April 12, 2004
(Transportation and Works)
Minister announces Labrador Coastal Marine Service configuration
Transportation and Works Minister Tom Rideout today announced the configuration for marine passenger vehicle and freight transportation for the Labrador Coastal Marine Service.
The Labrador Coastal Marine Service configuration beginning in 2004 will be as follows:
"This decision will bring stability to the coastal marine service and provide certainty for residents and businesses dependant on it," said the minister. "Cartwright will see the same level of activity as last year and more than in previous years, established supplier relationships will be maintained (which was a concern expressed by central and western Labrador businesses) and the residents and businesses of the isolated north coast will be reliably and well served. Our objective is to put an end to the upheaval and confusion that afflicted the service in 2003, and make good, long-term, evidence-based decisions."
Memorial University’s Public Policy Research Centre (PPRC) was commissioned by government in November 2003 to bring objective research and analysis to bear on the service and its many issues. In preparing the report, the Public Policy Research Centre conducted engineering and economic analysis, as well as extensive stakeholder consultation.
The PPRC study concluded that the freight service from Lewisporte should be continued. The chosen service configuration meets government’s primary objective that transportation costs have a minimal impact on consumer prices on the north coast of Labrador. It also maintains the stability of supplier relationships between wholesalers and north coast stores. "After considering the report on Labrador Marine Transportation, my colleagues and I have chosen to adopt a modified version of Option 2. It is our view that this option offers the best balance of those factors and provides the most consistent and reliable service to the people who depend on it – which is, after all, why the service exists in the first place"
Further, this service arrangement provides choice for passengers with vehicles. "A person traveling between the island and central Labrador may now either cross the Straits and drive to Cartwright, experiencing the Labrador landscape and culture before boarding the Sir Robert Bond, or take the longer marine route from Lewisporte," said the minister. "During the researcher’s consultations, Labrador west and central Labrador requested that a Lewisporte option for passenger vehicles be reinstated as an important and convenient service."
Government expects that, while some passengers may opt for the Lewisporte route, there will continue to be strong demand for the Cartwright route, providing ongoing economic benefits for southern Labrador and the Straits.
The study also confirmed that the marine service tariff structure is outdated and needs revision. Government will fund a third-party rate review in 2004/05. In the interim, an increase of 10 per cent will apply to all freight and passenger vehicles, bringing the rates more in line with the real cost of the service. This increase will have minimal impact on the price of goods for north coast residents. For example, a consumer product that now costs $1.89 on the store shelf in Nain includes a shipping cost of eight cents; the new rate structure should increase the transportation cost of the product by less than one cent.
Minister Rideout said: "Government’s long-term vision for the Labrador marine service is to ensure convenient and cost-effective transportation for the north coast. We’ve taken the first step by establishing an efficient service configuration and a rate increase equal to that applied to island ferry services. The next step will be the tariff review, which will produce a fair and predictable rate structure for 2005 and beyond. As always when businesses and consumers are involved, market forces determine transportation options to northern Labrador."
The gross cost of this service configuration is estimated at $21.6 million; the net cost to government after revenue will be $16.4 million – approximately $600,000 more than last year. "Government considers that a good investment to achieve the greatest benefit for the greatest numbers of Newfoundlanders and Labradorians – especially those who most depend on the Labrador Coastal Marine Service," said Minister Rideout.
Government is also releasing the Public Policy Research Centre’s report on the Labrador Marine Service.
"While the report at times goes beyond the scope of work requested, today government is releasing it, as promised," said the minister. "We don’t agree with everything in the document, but we have paid close attention it – particularly the stakeholder input outlined in Chapter Two. We have been mindful that behind the math and the economic models, are the people of Labrador, particularly in its isolated coastal communities – the service exists for them."
Copies of the report can be obtained by calling the Department of Transportation and Works at (709) 729-1758. The detailed schedule for the Labrador coastal marine service will be made available online at www.gov.nl.ca/FerryServices/schedules.stm within the week, on confirmation of times with vessel operators.
Minister Tom Rideout's statement - Labrador Coastal Marine Service
Media contact: Deirdre Robinson Greene, Communications, (709) 729-0084 or 685-7578
2004 04 12 2:25 p.m.