German shipbuilder Flensburger Schiffbau-Gesellschaft’s financial woes not expected to scupper Spirit of Tasmania replacements

The construction of two vessels to replace the Spirit of Tasmania ferries remains on track, despite the German shipbuilder tasked with building them experiencing “some financial difficulties”.

New Spirit of Tasmania concept design.

THE construction of two vessels to replace the Spirit of Tasmania ferries remains on track, despite the German shipbuilder experiencing “some financial difficulties,” the TT-Line says.

Chairman Michael Grainger said TT-Line was in “close discussions” with shipbuilder Flensburger Schiffbau-Gesellschaft about any effect its financial difficulties would have on the deal with TT-Line.

TT-Line signed a $700 million contract last May with the shipbuilder to replace its Bass Strait ferries by 2021. No money has been paid yet.

“We’ve been notified that they have been experiencing some financial difficulties, however we don’t know the exact detail of those financial difficulties because right now it has really no effect on our contract,” Mr Grainger said.

“Our contract is for the delivery of two ships in 2021, as I sit here now that is still the case, we have no reason to believe that the contract will change.

“But in terms of proper governance we need to advise the Tasmanian public that they are apparently experiencing some financial difficulties, and we will deal with those.”

Germany's Flensburg Shipyard was selected by TT-Lines Tasmania for construction of two large passenger ferries to be delivered in in 2021.

Mr Grainger said there was “no indication whatsoever” that there were any financial issues with Flensburger Schiffbau-Gesellschaft when the contract was signed.

He said the shipbuilder was still working on the vessel designs.

“There's nothing that leads us to believe that they are in any way behind schedule on that, however we won’t really know their true financial position for probably another six to eight weeks,” he said.

“It’s public knowledge that they are having some auditors in the company, the CEO has been removed, and a new CEO and a new chairman has been appointed to the company.

“We have not paid a deposit, we have not paid any money to the shipyard in terms of the contract, and we won’t do so until we can be satisfied with a refund guarantee securing the taxpayers’ money.”

Premier Will Hodgman said the current Spirit of Tasmania vessels can continue to operate for at least a decade, should they be required.

“Contingencies are in place and, if required, once the situation is clearer we can look for alternate builders,” Mr Hodgman said.

The replacement vessels are planned to be 212m long and accommodate 1800 passengers and up to 600 passenger vehicles.

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