A planned replacement of its existing fleet with new ships built in Finland announced by Tasmanian ferry operator earlier this year has been dropped.
TT-Line Company has been advised by the TT-Line Shareholder Ministers that the Government will not proceed with the proposed vessel replacement contract with Finnish ship builder Rauma Marine Constructions (RMC) due to COVID-19 and its economic implications for the State.
Chairman Michael Grainger said the government indicated that, given current and emerging economic problems caused by COVID-19, there needed to be more consideration of local content and manufacturing jobs in Tasmania and Australia as part of the overall vessel replacement project.
“The decision is not a reflection of the quality of the business case developed by TT-Line, nor the ability of RMC to deliver the proposed contracts,” he said. “It is simply a matter of timing and the unprecedented impact COVID-19 is having and will have on state and national economies. The Government and TT-Line still believe it is essential that the vessels are replaced in coming years to support the growing passenger and freight transport needs of the state. We therefore look forward to working with the government on the next proposal and business case for its consideration that will further maximise local economic benefits.”
Grainger said the government’s decision announced today did not impact the company’s decision to move its Victorian port operations from Station Pier, Port Melbourne, to Corio Quay, north of Geelong. “The company will still relocate by the end of 2022 when the Station Pier lease expires,” he said.
The government supported the company’s original vessel replacement business case presented in 2017, and a subsequent recommendation in 2018 to sign a contract with German shipbuilder Flensburger Schiffbau-Gesellschaft (FSG). More recently, when it was mutually agreed between TT-Line and FSG that FSG would not build the new vessels, TT-Line signed a Memorandum of Understanding with RMC and commenced contract negotiations and agreed final design specifications. The TT-Line Board submitted an updated business case following a unanimous Board recommendation that TT-Line sign a new ship construction contract with RMC. That recommendation was considered and subsequently not endorsed by the Shareholder Minsters.