Government’s ‘hands-off’ approach to TT-Line ship deal criticised

INVESTMENT: An artist's impression of one of the new Spirit of Tasmania vessels. Picture: Flensburger Schiffbau-Gesellschaft
Article from the Advocate newspaper

The state government’s failure to step-in to ensure the on-time delivery of two new Spirit of Tasmania ships has been criticised as TT-Line is set to meet with the troubled shipbuilder this week. 

Questions raised by the Labor party regarding the ability of German shipyard Flensburger Schiffbau-Gesellschaft to fulfill its contract to deliver the new vessels by 2021 follow the resignation of the Tasmanian-based project leader on Sunday. 

FSG has been plagued with financial difficulties and, despite being bailed out from near-bankruptcy by a German investor in recent months, industry reports say a number of engineers have left the company causing delays on the ships scheduled to be completed by FSG before construction starts on the two Spirits. 

A TT-Line spokesman said the meeting this week was the latest in a series of meetings since TT-Line announced FSG was experiencing financial difficulties in February this year.

The spokesman said the timeline for the delivery of the ships had not changed since the contract with FSG was signed, with the vessels due to be in service by the end of 2021. 

The ships are currently in their design stage with their construction to begin after FSG completes a vessel for Irish Ferries.

A more detailed timeline regarding the stages of the build was not available as the ships were not started yet, the spokesman said. 

Treasurer Peter Gutwein said TT-Line would work through what he labelled the “obvious challenges” facing FSG with the shipyard. 

When asked why the Tasmanian-based project leader resigned, Mr Gutwein said “people come and go in companies all the time”.

Mr Gutwein said the new Spirits would be fully funded in the budget over the next four years and, because the contract is in euros, the government has hedged additional funds.

“We haven’t paid any money to the company, nor will we until we have a guarantee of delivery in place,” Mr Gutwein said. 

Labor infrastructure spokesman David O’Byrne said it was unacceptable the government was taking a hands-off approach to the ships’ delivery. 

“What we are seeing is leaks and stories coming from Europe and now TT-Line itself. It’s not good enough for them not to brief the Tasmanian people on the status on what is one of the most important infrastructure projects in the state’s history,” Mr O’Byrne said.

Mr O’Byrne said industry reports of key staff leaving FSG caused him to question the timing of the delivery of the vessels.

“The TT-Line replacement vessels are very important for the state,” he said, stating the new ships were crucial to meet the growing demands of freight and tourism.

TT-Line preparing for delivery of new Spirit of Tasmania vessels past 2021

The delivery of two new Spirit of Tasmania vessels could extend beyond the 2021 deadline due to issues at the shipyard responsible for their construction.

Murchison independent MLC Ruth Forrest at a budget estimates hearing on Monday said through her reading of the 2019-20 budget papers, it seemed that the vessels were anticipated to be delivered later than previously thought.

Treasurer Peter Gutwein said TT-Line was working through the prospect of a later delivery though money to fund the new vessels would be made available regardless of the project time frame.

There had been $81 million taken from the vessel replacement fund by TT-Line to pay a deposit with the shipbuilder though it had not yet been paid, he said.

Mr Gutwein said there was still $40 million resting in the fund.

He said all TT-Line dividends over the budget’s forward estimates would be transferred to the replacement fund.

Flensburger Schiffbau-Gesellschaf secured a $700 million build contract with the government in May 2018 to build the new vessels.

The shipbuilder was reported earlier this year to be experiencing financial difficulties.

New Ro/Ro for Toll

Deck crowded for naming ceremony of Toll Group’s Tasmanian Achiever II freight vessel

BIGGER, BETTER: Toll Group's new vessel, Tasmanian Achiever II, will help the company boost its Bass Strait cargo capacity by 40 per cent.Pictures: Simon Sturzaker
New Ro/Ro Tasmanian Achever II in Burnie

A new era of Tasmanian shipping was ushered in on Sunday 17/2/19 with the official naming of Toll Group’s new freighter, the Tasmanian Achiever II.

Around a thousand people packed the decks of the 210-metre-long vessel to witness the champagne smashing ceremony, tour the quarters and try a shipping simulator.

Toll spent $311 million on the Tasmanian Achiever II, its sister ship the Victorian Reliance II and port upgrades in what has been dubbed the largest private investment in Australian coastal trading in 25 years.R

Chairman John Mullens said it was “a pretty special day” for the Burnie community, Tasmania, the Australian shipping industry and shareholder Japan Post.

“In life today we hear so much about cutbacks and downsizing and economising that it’s great when an opportunity comes along to do the opposite,” he said.

“An opportunity to expand the business undertaking to build new assets, to create new employment and to invest in the future and that is what Toll is doing here today.”

BIG CROWD: Around a thousand people were on deck for the official naming ceremony of the new vessel.
BIG CROWD: Around a thousand people were on deck for the official naming ceremony of the new vessel.

The two new ships will boost Toll’s Bass Strait cargo capacity by 40 per cent and quicken the crossing by two hours.
Mr Mullens said the ships provided a “glimpse into the future” as they were greener, safer, more efficient and fitted with the latest maritime technology.

Prime Minister Scott Morrison attended the naming ceremony and said Toll’s investment in the ships reflected their confidence in Tasmania, “the turnaround state”.

“They believe in what’s happening here in the Tasmanian economy and they’re investing back in that success…” he said.

Premier Will Hodgman said Toll’s investment was “a truly stunning symbol of Tasmania steaming ahead”.

“It’s a powerful show of confidence in Tasmania’s strong economy and our prospects by one of the world’s great companies,” he said.

Japan Post bought Toll in 2015 and first executive officer Taneki Ono hoped the naming ceremony would ignite a strong bond between the two companies and the Burnie community.

“Our confidence in the Australian market and your future is very strong, having invested more than $600 million into capital expenditure projects across the fleet, vessels infrastructure and technology,” he said.

BIGGER, BETTER: Toll Group's new vessel, Tasmanian Achiever II, will help the company boost its Bass Strait cargo capacity by 40 per cent. Pictures: Simon Sturzaker
New Ro/Ro Tasmanian Achiever II
SIGN HERE: Prime Minister Scott Morrision signs a poster in the bridge of the Tasmanian Achiever II. Pictures: Simon Sturzaker
Prime minister of Australia Scott Morrison
OFFICIAL DUTY: Prime Minister Scott Morrision and Premier Will Hodgman unveil the name of the Tasmanian Achiever II. Pictures: Simon Sturzaker
Prime minister of Australia Scott Morrison and premier of Tasmania Will Hodgman

FSG Rescued, new Tassie Ferries safe.

Lars Windhorst, New German investor in FSG

Flensburg Shipyard has been financially rescued by a German investor, Lars Windhorst’s company Sapinda Holdings B.V, taking over 76% of the yards ownership from the Norwegian SIEM group, who will remain an active investor and will still hold the majority of the Supervisory Board in FSG . This agreement will bring a € 33 million Euros cash injection into FSG, € 10 million Euros of that coming from SIEM.

Work can now resume back to normal with the building of the Honfleur for Brittany Ferries, as all contractors had left the site a few weeks ago when the financial trouble first surfaced at the yard, after paying the penalties on W.B Yeats for delivering her six months late to Irish ferries.
This deal will guarantee the building of the new Tasmanian ferries, although the meeting of the delivery deadline is sill in question.

FSG’s order books are full, with Brittany Ferries Honfleur expected to be delivered late, toward the end of this year. 2 Ro/Ro ferries for SIEM, (First on is in build now) and a second Ro/Pax ferry to Irish ferries, before commencing construction on the new Tasmanian ferries.

With the latest developments, its possible the second Ro/Ro for SIEM maybe postponed so the sister of W.B Yeats and Tasmanian ferries can be delivered on time. It has also been rumored that Irish ferries may cancel the second order. But purely speculation at this point in time.

Translation from German “Maneger Magazin”

” Financial investor Lars Windhorst took over the majority stake in Flensburger Schiffbau-Gesellschaft (FSG) on Monday, ending a liquidity squeeze at the shipyard. According to information from, Windhorst’s Sapinda Holding, owned by the Norwegian owner Siem Europe, took over 76 percent of the company’s shares.

In addition, the investor working in London and Berlin provided the shipyard with a capital increase of 33 million euros. The previous owner participated in the rescue by issuing 10 million euros of debt, which were converted into new shares.

Flensburg Shipbuilding has been part of the Siem Industries Group since 2014, which is active in the oil and gas industry. In January, the shipyard had been unable to pay its 1,800 employees salaries until the parent company stepped in. Reason are delays in the construction of a ferry and resulting contractual penalties. Other bills remained open, a guarantee of Schleswig-Holstein had burst.

With the fresh money, the FSG has good prospects again. The order books are full. By 2021, four large passenger ferries and three cargo ferries are to be built in Flensburg. Total order volume: 1 billion euros.”

Image result for New Spirit of Tasmania
Rendering of new TT-Line ferries, FSG

Manager Magazin, In german

Press Release from SIEM

Press Release from FSG

On time delivery of new Spirit of Tasmania ferries in doubt as shipbuilder faces financial difficulties

Tasmanian media have picked up on the delay and financial troubles of FSG.

  • Emily Jarvie, The Advocate Newspaper.
IN DOUBT: Financially troubled German shipbuilder Flensburger Schiffbau-Gesellschaf is due to deliver two new Spirit of Tasmania vessels to replace the current fleet in 2021.

 IN DOUBT: Financially troubled German shipbuilder Flensburger Schiffbau-Gesellschaf is due to deliver two new Spirit of Tasmania vessels to replace the current fleet in 2021.

The state government has been called upon to deliver as promised the two new Spirit of Tasmania vessels due to replace the current fleet in 2021. 

The on-time delivery of the two new Spirit of Tasmania vessels is in doubt, with state-owned TT-Line Company in discussions with the German shipyard contracted to build the new Spirits due to industry reports saying the shipyard is in a “difficult financial situation”. 

Flensburger Schiffbau-Gesellschaf shipyard secured the $700 million build contract last May after being endorsed by the TT-Line board over other shortlisted international shipyards. 

Shadow Minister for Infrastructure David O’Byrne said reports the German shipbuilder was in financial trouble are a serious concern and called on the government to commit to delivering the new vessels without delay. 

“These vessels represent the single largest purchase in the state’s history,” Mr O’Byrne said.

“Tasmania is in high demand for international and interstate tourists and many Tasmanian families depend on the Spirits for interstate travel.

“The increased capacity of these vessels is vital to ensure the tourism industry can continue to grow.”

“The government committed to deliver the vessels in 2021 and the clock is ticking.”

A government spokesperson said the contract remains in place with FSG as do all the conditions. 

“Contingencies are of course being looked by TT-Line if FSG indicate they are unable to fulfill the contract, but to be clear there has been no such advice so it is premature to speculate,” the spokesperson said. 

“No money will change hands unless a refund guarantee is in place to protect taxpayer funds.”

TT-Line is in discussion with the two other shipyards that were shortlisted in case of the event FSG can not fulfill the contract, however indicated they wanted to remain working with FSG on the new ferries due to their reputation as one of the best shipbuilders in the world. 

Premier Will Hodgman said the government is waiting further advice regarding the long term viability of FSG. 

“Contingencies are in place and if required, once this situation is clearer, then we can look for alternate builders,” Mr Hodgman said. 

“The appropriate due diligence was undertaken, contracts have been exchanged but not a dollar has been exchanged.

“There will be no disadvantage to the Tasmanian taxpayer.”

TT-Line chairman Michael Grainger said the current fleet of Spirit of Tasmania ferries was going very well and are at full capacity. 

“They will comply with the new emission regulations which come into force on the first of January next year.

“The biggest problem that TT-Line has got is with capacity right now.”

“We’ve brought forward the planned build of new ships to accommodate additional passenger carrying capacity,” Mr Hodgman said. 

“We’ve got two ships that are currently on Bass Strait that have got at least a decade or so yet, should that be required.” 

Founder of Superfast Ferries dies at 84

Pericles Panagopoulos, (To the left) co founder of Superfast ferries onboard Superfast III (Spirit of Tasmania II) at Turku Finland.
Photo: © Greek Shipping miracle.

“Greek shipping magnate Pericles Panagopoulos passed away at the age of 84 following long hospitalization with a serious health problem. His wife announced his death on Facebook noting that he died at 6 a.m. on February 5. “After a long-lasting battle, he started his last and longest journey,” Katerina Panagopoulos wrote.

He was considered as one of the most successful Greek shipowners since Aristoteles Onassis and founder of modern Greek shipping. In 2009, his net worth was estimated at $328 million.

The low profile businessman shocked Greece when he was kidnapped by armed men in Athens on January 12, 2009. The kidnapping was orchestrated from prison by crime boss Panagiotis Vlastos, who later made a failed attempt to escape prison, with a helicopter.

Kidnappers contacted his wife Katerina had reportedly paid a ransom of 30 million euros in order to secure her husband’s release. He was released on Jan 19. The ransom was reported by Greek police to be the highest ever paid.

Panagopoulos started his career in1972, when he formed the Royal Cruise Line in partnership with Barney A. Ebsworth.

Twenty years later, he co-founded with his son Alexander Superfast Ferries, as part of the Attica Group, an Athens-listed holding corporation. In 1999, he buys 38.8% of Strintzis Shipping Co and soon increase his share into 48.8%. the company was later renamed into Blue Star Ferries.

His funeral is scheduled for 11 a.m. Friday, February 8, at Dionisios Aeropagitis church in Kolonaki. HE will be buried in A Cemetery in Athens.”

Superfast II, second of the first pair of ferries ordered by the Panagopoulos family.
©Costas Sarlis
Text from:

Builder of new Spirits in finical difficultly.

Render of the New Spirit of Tasmania ferry. FSG

Flensburger-Schiffbau-Gesellschaft (FSG) builder of the new Spirit of Tasmania vessels has run into financial problems. After building a ferry for Irish ferries (W.B Yeats) and delivering it six months late, resulting in heavy penalties to be paid by the yard to Irish ferries.
The yard is restructuring its management, by sacking its CEO and placing personal from the parent company SIEM in charge. SIEM will pay the wages and bills for the yard in the mean time. Its hoped the yard can negotiate with its suppliers to continue to trade. Currently all contractors have left the site, and the ferry under construction for Brittany ferries – Honfleur will be delivered at least four months late. This will most likely mean TT-Line will have its ships delivered late, if the yard continues to trade.

News from NI Ferry Site