Putting Tasmania first in Spirit replacements

Peter Gutwein,Premier

Michael Ferguson,Minister for Infrastructure and Transport

The Tasmanian Government today released the Vessel Replacement Taskforce’s report and the preferred course of action for the vessel replacement.

Following consideration of the Vessel Replacement Taskforce report the Tasmanian Government has made the decision to enter negotiations with Rauma Marine Constructions (RMC) to deliver two new steel monohull vessels with increased Tasmanian local content.

Premier Peter Gutwein said the taskforce was established to explore how we could give Tasmanian businesses a larger share and more local content supporting local jobs when it comes to the most significant Government infrastructure spend of the last decade.

“The Report demonstrates there is significant local capacity to play a greater role in the replacement of our ships, outlining three potential options,” Mr Gutwein said.

“The Tasmanian Government will move forward largely with option three which is the purchase of ships from overseas, but with an increased focus on maximising the Tasmanian spend. We believe that two steel monohull vessels are the right approach for the Bass Strait run, but that Tasmania has the capacity to contribute more to the fit out and ongoing maintenance over the life of the vessels in a way that would support hundreds of Tasmanian jobs.”

We will now enter negotiations for 30 days with RMC for the new Spirit of Tasmania vessels targeting Tasmanian local content of between $50 million and $100 million across both vessels, and we expect also an additional local spend by TT-Line in the order of $40 million as part of the Tasmanian Government’s preferred way forward.

This is a substantial increase on the current Memorandum of Understanding, which provides for $16 million of Tasmanian content across the two vessels.

Premier Gutwein said COVID-19 had meant hard decisions had needed to be taken in the best interests of Tasmania. Last year when we decided to halt the process and establish the taskforce, our forecast unemployment rate was 12.5 per cent and our economy was expected to be in reverse at this time. If ever there was a need to explore all options for jobs for Tasmanians, COVID provided it and if faced with similar circumstances again I would do the same thing.

“We are unapologetic about taking the action required to consider and secure opportunities for Tasmania and to support Tassie jobs.”

Minister for Infrastructure and Transport Michael Ferguson said, given the pre-existing relationship with Rauma Marine Constructions (RMC), TT-Line will work with the shipbuilder over the next 30 days to finalise negotiations on the construction contract with an increased Tasmanian spend to be negotiated, estimated by TT-Line to be between $50 million and $100 million of local content.

“In addition to the anticipated local content associated with the construction of the vessels, TT-Line has indicated there are also other options for local spend by TT-Line in the order of $40 million, associated with the acquisition and commissioning of the new vessels, including using the TT-Line crew as the delivery crew for the vessels,” Mr Ferguson said.

“TT-Line will now negotiate with RMC a target date for the two new vessels to be delivered in 2023 and 2024. In the event that RMC and TT-Line are not able to reach a contractual agreement in the next 30 days, the contract will proceed to open market. However, this of course is not our preferred option.”

Minister Ferguson said the Tasmanian Government is also committed to supporting our home-grown and world class shipbuilder, Incat.

“The Government will provide support towards ongoing construction at the Incat site while we await the global passenger ferry market to recover. We will discuss with Incat the best way to support local construction work during this time to ensure jobs are maintained and this iconic Tasmanian business is well positioned to grasp global opportunities into the future.”

The Tasmanian Liberal Government will continue making decisions that deliver the very best social and economic outcomes for our state in a post-COVID world, and that means thinking differently and above all else, putting Tasmania first.

The Taskforce’s full Report can be found here: Vessel Replacement Taskforce | Treasury and Finance Tasmania. Some minor parts of the Report have been redacted for commercial in confidence reasons.

/Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.