Costs Could Double To Retrofit Steamship's Three New Vessels

The Steamship Authority has discovered the cost of retrofitting its three new vessels may be more than double its initial estimates, a development which could push back the start date for the freight boats on the Nantucket and Martha’s Vineyard routes to 2024.

Bob Davis, the general manager of the Steamship Authority, disclosed Tuesday that the low bid for the retrofitting project just came back at more than double what the boat line had anticipated. While the Steamship projected a $9 million to $10 million price tag per boat, the low bid came in at roughly $20 million per vessel. While the Steamship Authority had originally hoped to have the new vessels plying the island routes by this spring or summer, the new development could push back that timeline to 2024, Davis said, as the boat line works with the low bidder to bring down the costs.

“We had significantly higher bids received versus the initial cost estimates,” Davis told the Steamship Authority Port Council Tuesday morning. “Bids came in close to $20 million per vessel, and we’d been looking at somewhere in the $9 million range. Prior to the bid opening, we had conversations with various naval architects and ferry operators. They reported to us they’ve seen a 40 percent to 50 percent increase in bids for projects. So we expected maybe 40 percent. We were not expecting 100 percent.”

The Steamship received two bids for the retrofitting project, and Alabama Shipyard LLC, of Mobile, AL, was the low bidder at $39.9 million. The other bid was submitted by Bollinger Amelia Operations LLC, of Amelia, LA, for $62.5 million.

Davis said the Steamship Authority staff is currently reviewing the scope of work for the retrofitting project and elements of the bid package to find ways to bring down the costs. One strategy, he said, would be to move back the completion date into 2024, rather than pushing for the vessels to be ready at some point during 2023.

“The timeline we had included in the package is a very aggressive timeline to get the work done, and it appears they (the low bidder) built in overtime to accomplish that,” Davis said. “We’re looking at our operating schedule and there’s no reason we can’t extend that delivery time on those vessels. We’re expecting to get them some time in the fall, and it’s the time of year we don’t necessarily need to be putting them into service. So by spring of 2024, we should be in good shape.”

The three vessels acquired by the Steamship Authority in 2022 to replace its aging fleet of freight boats are all offshore supply vessels (OSVs) previously used in the Gulf Coast’s offshore oil and gas industry.

After a naming contest sponsored by the Authority, the vessels were renamed the M/V Aquinnah, the M/V Monomoy, and the M/V Barnstable. The boats are currently being stored in Louisiana, and the location of the retrofitting work will be determined by the successful bidder. The work will include the shortening of the vessels, adapting the stern to fit the Steamship Authority’s transfer bridges, and numerous other changes.

The Steamship Authority will be using federal funds for the retrofitting project that were made available through a memorandum of understanding with the Cape Cod Regional Transit Authority.

Once the project is completed, the three vessels will replace the Steamship Authority’s freight boats the M/V Gay Head, M/V Katama, and M/V Sankaty.

Nat Lowell, who represents Nantucket on the Steamship Authority’s Port Council, said he did not believe a delay should be considered bad news for the boat line. Additional time could net the Authority a larger windfall from the resale of the old freight boats, and give the Steamship’s captains more time to get used to the new vessels ahead of the busy summer season.

“This delay could have some silver linings with marketing the current vessels we’re going to sell, as well as decisions that may benefit the Authority as well with those vessels,” Lowell said. “We’ve got to back up the bus and reimagine all this. This is like getting a new boat built, or three. It’s going to take time. We’re coming out of Covid and there’s the supply chain stuff, plus we’ve never done it (acquisition and retrofitting) down south. The opportunity is so good to do this, I don't care if it takes two more years.”

Both Lowell and Davis said the new freight vessels, once retrofitted for the Steamship, will allow for additional capacity that was previously unavailable.

“We’re working on changing the way we schedule mixed loads with the freight boat on this route so that we can get more cars booked on these odd trips: the Saturday morning at 8:30 a.m., the 4:30 boats leaving Hyannis that have heavy trucks,” Lowell said. “This is going to be good. We are going to be able to really make the Nantucket route efficient without adding service. These are those dumb things behind the scenes that make a difference.”