The Nova Scotia town of Yarmouth has begun a $3 million upgrade of a dilapidated terminal in preparation for the town’s new ferry connection with Portland, which is scheduled to start on May 1.

On this side of the Gulf of Maine, it’s a different story altogether. Before authorizing any work on Portland’s passenger terminal – needed improvements could cost more than $1 million – state and city officials are holding off until they get more information about the ferry company’s operating plans.

“Before public money is spent, we all need to get to a point of comfort,” said Bill Needleman, Portland’s waterfront coordinator.

The city and state plan to share the expense, but that arrangement has yet to be worked out, and the city has not yet figured out the total upgrade cost, Needleman said. He indicated the delay does not yet threaten the planned launch of ferry service, saying there is still time for upgrades to be made.

“We are all working toward that goal of May 1,” he said.

The Portland terminal will need several upgrades to get it ready for the ferry. Jonathan Nass, a senior policy adviser for Gov. Paul LePage, said in November that the Ocean Gateway terminal would need a new gangway, expected to cost about $1 million. The gangway is used by passengers to board and disembark from the ferry.

The gangway that was used for the Cat, the high-speed vessel that operated out of Portland between 2006 and 2009, can’t be used for the new Nova Star ferry, said John Henshaw, executive director of the Maine Port Authority. Also, the boarding ramp for vehicles will need to be adjusted because unlike the Cat, the Nova Star carries its own ramps, one at each end of the vessel. Those ramps will drop down from the vessel and lie on top of the ramp at the Ocean Gateway terminal.

In addition, Portland officials will need to make accommodations for commercial trucks, which have never before used the terminal, and build a catwalk to the mooring dolphin for line handlers. Also, U.S. Customs and Border Protection may require some changes, according to Needleman.

Before it launches service, Nova Star Cruises, the start-up company behind the project, must complete a to-do list that includes winning approval from regulators on both sides of the Gulf of Maine, upgrading terminals in both ports, and negotiating the use of those terminals. It must provide detailed security and financial information to state and city officials, along with the ferry company’s needs for office and storage space, Henshaw said.

“We have received some, but not all, the information required,” Henshaw said. “They are responding to our questions, and oftentimes we are looking for additional details.”

Nova Star Cruises is in the process of getting the city and state all the information they need, said Dennis Bailey, a company spokesman.

The city and ferry operator must also reach agreement over lease terms for use of the Ocean Gateway terminal, including docking and other fees.

In its deal with the city, Cat operator Bay Ferries agreed to pay fees that amounted to about $100,000 a season.

Officials with the city, state and Nova Star cruises have been meeting regularly. A final draft lease will need to wait until Nova Star finalizes the specifics of its operational plans, and the lease will be subject to City Council approval, Needleman said.

Nova Star Cruises must also reach operational agreements with customs and border control officials in both nations.

In Nova Scotia, the ferry service is seen as a critical step for rescuing a troubled tourism industry. Its success or failure will affect the political fortunes of the provincial government, which is spending $21 million to subsidize the service over seven years. The federal government in Canada is also funding 90 percent of the cost of upgrading the Yarmouth terminal.

Because the ferry service is a public-private partnership in Nova Scotia, officials there are more familiar with the people behind Nova Star Cruises and the planned operations, said Greg Shay, acting manager of the port of Yarmouth.

“We have a different situation here,” he said. “We are all kind of rolling in the same direction together.”

Built in 1956 to serve a ferry between Yarmouth and Bar Harbor, the Nova Scotia terminal needs nearly $13 million in repairs, according to a 2010 government study, but Yarmouth officials say that about $3 million in upgrades being made over the next four months will make it ready to accept passengers by May 1. The terminal has been empty since 2009, the last time a ferry operated between Yarmouth and Maine.

The Ocean Gateway passenger terminal in Portland, opened in 2008, is in much better condition. The Cat used the terminal for two years before canceling the 2010 season.

The Nova Star ferry is scheduled to depart for Maine from Singapore in mid-March. It will arrive in Portland about a month later, said Bailey of Nova Star.

Preparations were more advanced before Bay Ferries started its ferry service with the Cat in Portland in 2006. The city had begun negotiations in August 2005 and signed the agreement in October, said Jeff Monroe, who was the city’s port director at the time and has since worked as a consultant for two other ferry companies that considered operating service between Portland and Yarmouth.

He said it’s unrealistic to expect Nova Star Cruises, a start-up company with no experience operating a ferry service, to be ready by May.

“I think there are going to be delays,” he said.

If the ferry service gets off to a late start, he said, it can still be a successful venture. However, the late start would mean fewer days with paying customers and a greater reliance on the subsidy provided by Canadian taxpayers.

In November, the Nova Scotia government announced it had finally reached a deal with Nova Star Cruises for subsidizing the service. However, the province didn’t release its first payment – $2 million – until last month, after Quest Navigation Inc. of Eliot and Singapore Technologies Engineering Ltd. finalized their joint-venture agreement to operate the ferry service under the Nova Star name.

While starting a ferry service is complicated and challenging, Henshaw said, “we are all anxious to see this succeed. We are all working toward that end.”

Tom Bell can be contacted at 791-6369 or at:

tbell@pressherald.com