State’s efforts to privatize hit snag
Algiers — State officials are searching for answers after a push to privatize several New Orleans area ferries received no takers from the business community earlier this week.
Companies interested in taking over the management of the Algiers, Gretna and Chalmette ferries were supposed to present their proposals to the state by Tuesday. But that deadline passed with zero responses, according to Bambi Hall, a spokeswoman for the Louisiana Department of Transportation and Development.
The lack of responses was somewhat surprising since several companies attended an information session in August discussing ferry privatization, said State Rep. Jeff Arnold, who represents Algiers. Arnold said the state is sending out surveys to those companies to try to determine why they did not submit a proposal, and discover what sort of tweaks need to be made to the request to get more responses. Arnold noted that the entire process is fairly new for the DOTD, and it’s possible that the state’s request contained some onerous provisions or omitted some crucial ones.
“This really is a different animal for DOTD,” said Arnold, who added that there may be questions about the size of the state’s subsidy, ferry routes or allowable fares. “I think there are answers out there to some of the questions, but we need to find out if the privatization is still viable.”
The state’s request asked for companies to provide detailed plans on their proposed level of service, past experience and plans for using public funds, among other items.
Hall said the state remains committed to operating the Chalmette to Algiers ferry itself since it has about $4 million in dedicated funding. The state is actively searching for companies interested in the other ferries. The state initially hoped to have a cooperative endeavor agreement in place for ferry operation by the end of January.
Fay Faron, the president of Friends of the Ferry, said that she’s not surprised that the state’s initial request flopped because there were always questions about whether private companies would be interested in operating the ferries.
The state has spent between $8 million and $11 million on the ferries annually, and most of that was supported, controversially, by the tolls on the Crescent City Connection. Now that toll revenue will no longer be available after December, the ferries must become self-sufficient despite only generating between $200,000 and $300,000 from fares, according to a report from the Bureau of Governmental Research.
Faron said it’s a foregone conclusion that the state will have to provide a subsidy to whatever company assumes control of the boats and that users will see higher fares. But, it remains to be seen how large of a subsidy is needed, and how much fares will increase. Pedestrians currently ride the ferry for free. Faron was certain that privatization will eventually happen because residents are adamant that the ferries continue in some form.
“It has to be affordable so that everybody now who depends on the ferry can continue to depend on the ferry,” said Faron, who added that it might take creative solutions like opening a restaurant at the Algiers terminal or allowing the ferries to be used for Mississippi River cruises.
“(DOTD) only thinks in terms of building roads, and they don’t know how to handle ferries … Nobody is going to let this go,” she said.
According to the state’s request for proposals, a private company could receive up to $4 million annually from the state for ferry operations and maintenance and a $3 million one-time payment to upgrade existing terminals.
There also would be about $16 million for the purchase of new ferries or upgrades to existing ferries. However the availability of some of those funds would depend on state and federal finances, the request noted.
Arnold expressed confidence that private companies could be enticed to participate. More importantly, given the ferries’ importance in transporting service industry workers, the state has serious economic incentives to get a deal done.
The ferries transport millions of residents annually, and they are part of a push to connect the region through bike and walking trails, Arnold said. The ferries will not be allowed to disappear, although some, like the Gretna ferry, might see service reduced, he said.
“It’s a vital transportation link to the city of New Orleans,” Arnold said. “The state realizes the importance of having that transportation link in place.”
The ferries actually pre-date the Crescent City Connection, which was finished in 1958. There are active terminals at Algiers Point, Canal Street and Gretna, with an inactive terminal at Jackson Avenue. The state operates six ferries and seven barges.