TT-Line is confident that it will pay off debt associated with the cost of the new Spirit of Tasmania vessels in 15 years' time, a government business scrutiny committee has been told.
TT-Line chief executive Bernard Dwyer told the scrutiny hearing on Thursday that public finance company Tascorp was approving of its business case for the new vessels which would vital when it came time for the business to borrow for the project.
There is a balance of $62 million in a Tascorp fund of the vessel replacement and TT-Line has $112 million stored away for the project.
Mr Dwyer said any of the dividends generated by TT-Line had gone into the vessel replacement fund which, in turn, generated interest.
"We will draw down on the vessel replacement fund, we will draw down on the cash that's available within TT-Line, and then we will go into debt," he said on paying for the vessels.
"With the returns coming back through TT-Line next year, we will repay the debt going forward.
"The payback on these new vessels is certainly south of 15 years which is really good for an infrastructure investment.
"That will then give TT-Line another 10 to 15 years to build up reserves for the replacement of these vessels."
Mr Dwyer said the total cost of the replacement vessels and the onshore infrastructure required was approaching $1 billion.
He said the cost of the vessels had a fixed price that was, depending on the exchange rate, about $850 million.
He said the current vessels were valued at 61 million euro each and they would be sold one by one as the new vessels arrived.
The first new vessel is due to arrive to the state in late 2023 and the second in late 2024.
TT-Line in June made a $128.3 million payment to Finnish shipbuilder Rauma Marine Constructions for the new vessels.
Mr Dwyer said the company was required to make its next payment to RMC by February or March.