Cover-up claims over TT Line ferry cost blowout
Allegations have emerged TT Line agreed to an additional $80m to the builder of the new Bass Strait ferries and did not inform the government for months.
Tasmania
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TT Line agreed to offer an additional $80m to the shipyard building the new Bass Strait ferries two days before the state election — but did not inform the government for two weeks, parliament has heard.
The agreement, which is over and above the $800m fixed-price contract, was revealed in parliament last week.
On Wednesday Premier Jeremy Rockliff revealed the TT Line Board had taken the decision on March 21, two days before the state election.
It was intended to help shore up shipbuilder Rauma Marine Construction which was at risk of going under and taking the partially-built ships with it.
“The [TT Line] board’s decision was made on 21 March 2024,” Mr Rockliff said.
“This decision was advised to the government in writing on 5 April 2024, as we have previously indicated, following the agreement of the Finish government.
“The decision to pay the additional funds was a commercial matter for the board itself under the existing contractual arrangements, and the board considered this the only viable option as the alternative was to potentially go back to market for a new ship build.”
Treasurer Michael Ferguson told parliament on Tuesday night he had been given a heads-up last year.
“The earliest indication to me of potential issues was in a verbal conversation with the TT Line chairman and CEO on 21 December 2023, in which they indicated TT Line held early concerns about the financial circumstances of RMC,” he said.
“While I remained in contact with the chairman on this issue, the first I was formally advised of significant and real financial issues regarding RMC’s commercial viability as a business and the need for a negotiating position was during the caretaker period.”
The state election was called on February 13 and Liberal and Labor MPs briefed about the ships issue in general terms under the caretaker conventions on February 29.
Labor leader Dean Winter said it was astonishing the government — and voters — were kept in the dark about the actual additional cost.
“How is it that the government of Finland knew more about a secret $80m payment than you did?” he asked Premier Jeremy Rockliff during question time.
“The payment was outside the terms of TT Line’s existing contract, was certain to attract substantial public interest, involved a significant amount of Tasmanian taxpayer money and would bind an incoming government.
“They apparently told no-one in the government about this, despite briefing both parties about potential delays just weeks earlier.”
TT-Line chairman Michael Granger assured parliament in November there would be no cost overruns.
“We haven’t talked about the full cost of the vessels other than it’s around $800 million,” he told a Government Business Scrutiny Committee.
“That doesn’t change. It’s a fixed-price contract.”
TT-Line has also waived penalty clauses for late delivery for late delivery, parliament heard.
Mr Rockliff would not say when the ships would be operational.
“I am not going to be committed to a particular date for the ships to commence service, other than to reiterate the government’s commitment to ensure the new ships begin their sailings as soon as possible,” he said.
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