12 June 2024

Spirit of Tasmania ongoing delays may lead to inquiry

| James Day
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New Spirit of Tasmania ship under construction in Finland.

One of the two new Spirit of Tasmania ships under construction in Finland. Photo: Spirit of Tasmania.

Tasmania’s Opposition has called for a parliamentary inquiry to investigate the ongoing delays around two new Spirit of Tasmania ships under construction in Finland.

The current two operational vessels were built in 1998 and the Tasmanian government decided in 2017 to construct replacements for the journey between Devonport and the Victorian port of Geelong.

In March the vessel’s operator TT-Line agreed to pay an additional $81 million to Rauma Marine Constructions (RMC). The Finnish shipbuilder has been experiencing financial constraints, partially due to an increase in the cost of materials.

In May the government of Finland committed to match this amount and underwrite the future financial viability of RMC. TT-Line agreed to the revised contract on the condition that RMC would not have to pay late fees.

Independent economist Saul Eslake estimated that every year the new vessels were delayed, the Tasmanian economy would forfeit $350 million and 6000 jobs.

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After these issues came to light, Tasmanian Labor leader Dean Winter said his party would move to establish a short parliamentary inquiry “to get to the bottom of the mess surrounding the delivery of the new Spirit of Tasmania vessels”.

“The Spirit’s replacement is the largest and most significant infrastructure project in the state’s history – yet as Labor uncovered in parliament, it’s being grossly mishandled by the Liberals,” said Mr Winter.

“Through questioning the government, Labor discovered that TT-Line handed over an extra $80 million to Finnish shipbuilder RMC for the vessels despite previously stating the contract was fixed-price. TT-Line also waived penalty payments for late delivery, leading to a further financial loss for Tasmania.

“If Labor didn’t ask questions, this critical information – which is absolutely in the public’s interest – would never have come to light.”

At the time, Transport Minister Eric Abetz told parliament that the board of TT-Line “considered this the only viable option, as the alternative was to potentially go back to market for a new ship build”.

“This would have cost more than we are now paying and resulted in a significant additional delay,” said Minister Abetz. “It is important to note that given the increase in materials, the vessels are now worth more.”

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Mr Winter said plenty of other questions remained for the potential inquiry, including:

  • How much will the ships actually cost the Tasmanian taxpayer?
  • When will they be in service?
  • What is going on with the Devonport Port upgrades, which are critical to the ships’ operation but have had the tender documents torn up?
  • What has happened to the promises of $100 million of local content, which includes a significant refuelling commitment?

Tasmanian Premier Jeremy Rockliff said it would be up to parliament to decide on an inquiry.

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