Contract between TT-Line and German shipbuilder cancelled

TT-line has revealed who will likely build their two new Bass Strait ferries now that the original contract with an embattled German shipbuilder has been cancelled.

THE contract between state-owned ferry operator TT-Line and a German shipbuilder to deliver two new ships to carry passengers and freight across Bass Strait has fallen over.

After many months of speculation that German shipbuilder Flensburger Schiffbau-Gesellschaf’s financial troubles would impact on the delivery of the two new Spirit of Tasmania vessels, TT-Line confirmed today the $354 million contract was not going ahead.

A concept design for the replacement Spirit of Tasmania vessels from 2017.

TT-Line chief executive officer Michael Grainger said the company was advised 10 days ago that it needed to find another shipbuilder.

And while no money had yet changed hands having to find a new shipbuilder would cost time and delay the delivery of the new bigger, modern vessels.

Mr Grainger said TT-Line had now signed a memorandum of understanding with Finnish company Rauma Marine Constructions, which was on the original short-list of contractors, to discuss a deal.

This will include finalising the delivery date, for which the MOU targets late 2022 for hull one and late 2023 for hull two.

TT-Line chief executive officer Michael Grainger said no money had changed hands. Picture: SAM ROSEWARNE

The government originally promised the new ships would arrive in Tasmania in March next year but it became clear last year that construction had not started.

Mr Grainger today admitted no “steel had not been cut.”

As late as January, Premier Peter Gutwein was sticking to the government’s line that all was well.

“We have no advice at this stage in terms of any changes to the contract. The contract remains in place and Tasmania’s interests remain protected,” Mr Gutwein said at the time.

“Until we receive further advice from TT Line that contract remains in place and the state’s interests are protected.”

Tasmanian Premier Peter Gutwein. Picture: Zak Simmonds

Mr Grainger said his company had been gagged from discussing the status of the contract until now.

The FSG contract was worth about $219 million euros ($A354 million) per vessel. Each ship will accommodate 1800 passengers and up to 600 vehicles.

In February last year, TT-Line said it was in close discussions with FSG about its “difficult financial situation” and any potential impact on its contract to build the Tasmanian ferries.

Labor says the government had “ducked and weaved” on the health of the original deal for two years

“The failure of Michael Ferguson to manage critical infrastructure projects is up in lights today,” Shadow Minister for Infrastructure Shane Broad said.

“The government has ducked and weaved on this issue for two years, failing to confirm what was blindingly obvious – the new Spirits of Tasmania would not be delivered on schedule.”

“It’s the biggest infrastructure project in Tasmania’s history and the secrecy and incompetence surrounding it is unacceptable.

“We’ve known for some time that the delivery of the Spirits is in doubt, but government refused to acknowledge the obvious.”

Dr Broad said today’s announcement still doesn’t provide certainty on a delivery date for the ships.