$850m Bass Strait ferries contract goes to Finland

Tasmania will look to Finland to build two new passenger ferries for Bass Strait in a blow for local manufacturing.

Tasmanian Premier Peter Gutwein. Picture: Zak Simmonds

Tasmania will look to Finland to build two new large passenger ferries for Bass Strait — a decision lambasted as a “kick in the guts” for local shipbuilders.

The move comes despite a push by the Prime Minister for a reinvigoration of domestic manufacturing to aid COVID-19 recovery, and an independent report recommending a tender to further test local shipbuilding capabilities.

Instead, the Tasmanian government will renegotiate the terms of a suspended $850m deal with Finnish shipbuilder Rauma Marine Constructions to now include a $50m to $100m local component.

One of several Australian ship builders that had hoped for a change of heart, Hobart-based Incat, said the decision was the latest in a long line of snubs by the Tasmanian government.

“We’re extremely disappointed — I think they’ve made the wrong decision,” Incat chairman Robert Clifford told The Australian. “As far as they’re concerned, I might as well give it away.

“We can’t win a Bellerive ferry, can’t win a Bruny Island ferry, can’t win a Bass Strait ferry. I’ll look to retirement, I think.

“The government have promised to assist us (during the COVID-19 downturn) but what kind of assistance is there when you get a kick in the guts?”

Incat chairman Robert Clifford says ‘I might as well give it away’. Picture: Matthew Newton

Incat had hoped to build two 180m fast-speed catamarans to replace the ageing Spirit of Tasmania ferries, or at least to provide one vessel to supplement the existing ferries pending longer-term replacement.

West Australian shipbuilder Austal had pitched monohull ships built in the Philippines and fitted out in Tasmania.

An independent task-force report, released by the state government on Monday, recommended a tender, or “request for proposal”, be held to further test such offers, with a mandated local component.

Premier Peter Gutwein said his cabinet had decided against this option, favouring renegotiation with Finland’s RMC to increase the Tasmanian spend from $16m to between $50m and $100m.

As well, refuelling and maintenance of the ships would occur in Tasmania and portside equipment could also be sourced locally, Mr Gutwein said.

However, he said a fresh tender would be called if the negotiations with RMC failed to achieve sufficient local content.

“Given the pre-existing relationship with RMC … it is the government’s decision that (state ferry company) TT-Line will work with RMC over the next 30 days to finalise negotiation on the construction contract, with an increased Tasmanian spend,” Mr Gutwein said.

He stood by his decision — midway through last year — to halt the RMC deal and rethink local content, following a push by Mr Morrison and national cabinet to double-down on local manufacturing to assist economic recovery.