to all active employees at the same rate of pay and receiving a comparable benefits package,” Reed said.
Reed said Veolia is a natural fit to take over the ferry operations because it already handles other transportation services in the area, including buses and streetcars. “They are better equipped to integrate transportation services,” he said.
Civil Service approved the ferry operations privatization on a 4-0 vote. Three commission members were absent.