CONTACT: Dianne Dienstein June 11, 1997 CPUC - 68
415-703-2423 (A.95-12-071)

CPUC AUTHORIZES SALE OF RED & WHITE FERRY TO BLUE & GOLD

The California Public Utilities Commission (CPUC) today approved a settlement between the state Attorney General, Red & White Fleet, Blue & Gold Fleet, and Blue & Gold Fleet, L.P. to authorize Red & White Fleet, Inc. to sell most of its assets and operations for $20.5 million to Blue & Gold Fleet, which will in turn transfer them to Blue & Gold Fleet, L.P., and to make related transactions.

There will still be tour and ferry competition in San Francisco Bay for these reasons:

• One of the related transactions will be for Red & White Fleet to divest to Fisherman’s Wharf Bay Cruise Corporation, an independent third party, the name "R &W Fleet," trademark, colors, three vessels, Pier 43-1/2 at Fisherman’s Wharf, and its tour operations. As a tour operator, Fisherman’s Wharf Bay Cruise will not be regulated by the CPUC.

• Competing ferry operations bid for exclusive contracts with cities served to operate between a city and San Francisco.

• The Red & White Fleet currently provides service from Fisherman’s Wharf to Alcatraz under an exclusive 15-year contract with the National Park Service. However, that contract expires at the end of next year and the route then will be opened to competitive bid. The Alcatraz market is the largest and most lucrative ferry route on the Bay.

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CPUC AUTHORIZES SALE OF RED & WHITE FERRY TO BLUE & GOLD 2

Red & White Fleet is a wholly-owned subsidiary of Crowley Maritime Corporation, and operates 10 vessels providing ferry service between Tiburon and San Francisco, and Sausalito, Angel Island, and Alcatraz and San Francisco, as well as on-call water taxi and transportation of property, regulated and unregulated charter cruises, and unregulated sightseeing tours. During 1996, Red & White Fleet carried more than two million passengers.

Blue & Gold Fleet is owned by Pier 39 Limited Partnership. Its six vessels provide ferry service between Alameda and Jack London Square and San Francisco, and Vallejo, Angel Island and San Francisco. Blue & Gold also provides tour services. Blue & Gold carried 1.2 million passengers during 1996 and had assets of $4.2 million at the end of 1996. Blue & Gold L.P. is an affiliate of Blue & Gold Fleet.

In evaluating any settlement, the Commission must determine that it is reasonable in light of the whole record, consistent with law, and in the public interest. The Commission found the settlement met the first two criteria. To ensure that it is in the public interest, the Commission approved the settlement only on condition that Blue & Gold L.P. not raise rates for passenger ferry services to recover interest and depreciation costs associated with the excess of the purchase price of Red & White Fleet assets over their book value. Blue and Gold L.P. has agreed to this condition in writing. This condition does not apply to rates for ferry service to Alcatraz, however, the National Park Service has authority to prevent Blue & Gold L.P. from charging unreasonable rates for service to Alcatraz. o