THE COST of TT Line’s new Spirit ferries has risen and delivery of both vessels has been delayed, again.
Spirit of Tasmania IV and V, being built by Finland’s Rauma Marine Constructions, will now cost an extra $81.6 million (50 million euros) over the original $850 million agreed for the two Bass Strait ro-paxes.
And delivery of the first vessel to Tasmania will now not be before the third quarter of this year while the second has slipped to 1Q 2025. Both ships are expected to undergo around three months’ of local fit-out work before entering service.
The setbacks were revealed in the Tasmanian Parliament yesterday [15 May] by new Labor leader Dean Winter and were confirmed by premier Jeremey Rockliff.
TT Line originally signed for newbuilds with Germany’s FSG but was forced to start again when the builder suffered financial difficulties. A new contract for a new design was then agreed with RMC in 2021.
Mr Rockliff told Parliament the TT-Line board had earlier this year agreed to pay additional money for the new vessels and that the government was provided with the board’s final decision to approve the additional payment on 5 April.
“I want to make it clear, it was a decision for the board, not the ministers,” he said. “I’m further advised the alternative was to potentially go back to market for a new ship that would have cost more and resulted in a significant additional delay.”
Mr Winter later said the delay would devastate Tasmanian tourism operators ahead of a challenging winter season. “Respected, independent economist Saul Eslake has estimated that every year the new vessels are delayed there will be a cost to the Tasmanian economy of $350 million and 6000 jobs will not be created,” he said.
Labor also claimed that if the government hadn’t delayed signing on with RMC to investigate construction options in Australia during 2020, the new vessels would already be in Tasmania.
A TT-Line spokesman told local media said RMC had informed the state-owned company that it was experiencing severe difficulties in completing the two vessels due to several factors including material price increases, material availability and labour shortages.
“At the time, Treasury advised TT-Line that any decision to pay additional funds for the vessels was a commercial matter for the board under the existing contractual arrangements,” he said.
“As was announced last year, the initial delivery date of the vessels had been delayed by labour shortages caused by the after-effects of COVID at the shipyard and steel shortages created by the war in Ukraine that also impacted the workforce in Europe.”
The spokesman said there were important clauses in the contract regarding the performance of the vessels during sea trials that needed to be met before TT-Line would accept delivery of the vessels, The Advocate reported.
Tasmania’s new transport minister, former federal senator and minister Eric Abetz, later issued a media release saying Mr Winter’s predecessor Rebecca White and Labor were briefed on the Spirit of Tasmania project during caretaker mode pre-election and well aware of the circumstances. Labor was “all at sea” on the matter, Mr Abetz said.
