LOWER TOWNSHIP - The Delaware River & Bay Authority has finally found a buyer for a mothballed ferry boat but will sell it at a loss.

The MV Cape May, purchased by the DRBA's Cape May-Lewes Ferry operation for $14.5 million in 1985, and remodeled in 1998 for $20 million, was sold for just $750,000 to Dennis Township-based Northstar Marine Services.

Northstar owner Phil Risko said he plans to convert the vessel into an oceangoing barge that, among other things, can cater to the evolving offshore wind industry. The barge would not have motor power but would be towed to work sites.

"It will service the windmills to deliver parts and components. It's a huge platform, 320 feet long by 68 feet wide. There are no large barges like that anywhere in the region," Risko said.

The deal was concluded in May.

DRBA spokesman Jim Salmon said the sale price does not include at least $530,000 worth of equipment and parts salvaged from the vessel to be used on the other four ferries. The total value to the DRBA could increase to $1.65 million if the new owner decides not to retain the propeller shafts and the rudders, Salmon said.

That still sounds like a big loss compared with the $34.5 million invested, but Salmon said a professional marine appraisal of the vessel done last August valued it at only $1.6 million. The other factor is the vessel, which last operated in 2009, continues to cost money to maintain.

"It's also about cost avoidance. The longer we have it and have to maintain it, the more money you're putting into something you don't need," Salmon said.

The loss is not a tax deduction for the tax-exempt ferry service, which links the states of Delaware and New Jersey, but some are arguing the cheap sale makes more sense than keeping the vessel tied to a pier here at North Cape May ferry terminal.

"I guess they decided they better take what they can get and go from there. It's costing them money just to keep the vessel with insurance and maintenance. I'm sure they'd like to see more return, but under the circumstances it's probably the best thing they could do," said William Miller, a retired DRBA executive director who wrote a book about the Cape May-Lewes Ferry.

Salmon said the long-range plan is to go to smaller, faster ferry boats that use less fuel and make the crossing quicker. A decline in ferry traffic, from 5,676 crossings in 2006 to 4,754 in 2012, has eliminated the need to have five vessels.

Since its inception in 1964, the ferry service has run at a loss and has been subsidized by toll revenue at the DRBA's Delaware Memorial Bridge. The service ran at a $9.6 million deficit in 2012.

The MV Cape May had been idle for four years and a second large vessel in the fleet, the MV Twin Capes, has run at a reduced schedule in recent years. It is only used when a fourth boat is needed or one of the other three smaller vessels is out of service, Salmon said.

The MV Cape May had been for sale since 2007 and the MV Twin Capes, still operating, was put up for sale in 2010, although Salmon said, "We don't have any active bites on it."

A master plan by Hornblower Marine Services done in 2007 recommended more efficient vessels. Salmon said new vessels are likely to be "a totally different design," but he said a lot of things have to be worked out before any decisions are made.

The 17-mile crossing now takes about 70 minutes with ferries that go 14 to 15 knots. Vessels that travel at 18 to 20 knots could reduce that to about one hour. They would burn less diesel fuel, which remains one of the major expenses at the ferry service.

The larger vessels also mean running them at much less capacity during nonpeak times.

The MV Cape May and the MV Twin Capes underwent multimillion-dollar additions when former DRBA Executive Director Michael Harkins tried to change the ferry service from a mere transportation system to more of a tourist experience. Its return from a Virginia shipyard in 1998 after undergoing a $20 million renovation was heralded in a DRBA press release.

After Harkins left, it became obvious the vessels were too big and too expensive to maintain.

The MV Cape May and MV Twin Capes take 17 crew members to run, compared with 12 for the other three vessels. They burn 25 more gallons of diesel fuel per hour and have 20,000 square feet of surface to paint, compared with 12,000 square feet on the smaller vessels.

Risko said a barge 50-by-100 feet would cost $1.5 million. He plans to use local shipyards to cut off the decks, which would be scrapped. He said taking off the decks would reduce the draft from 7 feet to 5 feet, making it able to also service area bridges.

One attraction is the vessel already has U.S. Coast Guard and American Bureau of Shipping certifications. Risko said he is making arrangements to berth the ferry in the Maurice River area and have the work done by shipyards in that region. Salmon was happy to hear that as one of the DRBA's mandates is to promote economic development in the region.

Contact Richard Degener:

609-463-6711