Whenever I have a difficult question, I turn to the magic mirror in the Baird Maritime office.
In the past, the mirror has answered tough questions on Australia’s national champion in gas, prolific political donor and lobbyist Woodside, and on hooker-buying basket case McDermott.
Next week, we shall be asking the mirror some forward-looking questions on the consequences of the proposed merger between offshore construction powerhouses Subsea7 and Saipem, but first…
“Mirror, mirror on the wall, who is the most shambolic state-run ferry operator of them all?”
"Those Scottish fools at Caledonian Maritime Assets (CMAL) and their chums at Caledonian MacBrayne (CalMac) and Ferguson Marine don’t look great, it’s true," the mirror replied. "But on the other side of the world, beyond the Indian Ocean, lies a publicly owned ferry company more badly run than you can imagine."
“Oh yes, dear mirror,” I said “Do you mean KiwiRail Interislander in New Zealand, which runs a fleet of antiquated ferries carrying trains, which cross the Cook Strait at just 15 knots, and which cancelled its order for new building ferries in Korea? Our founder ran a piece headlined “Cook Strait Checkmate” on that unfortunate company and its many challenges last year.”
I laugh to myself.
"No, Hieronymus, there may be light at the end of the tunnel in the Land of the Hobbits. Pay attention.
"Last Thursday was the deadline for private sector proposals for an alternative Cook Strait ferry service. The NZ government is soliciting bids for two newbuild ferries from international shipyards itself, too, and is looking for a maritime lawyer to draw up the contracts, whilst negotiations for KiwiRail to exit the cancelled contract with Hyundai Mipo Dockyard continue.
"Despite the lack of an emergency towing vessel for the country, and the terrible sinking of the Royal New Zealand naval survey vessel HMNZS Manawanui, which struck a reef and sank near Upolu, Samoa in October whilst conducting a hydrographic survey, New Zealand may be slowly improving its marine capabilities."
I breathed lightly and muttered under my breath. “I thought the Wood Group had also turned a corner, but we discovered last month that it was not so. Let’s not be naïve. Do the Kiwis not look at what is happening in Canada with the casualty containership MSC Baltic III and wonder how they would manage such an accident with their limited resources?"
The mirror makes a tut-tut sound and tells me it was so much easier when it only had to answer questions on who was the fairest of them all from Kim Kardashian.
“It is not KiwiRail, not today.”
Perplexed, I focus on the task at hand.
"So, splendid mirror, who could then be more incompetent than CMAL, CalMac and the Scottish government were, what with their two ferries being eight and nine years delayed at Ferguson shipyard on the Clyde?
"Did you not know with your reflective insight that one ferry remains still unfinished, that former First Minister Nichola Sturgeon is still being investigated by police over National Party funding (and has divorced her husband, the former party chairman), and the cost overruns on the ferries Glen Sannox and Glen Rosa saw a shipbuilding contract originally valued at £97 million (US$147 million in 2015) now costing £400 million (US$503 million today), all paid for by the Scottish taxpayer?
"Oh, mirror, the irony that vessels designed to run on liquefied natural gas (LNG) cannot use that fuel as none of the berths the ferries serve in Scotland have LNG storage facilities."
“Tush, Hieronymus,” the mirror replies. “I know all that. I am an omniscient and all- seeing mirror. Glen Sannox has been in service since January, however.
"I see too that the Scottish government is looking to nationalise the Peel Ports-owned Ardrossan Harbour, which requires upgrades to accommodate Glen Sannox. That ferry currently sails to the Isle of Arran from Troon in South Ayrshire, as the vessel is too big for Ardrossan, whilst a Vietnamese-built catamaran operates out of Ardrossan.
"It’s not clear why such a catamaran cannot continue to serve the route forever using the existing facilities, but I digress…
"As a piece of bathroom fittings, I see it as positive that the next four Ro-Pax ferries for CMAL are being built in Turkey. It is unfortunate that the ships have seen their completion date pushed back by at least another three months due to labour shortages, as was announced last week.
"But a few months is nothing compared to the years of delay experienced at Ferguson, and Cemre Marin Endustri shipyard at Yalova provided a refund guarantee to the buyers, so there is a hitherto unseen element of commerciality creeping in after the Ferry Fiasco. Isle of Islay, the first of the quartet to deliver, should now be completed in June….”
"No, the most shambolic ferry company of them all has delivered two 212-metre long Ro-Pax vessels with capacity for 1,800 passengers each and a 25-knot service speed, but it cannot operate them for several years and is laying them up…”
“What?” I ask astounded. “The company paid for and received two newbuild ferries, but cannot put them into service? Which clowns are these?”
“TT-Line Company, which is owned by the government of Tasmania and trades as Spirit of Tasmania” the mirror replied. “In April 2021, Finnish shipyard Rauma Marine Construction signed a contract with TT-Line for two newbuild ships, Spirit of Tasmania IV and Spirit of Tasmania V.
"Construction began in December 2022 but the yard required support from its customer to complete the ferries, so TT-Line Company had to contribute US$52 million to continue the project. Happily, both the ships have now delivered at a total cost of AU$932 million (US$579 million, as per Mitchell Bruce).
"They were supposed to work in the Bass Strait between Geelong in Victoria and Devonport in Tasmania, but they can’t. Instead, the owners are paying US$354,000 per month per vessel to lay them up in Leith in Scotland.”
“What?” I say, confused. “The shipyard needed bailing out? I am shocked. I thought the two new ferries would replace the 1998-built Spirit of Tasmania I and Spirit of Tasmania II this year. Tasmania has less than 600,000 people, so everyone in the state has paid US$1,000 each for something they can’t use? That sounds like quite some incompetence. What is happening?"
The mirror sighed, like the long-suffering Tasmanian taxpayers.
“Alas, the new ferries are bigger than their predecessors and there have been delays to the construction of an upgraded wharf at Devonport, so the ships cannot enter service in the Bass Strait because they cannot berth in Tasmania without drastic reductions in their capacity, as Dr Neil Baird pointed out in an editorial in August. They could berth in Hobart, but this is not being considered.
"The new jetty was supposed to have been ready in 2026, but now it seems it will not be finished until 2027, after the original contract holder for the Devonport works was axed by TT-Line in the middle of last year without consulting the state premier. So, now TT-Line is trying to charter the vessels out in Europe."
“How was it not known that the berth would be delayed?” I asked.
“ABC has reported that there was a report prepared by a consultant, which raised concerns about TT-Line's project team capacity in February, as well as the ability to deliver the project on time," the mirror said.
"Unfortunately, the Tasmanian government was in caretaker mode, ahead of an election, so Department of State Growth secretary Craig Limkin told an inquiry that a junior staffer 'with good intentions' had decided not to pass the report on to the minister. When the problems became known, the cost of the berth upgrades at Devonport had 'unexpectedly' increased to AU$375 million (US$233 million).”
“Oh,” I query the mirror on whether there were consequences for these issues.
“Yes,” it replied, mournfully. “When the news broke in August, the state premier requested and accepted the resignation of the chair of TT-Line, Michael Grainger, effective immediately, after the entire board of TT-Line had accused Tasmanian Deputy Premier Michael Ferguson and TasPorts of lying to a Parliamentary inquiry. Mr Ferguson stepped down a month later, and Mr Grainger gave his side of the story to Pulse Tasmania in October.
"The esteemed Tasmanian-born lawyer Damian Bugg KC was appointed temporary chair of TT-Line, and two veteran infrastructure engineers were drafted in by the state to monitor the Spirit Partners, the new construction consortium working to relocate TT-Line’s Devonport base of operations from its existing berth 1 to berth 3.”
“Will TT-Line lease the ferries to CalMac?" I asked the mirror. "Their newbuilds are all delayed, and birds of a feather should flock together…"
“No,” the glass sheet replied. “One ferry is being considered to house Ukrainian refugees in Scotland. Or maybe not. A broker has been appointed to try to fix charters.
"Unfortunately, in December it emerged that TT-Line has been in breach of its loan agreements for six months, it is borrowing to pay interest and may need a state bail out itself, as the company’s debt-load is approaching AU$1 billion (US$621 million) as per the local press.”
“Is there worse to follow?” I asked. “I see there was a local content scandal, too, with Finnish-built engines being counted as Australian content as they were purchased through an Australian company, and iPads also counted as Tasmanian when local content was evaluated. Who knew there was an iPad factory in the tech hub of Launceston?”
The mirror remains silent and points me to an opposition press statement from Tasmania.
“The Spirits are five years late, AU$500 million over budget and unable to operate at full capacity when the first ship is operational – and we are still not sure when this will be.
“But Spirit of Tasmania is not the worst Australian maritime mess-up at the moment. Just wait until you hear about the hundreds of millions wasted in the decommissioning of the floating production unit Northern Endeavour, for which the federal government is on the hook… and the vessel still hasn’t left location, six years after it was shut down and its operator went bust.”
Now it is my turn to fall silent.
Addendum: The BBC is now reporting that Spirit of Tasmania IV will need to leave lay-up in Leith and sail to Tasmania.
Background reading
The letter writers to the Scottish newspaper The Herald are remarkably knowledgeable about the state of Scottish ferry services. The letter from Alistair Macfarlane highlights fifty years of problems on the Arran service, with CalMac repeatedly choosing the wrong ferry for the route.
Meanwhile, Peter Wright points out that the “[1993-built steel Ro-Ro] Caledonian Isles has had more cash wasted on her in this past year than a brand new catamaran would have cost to service her normal run. The [catamaran] Alfred cost [only] £15 million (US$19 million) to build yet £20 million (US$25 million) has been spent chartering her to date. Her operation to Brodick has been both unfaltering and popular yet CMAL tells us that catamarans are unsuitable for CalMac service."
He concludes that “CMAL should be ordering catamarans right now because the rusting problems will only become a greater problem to this decrepit fleet in the very near future.”
If only the Tasmanian and New Zealand publics were as well-informed.
The BBC covered the opposition from CMAL to the modernisation of working practices and to the debate over catamarans here. And here is minute by minute breaking news coverage of Glen Sannox’s maiden commercial voyage, eight years in the making.
Surprise! It looks like Glen Rosa may be further delayed after the vessel’s parts were cannibalised borrowed by the builders to sort out problems on Glen Sannox, Ferguson Marine’s chief executive has disclosed.
Pulse has photos of the TT-Line vessel in Leith here.