TT LINE has been forced to seek an increase in its borrowing limits to accommodate the blow-out in the anticipated cost of its new East Devonport Berth 3 terminal.
TT Line’s new chairman Ken Kanofski and Tony Farrell, chairman of Tascorp [Tasmanian Public Finance Corporation] booth confirmed in hearings by the Public Account Committee last week that an increase in the loan facility would be needed.
The new terminal – originally due to have been ready by August last year – was first costed at $90 million. But following the failure of that contract a new estimate of $375 million was posited, along with a new completion date of February 2027.
However, Mr Farrell told the PAC that following new advice from TT Line that costs for the project are being ‘refined’ Tascorp would need to act.
“Cost increases are expected, but cannot be quantified at this stage,” he said. “An increase in TT-Line’s borrowing limit will be required, encompassing the East Devonport development and additional operating expenditure over the now extended construction period.
“The current borrowing limit is anticipated by TT-Line to be sufficient until September 2025 at this point in time. Tascorp is still awaiting TT-Line’s updated financial projections and revised business plan to enable it to progress its borrowing review.”
Opposition finance spokesman Josh Willie asked if a government bail-out of TT Line would be necessary.
Mr Farrell said the question was difficult to answer at this point.
“There are a number of aspects that are obviously negatively impacting the TT-Line’s original business case, which Tascorp will need to consider,” he said.
“I don’t want to say that the business case won’t be still positive.
“TT-Line is a good business, it’s a profitable business in some ways, it runs a sort of an effective monopoly.
“But it might be that even with those factors that it’s still unable to support the level of debt that might be required.”
Mr Kanofski subsequently told the Committee he was unable to provide cost and timing details at this time as TT Line was still in negotiation with the chosen head contractor BMD and sub-contractor Fitgerald.
Meanwhile, the state government has launched a grant program to support Tasmanian businesses and local councils prepare for the new Spirit of Tasmania ships.
Under the $5 million Spirit Preparedness Fund businesses can apply for grants of between $50,000 and $250,000 to create authentic Tasmanian experiences which respond to core and emerging visitor demand and directly contribute to the visitor economy.
Local councils can also apply for grants of between $100,000 and $500,000 to support key infrastructure investment in their local government areas to prepare for increases in visitation, and to improve the visitor experience for the caravan and motorhome visitor market.
Successful applicants to the Spirit Preparedness Fund will be required to match the requested grant amount.
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