Fast Ships gets two-year lease

Gosford Council has resolved to enter into a two-year lease with Fast Ships Limited for use of the Ettalong Foreshore for a ferry wharf and terminal.

The lease is subject to council and Fast Ships Limited entering into a Development Deed of Agreement.

The lease will have two 19-year options.

It will cost $12,000 annually, to be reviewed in two years.

The lease will allow the council to terminate the lease if work on the wharf and terminal buildings is not started within one year of the signing of the documents "or such longer period at the discretion of the council".

The infrastructure was to be completed within two years of the signing of the documents, or again at such longer period at the discretion of the council.

Fast Ships Ltd must also make satisfactory arrangements to secure a vessel and berthing facilities at Circular Quay or other suitable Sydney Harbour sites within two years.

The company must show a business plan, which provides for the fast ferry to commence operations within two years.

Fast Ships representative Mr Matthew Wales told Gosford Council at its September 27 meeting that the only surety the company could give was that if the lease was not signed "the service may not actually proceed as this was a condition of consent as given by council".

He said the company was now in a position to seek a suitable ferry that was coming up for auction in Japan later this year.

Mr Wales said that the company had been in ongoing discussion with NSW Maritime for berthing rights in Circular Quay and King St wharf."

Peninsula Dunecare representative Ms Margaret Lund spoke at the meeting against the leasing of the foreshore.

"You must have a financially viable plan available before you sign anything, particularly a lease," Ms Lund said.

"Until now this firm has had no boat, no berthing rights, and no financial backer.

"It's unviable, why is council pursuing it?

"You are going to end up with this large infrastructure not being used.

"The public is going to lose a lot of its public land.

"Why not wait for the Ettalong Foreshore Plan? Why not wait for Sepp 71 (Coastal Policy)?"

"Please council, be a responsible council and, if perhaps you have to, give an option but do not give a lease."

Cr Terri Latella also spoke against the proposal, stating that Fast Ships Limited had been "given ample time to look at those basic issues, a ferry and berthing rights.

"Council entering any documents at this stage, under the guise that if we don't do so we may lose a fast ferry, looks almost to me like duress," Cr Latella said.

"Show me you have a ferry and that you have berthing rights and then we may consider it."

Cr Latella said that signing the documents showed Fast Ships Limited some kind of exclusivity as a proponent, as council's general manager Mr Peter Wilson had stated that there had been other proponents with other options for Ettalong when the tender for a Fast Ferry service was first advertised.

Cr Craig Doyle said: "They have struggled to convince that they have financially viability to the state government.

"That's $4.3 m that's already slipped through their fingers.

"They have really struggled to convince us in relation to the boat ownership.

"And then there was waterways, do they have berthing rights in Sydney or not?

"If at the end of those two years, where do we stand if nothing has happened in recovery of costs, and in relation to the bond?"

Council's legal officer stated that "there is provision that the company pay $22,000 upfront".

"If they fail the money deposited with council is lost, plus $100,000," the officer said.

Cr Trevor Drake spoke in favour of the proposal.

"It seems that this Fast Ships company has not had the easiest of times.

"There's problems with providing information to council confirming that they have certain viability," Cr Drake said.

"At the end of the day, they have come up with a proposal.

"If they do make a success of it, and achieve the result that they want, then the community has a ferry service at Ettalong, which the community said is something they want.

"I believe that this is the last opportunity the council has to establish a ferry at Ettalong.

"If they can't make it run they are going to lose $600,000 plus to council."

The $600,000 included $100,000 for the land and $500,000 to council as security, which would be used to either complete or demolish the project if the company failed.

"I'd like to see the wharf properly completed and a ferry system to Sydney established," Cr Drake said.

"I think they should be given this last opportunity."

Cr Holstein said he had always supported the fast ferry, but said his "concern is making sure we are not heading down a path".

"When the reports came out, and the aspects of something that is totally different which would possibly adjoin the development, then the lights went on in my eyes, that I want to be damn sure," Cr Holstein said.

"I'm satisfied that there are sufficient conditions within that lease.

"If the boat isn't there, then there'll be no construction, and no ferry, it's gone, it's history.

A staff report to council stated that if council granted a lease that included a requirement that Fast Ships do certain things, including building of the infrastructure, and Fast Ships had satisfied those requirements, council must grant a further lease if Fast Ships request it.

The report stated that "for security reasons it would be appropriate that at certain times the public not have access to the facility, such as when the facility is closed following the arrival of the last ferry at night and the departure of the first ferry the following morning."

It further stated that "as the lessee will be responsible for the construction of the infrastructure, it is only reasonable that should other operators seek to use the facility, they should pay a reasonable fee to Fast Ships Limited for the use of the facility provided by that company."

In relation to the question of asset ownership of ferry terminal and facilities should the Fast Ships venture fail several possibilities were in place, according to the report.

It stated that the first option would be that the facility could be taken over by a new operator under the same conditions as the arrangements with Fast Ships Limited.

It also stated that "this could be achieved by a change of administration of Fast Ships Limited, the sale of the company and its assets or the sale of its assets thus effecting a transfer of lease and sub-lease."

The other option, according to the report, was that council could take possession of the land and infrastructure reverting it to a council facility.

Council could then arrange for the lease of the site to another operator or manage the facility and allow other operators access to the ferry facilities.

Fast Ships has lodged an application for a Construction Certificate that was being held pending the decision of council to enter the lease.

Crs Terri Latella and Vicki Scott voted against the motion.

Council agenda COR.28, September 27