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🇦🇺 Australia /Economy & Trade

Spirit of Tasmania operator expected to remain in debt until 2052, inquiry hears

From ABC Australia · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Under investigation
  • State-owned TT-Line is expected to remain in debt until 2052 after major cost overruns in the Spirit of Tasmania ferry replacement project, a parliamentary inquiry heard.
  • The project has cost $717 million more than forecast, while the company’s borrowing limit has risen to $1.4 billion and the Tasmanian government has announced a $506 million bailout.
  • TASCORP said meaningful debt reduction is not expected until the early 2040s, but it remains confident TT-Line can repay its loans under a government guarantee.

The operator of Tasmania’s Spirit of Tasmania ferries is not expected to clear its debt until 2052, a parliamentary committee has heard. State-owned TT-Line is dealing with the financial fallout from the troubled replacement of its two Bass Strait ferries, which are expected to enter service in October after years of delays.

The project has cost $717 million more than forecast when it began in 2018. Much of the overrun came from the new berth facilities at Devonport. The Tasmanian government has announced a $506 million bailout, including $200 million in the 2026-27 budget, while TT-Line’s borrowing limit has increased by $400 million to $1.4 billion.

high level of debt for a considerable period of time

· Gary SwainThe TASCORP chair described TT-Line’s expected financial position to the parliamentary committee.

Representatives of state-owned financing company TASCORP appeared before parliament’s public accounts committee, which is examining the ferry replacement project. TASCORP chair Gary Swain said meaningful debt reduction was not expected until the early 2040s, and that the debt would not be cleared until 2052.

meaningful debt reduction

· Gary SwainSwain said TT-Line was not expected to achieve this until the early 2040s.

He said TT-Line would face a high level of debt for a considerable period and would be constrained in its capital spending. However, he described it as highly unlikely that any government would allow the company to fail because it provides a service required by the community.

Swain said TASCORP would continue to monitor the company closely and that risk and uncertainty should decline once the new vessels enter operation and the berths are complete. He said TASCORP was confident TT-Line could repay its debts under the government guarantee. Chief executive Heath Baker told the committee debt should fall below $1 billion by the 2030 financial year, helped by the government’s cash injection.

highly unlikely

· Gary SwainHe used the phrase to describe the prospect of a government allowing TT-Line to fail.

TASCORP expects to recommend longer-term borrowing limits and a debt profile for TT-Line after a September meeting. The committee heard that the long-term forecast should be more accurate than an earlier forecast from TT-Line, which contained several assumptions.

The reason that the business is in public ownership in the first place is it's a service that's required by the community

· Gary SwainSwain explained why he expected the government to continue supporting the ferry operator.
About this summary

Originally published by ABC Australia in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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