The promised delivery of two new Spirit of Tasmania vessels in 2021 to replace the current fleet is in doubt.
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State-owned TT-Line Company said it is in discussions with the German shipyard contracted to build the new Spirits due to industry reports the shipyard is in a “difficult financial situation”.
Flensburger Schiffbau-Gesellschaf shipyard secured the $700 million build contract last May after being endorsed by the TT-Line board over other shortlisted international shipyards.
TT-Line chairman Michael Grainger said the company was in close discussions with the shipbuilder about any potential impact on TT-Line.
“We shortlisted three shipyards to build the new vessels, so we are now in discussions with the other shortlisted shipyards just in the unusual event the shipyard can not fulfill the contract,” Mr Grainger said.
“In the event of any delay, the current Spirits of Tasmania vessels will be emissions compliant from 2020 and can continue to operate past 2021.”
Mr Grainger said it is public knowledge FSG are having some auditors in the company, the CEO has been removed and a new CEO and new chairman have been appointed.
“Our contract is for the delivery of two ships in 2021, we have no reason to believe the contract will change,” Mr Grainger said.
“We continue to have solid contracts in place with FSG to build the new Spirits of Tasmania, and the detailed ship design work is progressing as planned.”
Mr Grainger said the first payment to FSG will be made when they can provide a refund guarantee.
“Importantly, there is no exposure to TT-Line or state funds under the current contracts and no payments have been made to date,” Mr Grainger said.
Mr Grainger said it was not unexpected for a ship builder to experience cash flow problems.
“In preparing a business case for the Tasmanian government to select FSG to build the new ships, TT-Line exhaustively assessed vessel types and fleet configurations to determine the most suitable vessels to operate daily crossings on Bass Strait,” Mr Grainger said.
“The company engaged solicitors and accounting firms in Europe to undertake full due diligence on all shipyards shortlisted.”
FSG is a respected and experienced shipbuilder that has constructed more than 750 vessels since it was established in 1872.