Re: Barges

I have been given a proposed chartering agreement by Boynes for review. Some food for thought, sorry for the length:

• Proposed Boynes Transaction
• Term: 2 years
• Vessels Covered:
• Primary: LCM 8 (one to two truck capacity)
• Secondary: General II (four truck capacity)
• Cost:
• We pay $55,000 for repairs to LCM 8 in Puerto Rico ; this amount will be set off against the usage at the hourly rates below so that there will be no charge for the first $55,000 of use at these rates
• Hourly Rates for the term of the agreement, which are discounted, as follows:
• LCM 8: $175 an hour (market is $200 an hour; Rampino rate is $190 an hour)
• General II: $300 an hour (market is $375 an hour)
• All rates apply only for time spent on trips between Red Hook and LSJ
• 3 hour minimum applies to each charter
• We can piggy back on to the slot which Boynes has at Red Hook for our own barge to avoid having this use restricted on a “will call” basis
• Advantages
• The General II will be made available immediately during the repairs of the LCM 8 thus giving LSJ the ability to make up for the time lost due to the current delivery problems with the barges
• The General II can dock directly at Tropical for the same rates and pick up goods right off the ship
• Overall transportation costs and time will be reduced significantly: example: assume that the purchase of materials from Bovoni quarry for delivery to LSJ from Red Hook:
• Rampino cost to transport one truck from Red Hook to LSJ: $798 (Rampino charges for time from Crown Bay to Red Hook and back); 6 truck trip day = $1938 total
• Boyson LM 8 (which charges only for time expended between Red Hook Dock and LSJ) : one trip: $210; 6 truck trip day = $1260 total
• Boyson General II: 3 hour minimum (3x$300) for at least 8, but possibly 12 trucks in half a day = $900 total
• We can easily manage the use of our barge in tandem with Boynes from our location in Red Hook
• Most of the barging trips both for construction and island needs can be more effectively serviced from Red Hook
• Compass Point lot can be used as a staging area for construction materials
• Island needs for trash services and materials are best served from Red Hook which is only an 11 minute trip from Bovoni dump and the quarry; Home Depot and Tutu are much closer to Red Hook than the Frenchtown Ramp; MSI will deliver materials in their own trucks to LSJ via Red Hook
• Disadvantages
• Probable loss of services of Rampino who would then be left with limited opportunity to provide service directly from Crown Bay to LSJ
• Island use will have to be given a priority over construction use for the LSJ barge in Red Hook
• LSJ will have to expend the time to send this barge down to Charlotte Amalie from Red Hook for those deliveries which must be made directly to LSJ from that location
• Steve Rampino had offered to bunker the LSJ barge in the lagoon at Water Island in the event of a storm and this safe haven may no longer be available so LSJ will have to find one

• Problems and Issues:
• Are we shooting ourselves in the foot if we lose Steve?
• Currently he makes an average of 4 trips a week
• These trips are devoted to:
• Trash
• Containers of Island Needed Items
• Fuel Deliveries
• Transport of Vendors such as E.D. Plumbing
• Equipment used domestically
• Specialty Items
• Steve is also responsible for the hauls from Tropical to the French Town Ramp and the hauls to and from the dump
• Using Red Hook lengthens and shortens these hauls depending on their nature: trash hauls are shorter, equipment hauls by land or sea are longer
• Lafayette will have personnel available during construction to provide these services
• Need to identify the equipment currently in Steve’s possession which is owned by LSJ; we believe that it consists of a mule and at least 4 bins
• Need to appoint a representative to deal with Rampino immediately
• Need to be prepared to take over the fit up and delivery of the new barge from Florida
• In this connection Lafayette has sourced and has prices for the necessary parts and identified suitable sources of services to do the fit up

Lafayette Contractors LLC

6100 Red Hook Quarter, Suite A2-7

St. Thomas, VI 00802

Tel: 340 779-8054

Fax:340 779-8055

Cell:340 690-7194