A KING Island community engagement question and answer meeting has been organised to discuss the ongoing issues around the island’s shipping services.
The meeting will be held at 5.30 pm on October 3 at the King Island Club.
Guest speakers will be Independent MLC for Murchison Ruth Forrest, Eastern Line Shipping MD Warren Dick, Mayor Vernon Philbey, King Island Shipping Group chairman Greg Morris, King Island Chamber of Commerce president Rosemary Hallett and King Island Beef Producers Group chairman Nick Lyttle.
Ms Forrest has asked questions about the formation of Bass Island Line and purchase of the ship John Duigan as interim King Island freight task and shipping solutions. Ms Forrest asked Transport Minister Michael Ferguson in the Legislative Council question time, what the government had done in the last five years regarding the possible transition to a private operator taking over the entire King Island shipping and freight task.
Mr Ferguson said that TasPorts undertook a market investigation and assessment of the BIL business model in late 2018. He said that potential operators were invited to submit “indicative proposals to participate in the delivery of the BIL service. “The evaluation panel determined that none of the market participants sufficiently demonstrated that their proposals were able to independently achieve an improved BIL service without ongoing involvement and support from TasPorts.”
Eastern Line Shipping (ELS) is the second King Island shipping and freight operator servicing King between Victoria and the mainland of Tasmania and King Island.
Mark O’Brien plays an advisory role and is the accountant to Eastern Line Shipping. From 1999 he provided advice to LD Shipping which serviced the King Island freight and shipping task to King Island. Mr O’Brien has provided accounting and business advisory services to King Island businesses for more than 20 years. Mr O’Brien said Eastern Line carried the majority of freight to King Island. “We carry substantially more than Bass Island Line. We are the major shipper and Eastern Line operates profitably, pays its taxes, workers, and everything else on time. It runs a very good business model.
“I did an analysis of the losses that BIL has had since its inception, which are substantially more than $3 million. “Tax effect accounting applies to government entities so effectively, the losses that are actually reported in the TasPorts statements are understated by 30%. “I haven’t seen the 2022 numbers yet, but prior to this part of the 2022 year, the actual real losses, excluding the tax effect accounting, were in excess of $24 million.”
The TasPort’s 2022 annual report is due to be published and by the end of October at the latest. Mr O’Brien confirmed that ELS had a past and present interest in BIL and has not seen published reports of the investigation undertaken, or the outcomes the Minister refers to in his answer.
“We do have an interest in taking over the commercial service of BIL. And in fact, the existence of BIL is inhibiting the growth of Eastern Line. “We had some discussions with TasPorts back in 2018 but there wasn’t a lot of information shared. “We did have meetings with Mr Ferguson in relation to how we could increase the efficiency of the shipping service to King Island and we’re waiting to hear back. “He promised to follow up with us after our meeting – which was held about four months ago, and we still haven’t heard anything further. “We’ve had some discussions with BIL as opposed to TasPorts in relation to providing services. But nothing came out of those either. “There are political forces making sure that King Island has a service. “We had no problems in meeting all the freight demands when it was only Eastern line operating the service.
“Under normal commercial considerations, BIL, if it weren’t backed by the government, would have ceased operations many years ago.” Mr O’Brien said if he were a shareholder he would be asking questions. “It’s very hard to get answers and the only people who have the real numbers are TasPorts. “I’m not sure that they even supply the full details of to the Minister; it doesn’t report the same way as a normal Australian Stock Exchange listed company.
Ms Forrest said there was failure to respond to questions, whether it’s the council or even to others that operate in the market, like Eastern shipping lines in a timely manner and a lack of follow up from the Minister on commitments he has made. “It’s not helpful to the island, and it actually smacks of disrespect for islanders.” she said. “The Minister has ultimate responsibility, obviously, on behalf of Tasmanians, who actually own TasPorts and thus own BIL” “What concerns me, is that we know that BIL continues to run a significant loss, and that’s effectively the Tasmanian tax-payers subsidising a loss-making venture when we have other operators in the market who could manage the full freight task.
“You actually wonder why they keep doing it when there are other operators. We know that Eastern shipping lines are certainly providing a service to the island at the moment. “Having a loss making venture providing part of that service does question the ongoing viability, as well as undermining operations that may come in,” Ms Forrest said.