Half-a-billion bail-out for TT Line

TT LINE owner the Tasmanian bovernment has come to the rescue of the beleaguered Spirit of Tasmania operator, revealing a $506 million equity injection will be included in the state budget, to be brought down next week.

The announcement this afternoon [15 May] was made by TT Line’s responsible ministers, Kerry Vincent, Minister for Infrastructure and Transport and Eric Abetz, Treasurer. The equity will be provided over four years, beginning with an immediate $200 million.

“The Tasmanian government is investing in this vital company to deliver the enabling infrastructure for our critical passenger and freight movements across Bass Strait,” the ministers said. “This equity is provided for past direct capital cost overruns.”

TT Line chairman Ken Kanofski disclosed earlier this week that the cost overrun on the two new ships Spirit of Tasmania IV and V now amounts to $773 million, compared to the original price.

He told the Tasmanian Parliament’s Public Accounts Committee in Hobart that doesn’t factor in the cost of storing the ships in  Scotland, Geelong and Melbourne, which has ranged between $600,000 and $900,000 per month per ship, nor the cost of running four vessels currently, with only two revenue-earning.

Minister Vincent said today the project was back on track.

“Any investment into TT-Line benefits the entire state,” Mr Vincent said.

“Tasmanians will see a $506 million equity injection into TT-Line in the upcoming 2026-27 Budget.

“This equity is not adding to the cost of the project. It is paying for past direct capital cost overruns, and is not TT-Line spending any additional money.

“We know these decisions come at a difficult time, and it’s no secret the capital cost overruns have put a strain on TT-Line.

“This is about ensuring our vital infrastructure and a key tourism and freight link is supported and continuing to function as Tasmanians need and deserve.”

Treasurer Eric Abetz said the Tasmanian Government would always deliver the services and infrastructure  needed now, and for the future.

“In the 2026-27 Budget we are providing TT-Line with the certainty it needs for its future,” the Treasurer said.

“TT-Line is a frontline service for Tasmanians and we are investing in it.

“We are doing this by providing TT-Line with equity to reduce its debt and maintain a manageable and sustainable fiscal position.”

The new vessels are not due to enter Geelong-Devonport service until the end of October, pending completion of TT Line’s much-delayed new East Devonport terminal. The ships remain laid up in Melbourne, while the exiting vessels, Spirit of Tasmania I and II are for sale but remain in daily operation.