A DIRECT shipping service from Tasmanian to South-East Asia is now on hold, with Swire Shipping citing the extension of the Tasmanian Freight Equalisation Scheme as the reason.
The government signed a Memorandum of Understanding (MOU) with Swire, late last year, in a bid to provide a direct service.
Swire would have received $33 million over three years, to help establish the service.
Swire Shipping’s Country Manager, Brodie Stevens said the company was interested in working with its Tasmanian partners, to develop "long term, competitive, direct international services."
But he said the extension of the Tasmanian Freight Equalisation Scheme to exports had " "materially changed" the strategic context of the MOU.
" The economic case for a direct international service linking Tasmania to global markets is no longer sustainable," Mr Stevens said.
"However we confirm our commitment to Tasmanian shippers who have been extremely supportive of our efforts.
"While Swire Shipping recognises that the extension of the TFES will be positive for the Tasmanian market in the short term, a solution for the medium to long term requirements of
Tasmanian Exporters remains uncertain."
Infrastructure Minister Rene Hidding said the plan was designed to give Tasmanian exporters better access to vital overseas markets at a time when international shipping from the state had ended.
“As was agreed with Swire as part of the MoU, the Government and Swire both reserved the right to take into account any changes implemented by the Federal Government regarding the Tasmanian Freight Equalisation Scheme (TFES),” Mr Hidding said.
“Obviously, the recent decision by the Federal Government to inject an additional $203 million into the TFES will have a substantial impact on freight equalisation and the cost of exporting freight from Tasmania.
“As such, given this materially different strategic context, it was not possible to reach an agreement with Swire under the terms of the MoU and given the MoU has now expired, these negotiations with Swire have concluded.”
Mr Hidding said there may be future opportunities for Swire as changes to the TFES were implemented and further changes to the Federal Coastal Trading Act were considered by Federal Parliament.
The $33 million allocated for a potential international shipping service would be spent on job-creating infrastructure, to be outlined in the 2015-16 budget.
Chairman of the Tasmanian Logistics Committee Steve Henty agreed Swire might still be looking at what level of market support it could rely upon.
“They may be eligible for the expanded TFES,” Mr Henty said.
“The environment has changed since the initial signing of the MOU, with the TFES and the entry of another international service, the Meditteranean Shipping Company.”
“In our opinion it’s prudent decision making, there has been a lot of change since the MOU was signed.”
The money should be redirected into other infrastructure projects.
“Our desire is that those decisions are not made quickly but a long term freight and logistics plan is put in place for Tasmania.”
The government signed a Memorandum of Understanding (MOU) with Swire, late last year, in a bit to provide a direct service.
Swire would have received $33 million over three years, to help establish the service.
Infrastructure Minister Rene Hidding said the plan was designed to give Tasmanian exporters better access to vital overseas markets at a time when international shipping from the state had ended.
“As was agreed with Swire as part of the MoU, the Government and Swire both reserved the right to take into account any changes implemented by the Federal Government regarding the Tasmanian Freight Equalisation Scheme (TFES),” Mr Hidding said.
“Obviously, the recent decision by the Federal Government to inject an additional $203 million into the TFES will have a substantial impact on freight equalisation and the cost of exporting freight from Tasmania.
“As such, given this materially different strategic context, it was not possible to reach an agreement with Swire under the terms of the MoU and given the MoU has now expired, these negotiations with Swire have concluded.”
Mr Hidding said there may be future opportunities for Swire as changes to the TFES were implemented and further changes to the Federal Coastal Trading Act were considered by Federal Parliament.
The $33 million allocated for a potential international shipping service would be spent on job-creating infrastructure, to be outlined in the 2015-16 budget.
Chairman of the Tasmanian Logistics Committee Steve Henty agreed Swire might still be looking at what level of market support it could rely upon.
“They may be elegible for the expanded TFES,” Mr Henty said.
“The environment has changed since the initial signing of the MOU, with the TFES and the entry of another international service, the Meditteranean Shipping Company.”
“In our opinion it’s prudent decision making, there has been a lot of change since the MOU was signed.”
The money should be redirected into other infrastructure projects.
“Our desire is that those decisions are not made quickly but a long term freight and logistics plan is put in place for Tasmania.”
