A third secret bailout payment to the Finnish shipbuilder responsible for the new Spirits project has been revealed by the Public Accounts Committee.
The Committee has learned that in April 2022 an additional, secret payment of €8million—nearly $13 million AUD—was agreed to by TT-Line, with the prior knowledge of the Treasurer, Michael Ferguson. The TT-Line Chair told the Public Accounts Committee:
“On the 25th of April 2022, we sent a letter to our Minister and Treasurer about the negotiated contract price, which was €8 million in the contract price to cover those steel price increases due to the war in Ukraine for hull 6009. That was the first contract price change.”
Not only did Michael Ferguson hide this eight-figure extra payment from Tasmanian taxpayers, he also appears to have misled a Government Business Estimates hearing six months later. He told that hearing that “the contract… is a fixed-price contract. Despite impacts that the Chair indicated earlier, it is fixed price, therefore there is not a view that the price has changed.”
But the price had changed—on a supposedly fixed-price contract—and Tasmanian taxpayers were on the hook for another $13 million.
Delays, cost blowouts, dishonesty – once again the Liberals’ inability to deliver big projects is on full display. Michael Ferguson owes Tasmanians a full explanation.
Public Accounts hearing (available here at 12:00)
Mr Grainger - Certainly, COVID had an impact, the Ukraine war had an impact. If you will recall, the major steel manufacturing plant for Europe was in Ukraine and that was bombed very early on in that war which caused RMC to seek steel from alternative sources at a higher price. On the 25th of April 2022, we sent a letter to our Minister and Treasurer of the negotiated contract price, which was €8 million in the contract price to cover those steel price increases due to the war in Ukraine for hull 6009. That was the first contract price change.
On the 31st of May 2022, we had an amendment to that new build, 6009 (Spirit IV). We executed an amendment to the contract to change of the contract price due to unforeseen price increase of the shipbuilding steel products, steel plates and profiles as a result of the Russian-Ukraine war and to respective change of the construction milestones and delivery date.
On the 28th of October, we executed an amendment to the contract for hull 6010…
Ms Forrest - That's in 2022 still?
Mr Grainger – 2022. Spirit V to reflect the construction milestones and delivery dates. On the same day we executed an amendment to the contracts to reflect changes in the builder's bank account. The builder had changed banks.
On the 14th of May 2023, we executed an amendment to the contract for hull 6010 to reflect the construction milestones.
Dean Winter MP
Labor Leader
Anita Dow MP
Shadow Minister for Infrastructure
