How did Tasmania's Spirit ferry operator make a $9 million mistake?

The rollout of two new Spirit of Tasmania vessels has been plagued by scandal, mistakes, delays and cost blowouts.

There was an $81 million bailout to a Finnish shipbuilder two days before a state election.

Then there were revelations that a new wharf in Devonport had ballooned in cost from $90 million to $375 million, and now $493 million.

And the wharf itself was so delayed that the two new vessels — themselves delayed multiple times — would be finished in Finland without anywhere to berth in Tasmania.

This meant temporary berthing in Scotland, costing another $7.7 million.

Two state-owned companies were at loggerheads throughout, a public slanging match started, a minister resigned, a board was replaced, and a project "recovery" process started, finding even more problems.

Those problems include wharf infrastructure installed to incorrect specifications — insisted upon by Spirit of Tasmania operator TT-Line, despite warnings — costing about $9 million to rectify.

How did this latest issue happen?

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In June 2023, the relationship between TT-Line and public port owner TasPorts was already showing signs of strain over the ferry replacement project.

Former TT-Line management said they had been promised access to the port at this time, but that it did not eventuate until almost a year later.

There was also an exchange between project-level staff, revealed this week during a parliamentary hearing.

TT-Line wanted a change to specifications for the fenders — infrastructure that helps the ships safely interact with the wharf when berthing.

TasPorts questioned this and asked to speak to the Finnish shipbuilder about it — but according to TT-Line's new chair Ken Kanofski, this was refused.

"TT-Line insisted and said, 'Dunno, we're right, they're our ships and we know what we're doing," he said

"TasPorts did what they were being paid to do, which was deliver them."

The issue was not escalated to the board or the government, and so three of the fenders were installed to incorrect specifications, creating potential problems in difficult weather conditions.

New team identifies 'challenges'

Over a year later, disputes between TT-Line and TasPorts were aired publicly.

This included claims from TasPorts chairman Steven Bradford that they were continuously concerned with how TT-Line was managing the wharf project.

There were sweeping changes at TT-Line, and by January 2025 it had a new board, new management, and a special team trying to guide the ferry replacement.

Towards the end of June, they identified "challenges" with the three fenders.

Unclear if person responsible is still employed

This started another investigation, including whether the issue could be worked around without having to spend millions of dollars.

That is when the 2023 emails were discovered.

Technical work was undertaken with TasPorts from July to September to find solutions, and the minister was informed in August.

It went through a project assurance committee — a process that did not exist when the problem first happened.

The solution includes welding extra steel into the hulls of the two new vessels.

When asked if the staff member involved in the 2023 issue remained employed, TT-Line refused to comment on individual employee matters.

Hull fix will 'benefit local contractors', premier says

The issue was worked through behind closed doors until September 26, when it was referenced at the bottom of a government press release.

At that time, it was described as "upgraded hull specifications" with no further detail.

Ministers appeared to brush it off.

"The matters around the hull are being attended to which, of course, will benefit local contractors as well," Premier Jeremy Rockliff said on September 29.

"This is … no different to a new house when you moved into it, there are adjustments that you make to it, a ship is exactly the same," Infrastructure Minister Kerry Vincent said on September 30.

"In the scheme of things, this is a very, very minor issue," Mr Kanofski said on September 30.

'Open and transparent'

And then on Monday this week — a day before a public parliamentary hearing into the Spirit replacement — the government disclosed the $9 million cost, and some of the extent of the works.

A $75 million equity injection for TT-Line was also announced.

On Tuesday, the full extent of the fender and hull issue was revealed during the hearing.

Spirit V would have its hull works completed overseas, while Spirit IV would be done locally — costing $4 million for both ships, and $5 million for the fenders.

Both TT-Line and Mr Rockliff said they had been transparent throughout the process.

"We have been working through that in a very systemic way," Mr Kanofski said.

"As we have found issues, we have been very transparent about the fact … and we have been very transparent about how we are fixing them.

Mr Rockliff said the government had been "open and transparent".

"Minister Vincent was a great example of that just a few days ago when he detailed a number of matters around TT-Line," he said.

The issues facing TT-Line continue.

In the coming months, the company will present a revised corporate plan to the government to try to resolve its long-term financial problems.

The company is at $1 billion of its $1.4 billion debt limit, which it hopes can be extended to 2027, but confirmed during the parliamentary hearing that the need for further government support is likely.

"This is a company that will deliver for our economy. That's why we make strategic investments," Mr Rockliff said.