Spirit of Tasmania ferry operator to be in debt until 2052, inquiry hears

TT-Line, the operator of the Spirit of Tasmania ferries, is projected to carry a substantial debt burden until 2052, according to testimony before a parliamentary committee. This state-owned company has struggled financially following an unsuccessful attempt to replace its ferries with two new vessels. The troubled project, which began in 2018, has exceeded its $717 million forecast cost by more than $700 million, primarily due to increased expenses related to the construction of new berth facilities in Devonport.

In response, the Tasmanian government pledged a $506 million bailout, with $200 million allocated in the 2026-27 budget. TT-Line's borrowing capacity was expanded by $400 million to a total of $1.4 billion. Gary Swain, chair of TASCORP, the state-owned financing company, testified that the company's high level of debt is expected to persist for several decades, with meaningful debt reduction not anticipated until the early 2040s and full clearance of the debt projected to occur in 2052.

Heath Baker, TASCORP's chief executive, noted that while the company may face limitations in its capital expenditure, it is unlikely that the government would permit TT-Line to fail. The committee chair, Ruth Forrest, inquired whether they were confident TT-Line would continue operating under this debt level. Swain assured that while the company would be constrained in its capital decisions, a government would not allow its closure.

He emphasized that the service provided by TT-Line is essential to the community, and the financial situation would be closely monitored. TASCORP is optimistic that the company will be able to fulfill its debt obligations as the vessels and berths become operational. The committee is also expected to make a recommendation soon on TT-Line's proposed borrowing limits and debt profile, based on a more recent and accurate financial forecast provided by TASCORP in September.