TT Line in debt for decades

TASMANIA’s government-backed lender TASCORP does not expect Bass Strait ferry operator TT Line’s debt to be cleared until 2052.

Appearing before the Parliamentary Public Accounts Committee in Hobart earlier this week, TASCORP chairman Gary Swain and CEO Heath Barker told members TT Line — also government-owned — would not see debt levels drop below $1 billion before FY 2030, and there’d be “no meaningful reduction” until the early 2040s.

Earlier this year the Tasmanian Government announced TT Line would receive a $506 million bailout, with $200 million of that included in the 2026–27 budget. At the same time TT-Line's borrowing limit was also increased by $400 million to $1.4 billion.

Mr Swain told committee chair Ruth Forrest, who asked whether TT Line was likely to be able to continue to operate under such a debt burden, that although the company was likely to be “constrained in what they can do from a capital perspective” it was highly unlikely any government would allow a failure.

“The reason that the business is in public ownership in the first place is it's a service that's required by the community,” he said.

Mr Swain said TASCORP was confident TT-Line would be able to pay the debts it owed, when due.

“Yes … within the context of the government guarantee, because if we didn't believe that, we wouldn't have lent them the money,” he said.

Nevertheless, TASCORP would continue to monitor TT Line’s financial position closely, and is awaiting a full company audit and updated forecasts from the Board before defining the long-term picture. In particular TASCORP was awaiting what it understood to be possibly substantial write-downs.

“The level of risk and uncertainty is removing or reducing, because the vessels will be in operation and the berths will be complete,” Mr Baker said.

"We don't want to conclude our assessment about the long-term sustainability of TT-Line until we've got the most recent up-to-date financial forecast."

Last week TT Line announced it was removing the 15% fuel surcharge on passenger and vehicle bookings for the Spirits, introduced on 31 March in response to the Middle East conflict, which was significantly impacting global fuel prices and had remained under regular review since.

The original aim was to fully recover the additional fuel costs associated with passenger and passenger vehicle movements and during the five months the surcharge was in place, it recovered a portion of TT-Line’s additional fuel costs — but the unrecovered shortfall exceeding $2 million.

TT-Line CEO Chris Carbone said the fuel surcharge was always temporary.

“Removing the surcharge before fully recovering additional costs is in the best interest of the Tasmanian visitor economy. We will continue to monitor the situation closely," he said.

“The long-standing fuel-related freight pricing remains in place.”