IT HAS emerged in the Tasmanian Parliament that the additional $80+ million TT Line has been obliged to pay for its new Bass Strait ro-paxes was matched by the Finnish Government in order to keep builder Rauma Marine Constructions afloat.
Finland has also provided guarantees it will underwrite the future financial viability of RMC, which has been hit hard by material and labour cost rises caused in large part by the Ukraine-Russia war.
It was revealed last week that TT Line had paid $81.6 million over and above the contract price of $850 million for the new Spirit of Tasmania IV and V, after the state government-owned company’s board concluded it had no realistic alternative.
“The board 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,” transport minister Eric Abetz told Parliament. “It is important to note that given the increase in materials, the vessels are now worth more.”
Tasmanian treasurer Michael Ferguson confirmed this week that he’d been made informally aware of RMC’s plight late last year and received a formal briefing from Treasury on 29 February, when the government was in caretaker mode ahead of the state election. However, it was not until 5 April that the government was officially notified of the additional payment – apparently well after the Finnish Government knew.
Parliament on Tuesday also heard that TT Line had simultaneously agreed to drop any late-delivery penalties for the ferries, delivery of which has already slipped twice and now expected in Q3 2024 and Q1 2025, although once they reach Tasmania there will still be considerable fit-out work to be completed under the requirement that a proportion of the contract value be undertaken by Tasmanian suppliers and contractors.
In a statement, TT-Line said: “The vessels are going to have an expected 30-year life on Bass Strait, so a delivery delay of this magnitude is not a major cause for concern.”
“For the obvious reasons it is important that the company does not rush any of this to ensure Tasmania has the best and most reliable ships we can to operate on Bass Strait between Devonport and Geelong.”
TT Line is also facing questions over whether its new East Devonport terminal will be ready in time for the new ships when they do arrive. While TasPorts’ part of the project is nearing completion TT Line has conceded it had been forced to call new tenders for on-shore infrastructure after “significant price increases” by the original preferred contractor.
