In short:

It has been revealed both the government and the company managing Tasmania's port facilities had concerns about the ability of the state-owned company operating the Spirit of Tasmania ferries to manage the construction of upgrades to the berths for the new ships.

It has also come to light the decision by TT-Line to rescind its preferred tenderer status was "made unilaterally by TT-Line" while Tasmania's government was in election caretaker mode — and a report detailing concerns about the project was not passed on due to the "good intentions" of a "junior staffer".

What's next?

The refurbished port facilities are expected to be completed in early 2026. Until then, the new ships, which are yet to arrive, must operate well below capacity so as to be able to use temporary berths.

Tasmania's infrastructure minister has told a parliamentary inquiry he had "concerns" about state-owned ferry operator TT-Line's ability to deliver the port infrastructure for the new Spirit of Tasmania ships as far back as late last year.

The first of the bigger and better Spirit of Tasmania ships is due to arrive in Tasmania at the end of this year, but the port infrastructure won't be ready until January 2026.

In the meantime, an unknown amount of money will be spent to upgrade berth one — Labor claims it'll cost at least $50 million.

And the ship will have to operate at a reduced capacity, taking the same number of passengers and freight as the existing ships.

In a parliamentary inquiry into the TT-Line spirits project on Monday, Infrastructure Minister Michael Ferguson revealed he was "aware of concerns in the civil contracting industry about TT-Line's works at berth 3" back in October 2023.

Mr Ferguson said he raised these concerns with TT-Line in his monthly meetings but was "firmly assured there was no cause for concern and that the project was on track" for the Spirits to operate out of the new berth by August 2024.

Still holding concerns, Mr Ferguson called a meeting in November with TT-Line and TasPorts to discuss the berth three works, where it was agreed the Department of State Growth would have "greater involvement and oversight" over the project.

"At that meeting, I was again provided assurances by TT-Line that the company's port side project was on track," Mr Ferguson said.

It was in the midst of this year's state election campaign, when the Liberal government was in caretaker mode, that TT-Line agreed to pay 50 million euros ($83 million) to the Finnish company building the Spirits, Rauma Marine Constructions (RMC). 

The government was briefed about that. But Mr Ferguson said neither he, nor the department, were warned TT-Line was going to ditch its preferred tenderer for the wharf upgrade.

"The decision by TT-Line to rescind its preferred tenderer status was made unilaterally by TT-Line during the election caretaker period, without notifying the government," Mr Ferguson said.

"That decision created delays due to the need to extend the procurement process, or indeed to commence a new one."

Mr Ferguson said he and the department only found out about that decision in April, with a new tenderer appointed on August 1.

The inquiry also heard that a February 12 report prepared by a consultant raised concerns about TT-Line's project team capacity, as well as the ability to deliver the project on time.

However, because the government was in caretaker mode, Department of State Growth secretary Craig Limkin said a junior staffer "with good intentions" decided not to pass it on to the minister.

Port operator 'consistently concerned' over ferry company's ability to deliver

TasPorts also told the committee it long held reservations about TT-Line's ability to complete the project.

TasPorts chair Stephen Bradford said the company had been "consistently concerned" with TT-Line's program and progress since December 2022 and had regularly communicated that to them.

"We've also attempted to support them in a number of ways, including … provision of project management, construction management and services through our project team," he said.

"They have chosen, at all points, to do it themselves. That is their choice."

Mr Bradford said TasPorts also "regularly updated the minister" on their concerns.

"The board was being advised by management who were very concerned. The gateway review panel was saying exactly the same thing," he said.

"We, for quite a period, advised the minister. His answer was, 'I've got a problem because what you're saying is I'm getting the exact opposite answer from the other party'.'"

When questioned whether it had any evidence to back this up, TasPorts said it had raised it verbally and there were no minutes.

The state-owned company said it was hoping to have a cost estimate for upgrading berth one — the interim home for the new Spirits — in the next four to six weeks.

TT-Line said it will speak to the issues raised at the inquiry when it appears before committee members later this week.