1. POLITICAL COMMITMENT NOT KEPT
We were not successful in convincing Government to honour the pledge in their 2003 Blue Book to lower rates to the equivalent cost of road travel to be phased in over 5 years.

2.ROUNDING TO THE HIGHEST QUARTER NOT FAIR- 5% vs 9%
We were not successful in convincing Government to apply the rate rounding based on the NEAREST QUARTER versus the HIGHEST QUARTER. Thus some increases in 2005 are greater than the 5% approved by Cabinet. Example a vehicle/driver goes from $5.50 to $6.00 which is a 9% increase versus the 5% approved.

3.ADULT RATE UNCHANGED IN 2005
There was one small concession on the adult rate which was raised from $3.00 to $3.50 in 2004 or 17% versus the 10% approved. In 2005 the rate was left unchanged at $3.50 as the rate was raised in Year 1 by 17% which was greater than the approved increases of year 1 and year 2 combined.

Thus the rounding rule being applied is to round up to the highest quarter using the 2003 base rate and applying the increases to that base. Based on that principle the $5.00 car rate in 2003 has already been raised to $6.00 or 20% even though the first year increase was approved at 10 % and the second year increase was approved at 5% creating a 5% overcharge in 2005 on the vehicle/driver rate.

4. $50,000 EXTRA FARE REVENUE from Bell Island service.
Overall the increase will likely yield Government a further $50,000 in revenue on the Bell Island service in 2005 over that received in 2004.

5. IMPACT EXAMPLE:
A tourist coming to Bell Island with his spouse and 2 children will have to pay $14.50 for passage per trip in 2005 and the same would apply to a Bell Island family of 4 coming to the City for a visit. With a round trip distance of 10 km this works out to $1.45 per kilometre or triple the EQUIVALENT COST OF ROAD TRAVEL that was promised.