The operator of the Spirit of Tasmania ferries has admitted it was worried it could have lost two partially completed new vessels if the Finnish shipbuilder had collapsed.
TT-Line earlier this year agreed to pay an extra €50 million for the ferries, a parliamentary committee heard on Friday.
Treasurer Michael Ferguson was reportedly warned as early as December last year that the shipbuilder, Rauma Marine Constructions (RMC), was facing financial difficulties.
TT-Line Chairman Mike Grainger said both government and opposition MPs were briefed by the company on February 29.
“We did advise them that we’d been advised by RMC that they were in financial difficulty but they hadn’t actually asked us for an amount to resolve that,” he said.
TT-Line chief executive Bernard Dwyer expressed concerns about the shipbuilder potentially facing liquidation.
“This is such a delicate period because you’d all be aware of what happens in a run on a bank … exactly the same thing would happen with suppliers.,” he said.
“If suppliers thought that the company was in difficulty and they weren’t going to get their money, all of the suppliers, all of the workers would leave.”
“They would just stop then and we would then have an over 90% completed vessel sitting in the yard and we’ve got no ability to do anything with that particular vessel and that particular contract.”
“It would go to the receiver, we would have no control over whether we could buy the vessels, whether we could take the vessels to another yard to complete them.”
“To lose that could have been catastrophic for this company, it would be catastrophic for the tourism industry [and] for the state.”
Initially, TT-Line offered an additional €30 million to RMC to complete the ferries, but RMC rejected this offer, leading to a revised contract for €50 million on March 21.
Grainger said Treasurer Michael Ferguson was informed on the same day and Treasury the following day, but the opposition and the Tasmanian public were not informed due to caretaker conventions.
“It’s not our position to communicate with the broader public,” he said. “Why would we go public on matters that are delicate?”
“If our shareholder, the government, wishes to do that, that’s OK with us.”
The construction of the ships is being financed by TT-Line through debt funding.
