Spirit of Tasmania IV and V made their first official Bass Strait crossings on Friday evening, after a nine-year procurement process marked by controversy and financial strain.
The new ferries, built in Finland, replace the 28-year-old Spirit of Tasmania I and II, offering 60 per cent more vehicle space and capacity for 400 additional passengers, as well as pet-friendly cabins. They have space for three times as many caravans and motorhomes as the older vessels, and Luke Emmett said this should alleviate capacity problems for travellers.
Tourism Industry Council Tasmania chief executive Amy Hills said the industry was excited and relieved after years of uncertainty and was looking forward to the new ships entering service. Devonport caravan park operator Luke Emmett described the ships as an icon for Tasmania.
The project was announced in 2017, with new ferries planned to enter service in 2021. In 2018, TT-Line signed a $714 million deal with German shipbuilder FSG, but the contract was cancelled in early 2020 because of FSG’s finances. After a taskforce’s unsuccessful attempt to find an Australian builder, the government returned to Finnish firm Rauma Marine Constructions. The project then suffered further delays and cost increases, including an additional $81 million paid to the shipbuilder amid a global inflation crisis.
Another issue arose at the ships’ home port of Devonport, where construction of the new berth had not started even though the deadline was only two months away. Terminal facilities were originally scheduled to cost $90 million, but the cost of the terminal and berth works later rose to $493 million. The saga ultimately cost TT-Line chair Michael Grainger his job. Michael Ferguson resigned from the infrastructure portfolio and eventually as deputy premier.
The ships began official crossings five years late and at a cost $700 million more than the original business case. TT-Line is projected to carry a peak debt of $1.1 billion this financial year, with forecasts suggesting the company will not be debt-free until at least 2052. Until TT-Line finds a buyer for the old vessels, the Tasmanian taxpayer will be stung with their storage costs.
The former state opposition leader described the project as “the worst infrastructure stuff-up in Tasmania’s history”. In 2020, economist Saul Eslake estimated the Tasmanian economy could lose $350 million for every year the new Spirits were not operational.
Analysis
Why This Matters
- The new ferries are a critical piece of transport infrastructure for Tasmania's visitor economy, and the capacity increase could significantly boost tourism.
- The project's cost blowout and associated debt burden will be a long-term fixture of the state's finances, raising questions about governance.
- The saga serves as a case study in project management failure, from contract design to scope creep on essential supporting infrastructure.
Background
The Spirit of Tasmania is the primary passenger and freight link across Bass Strait, essential to Tasmania's economy. The replacement program was announced in 2017 with an initial budget of $714 million and a 2021 delivery date. The project was beset by a collapsed contract, political interference, a failed attempt to use an Australian builder, a global inflation crisis, and a separate cost blowout on new dock infrastructure in Devonport.
Key Perspectives
- Tourism Industry Council Tasmania: Says the industry is relieved and excited, ending a period of uncertainty.
- Luke Emmett: Devonport business owner who sees the arrival as a new era that will help bring more tourists and relieve vehicle capacity constraints.
- Economist Saul Eslake: Estimated the delays cost the Tasmanian economy $350 million per year in lost opportunity.
- Former state opposition leader: Characterised the project as "the worst infrastructure stuff-up in Tasmania's history".
What to Watch
- The sale of the old Spirits I and II and the final cost of their storage for the Tasmanian taxpayer.
- Whether the increased capacity translates into a meaningful increase in visitor numbers and TT-Line revenue.
- The state government's strategy for managing TT-Line's debt, which is not expected to be cleared before 2052.
Checked
12 claims in this story checked against 1 source: 9 supported.
Show each claim
- Partly supportedThe headline says the ferries made their first crossings, after a five-year delay.Just In: “But as Spirit of Tasmania IV and V set sail for their first official crossings of Bass Strait this evening”
- Partly supportedThe ferries made their first official crossings on Friday evening.Just In: “But as Spirit of Tasmania IV and V set sail for their first official crossings of Bass Strait this evening”
- SupportedThe launch is marked by cost blowouts and political fallout.Just In: “Few projects in the state's history have attracted as much derision and criticism as the Spirit of Tasmania replacement program, which has been marred by delays, cost blowouts and controversy since it was first announced in 2017.”
- Partly supportedTT-Line forecasts peak debt of $1.1 billion.Just In: “TT-Line's forecast debt will peak at $1.1 billion this financial year”
- SupportedThe former state opposition leader called the project “the worst infrastructure stuff-up in Tasmania's history”.Just In: “"The worst infrastructure stuff-up in Tasmania's history," according to the state's former opposition leader.”
- SupportedThe new ships have 60 per cent more vehicle space than their predecessors.Just In: “The new boats can carry 400 more passengers than their predecessors and have 60 per cent more vehicle space.”
- SupportedThe new ships can carry 400 more passengers than their predecessors.Just In: “The new boats can carry 400 more passengers than their predecessors and have 60 per cent more vehicle space.”
- SupportedThe new ships have space for three times as many caravans and motorhomes as the older vessels.Just In: “Crucially, they also have space for three times as many caravans and motorhomes than the older vessels.”
- SupportedLuke Emmett said the new ships should alleviate capacity problems for travellers.Just In: “"This should alleviate a lot of that for people and give them a little more flexibility, with a bit of luck."”
- SupportedTT-Line signed a $714 million deal with FSG in 2018, and the contract was cancelled in early 2020 because of FSG's finances.Just In: “The following year, state-owned ferry operator TT-Line signed a deal with German shipbuilder FSG to build two new ships for $714 million. But the project was delayed, and the contract was cancelled in early 2020 due to FSG's finances.”
- SupportedTT-Line paid the Finnish shipbuilder an additional $81 million amid a global inflation crisis.Just In: “RMC was facing financial difficulties of its own amid a global inflation crisis, and TT-Line paid RMC an additional $81 million to ensure the ships could be finished.”
- SupportedThe terminal and berth works rose in cost from $90 million to $493 million.Just In: “The new terminal facilities were originally scheduled to be finished in August 2024, in time for the new vessels, at a cost of $90 million.”