Smooth sailing for M/V Susitna sale, so far

Photo by Jay Galvin, accessed via Flickr Creative Commons.
Photo by Jay Galvin, accessed via Flickr Creative Commons.

The MV Susitna is one step closer to being sold. According to Matanuska Susitna Borough manager John Moosey, progress has been made on a deal to sell the vessel to the Phillipine Red Cross. The agreement with the Red Cross hinges on insurance company involvement, because three of the ferry’s four engines have been damaged by rainwater, rendering the ship inoperable.

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“We actually have a signed agreement with the Phillipine Red Cross. Just his morning they transferred the $250,000 so we can begin repairs on the three engines. What we are waiting however on, is to get an understanding on the level of repair from out insurance company and make sure the Phillipine Red Cross is agreeable to that.”

The agreement between the Borough and the Red Cross hinges on the Borough repairing the engine damage as a condition of sale.

Under the terms of the agreement, the Phillipine Red Cross will put down a deposit of a quarter million dollars, which will cover the Borough’s insurance deductible for the repairs to the ship’s engines. The International Red Cross will front the Borough 60 thousand dollars to cover costs to the Borough during repairs. Moosey says both these terms have been met.

“In addition they forwarded us the $60, 000 to cover some of the ongoing costs as we go through this process. We have a commitment, backed up by money, and that’s the first time in three years that that’s happened.”

If all goes as planned, the Red Cross will make a down payment of  $750,000, or half the purchase price, and upon completion of successful repairs, and on an export permit, the Red Cross will fund the remaining $750,000 purchase price.

Earlier this month, the Mat Su Borough Assembly approved sale of the vessel, after the Red Cross approached the Borough with an offer

The unused ferry, which has been stored in a Ketchikan shipyard for its entire life, has cost the Borough around $2 million in storage and insurance fees over the past three years.