Nova Star Cruises says province still owes it $2M

The operators of the Nova Star ferry say they arestruggling to pay theiroutstanding bills because the province owes them$2 million, but the province says it has already paid its obligations.

In a news release issued Monday, the company saidthat when the province originally signed a contract with the ferry operator in November 2013, $2 million was to be set aside to cover a surety bond required by U.S. authorities to ensure there would be enough money to cover ticket refunds.

Nova Star operators later set up an escrow account to replace the surety bond. The company says the province did not then give it the $2 million.

Transportation Minister Geoff MacLellan says the $2 million was put into the province's general revenues and it has no obligation to hand it over to Nova Star Cruises.

"There was always the understanding that this bond would be returned to the province," he said.

MacLellansaid the contract clearly stipulated this, and he says he had many conversations withcompany officials about it.

$39.5Min funding over 2 years

The company says the$2 million has caused financial hardship for the company.

"If we had received the full $21 million that the Province has repeatedly said in public statements that it provided to Nova Star Cruises, we would have avoided the liens that have been placed on the ship, and most of the creditors would already have been paid," Nova Star Cruises president and CEO Mark Amundsen saidin a statement.

Until today, it was understood the province provided $41.5 millionto Nova Star officials over two years,$28.5 million in year one and $13 million in year two.

However, the return of the $2 million bondmeans the province gave Nova Star Cruises slightly less:$39.5 million over two years.

The company says it owesabout $200,000 to vendors and suppliers in Nova Scotia.

In its two years of operationthe ship had about 110,000 passengers, short of its two-year goal of 180,000.

About 51,000 people took the ferry this year.