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Thursday, 28 October 1993
Page: 2752


Senator VANSTONE —My question is directed to the Minister for Transport and Communications. Did the Department of the Arts and Administrative Services express a view to the Australian Maritime Safety Authority as to the propriety of purchasing the Spanish hull and having it fitted out as a replacement for the Cape Moreton? If it did express such a view, what was it?


Senator COLLINS —Not only was DAAS involved in this exercise but there was also close consultation with the Department of Industry, Technology and Regional Development. The answer that I gave yesterday to Senator Vanstone on the same question provided information that, effectively, the hulls concerned were bankrupt stock. That is, in fact, the case. At the time that the Australian Maritime Safety Authority conducted a worldwide search for suitable vessels and these two hulls, which were precisely in accordance with the requirements of the Australian Maritime Safety Authority, were found, they were in the hands of liquidators. Extensive consultation was conducted between the Australian Maritime Safety Authority and the departments that I have just mentioned.


Senator Hill —What was the advice?


Senator COLLINS —I will provide it to Senator Vanstone. A thorough search of Australian shipyards was conducted. In fact, AMSA was offered two partially built vessels by different overseas shipyards at extremely competitive prices. The hulls were at such a stage that only the early fit-out had commenced and AMSA was in the fortunate position of being able to commission the remaining fit-out to precisely its needs.

  AMSA became aware of these vessels. Prior to that, it had considered an extremely wide range of options for servicing the navigation aids network and concluded that the most cost-effective alternative to continuing with the 30-year-old ship that it had was to charter another vessel for the next three years. However, after this search, which I referred to yesterday, AMSA was unsuccessful in finding a suitable vessel for charter. But it was during the search for this vessel that it discovered the availability of these partially built vessels overseas that were then in the hands of liquidators.

  As I said, AMSA had consulted major ship builders in Australia to ascertain whether they could offer a competitive proposal. None of the Australian companies was able to make a competitive offer on either price or delivery date. The Australian Shipbuilders Association wrote to me in May this year. I provided a comprehensive response to it at that time, which gave a detailed explanation of the Australian Maritime Safety Authority's actions in this regard.

  AMSA has an obligation to provide the most cost-effective services to the Australian shipping industry that it can; that is part of its charter, which is no doubt fully supported on convenient occasions by the opposition. The difference in rough terms is that it will be able to take delivery of its vessel at a fully capitalised cost of something less than $19 million. Providing exactly the same vessel to the same requirements at a fully capitalised cost from an Australian shipbuilding yard would have cost somewhere between $25 million and $30 million, which is an extremely significant difference. I am not talking about price margins of five per cent, 10 per cent or even 20 per cent.

  Under those circumstances, AMSA was in a fortuitous one-off situation. It would have had to expend in the order of $10 million to $11 million in additional capital to commission such a ship in an Australian shipyard. Under those circumstances, AMSA took the correct decision.

  My office advised a journalist from the Australian Financial Review last night not only of this information but also of the name of Mr McGrath of AMSA and his home and work telephone numbers. That journalist did not bother contacting him.


Senator VANSTONE —Mr President, I ask a supplementary question. The minister indicated that the first most cost-effective option decided on by AMSA was the charter of an alternative vessel for three years. Will he provide the Senate with information as to the cost-effectiveness of all the options considered by AMSA? Did the Department of the Arts and Administrative Services wholeheartedly endorse the proposal? I note he was kind enough to say that it was consulted but not kind enough to indicate what it said in response to those consultations. The minister was also kind enough to say that he will offer its advice. Will he also offer to me the advice given by DITARD? Lastly, will he provide to the Senate the information that he gave to DAAS and DITARD on which they formulated the view that they gave back?


Senator COLLINS —The last part of the question was a complete nonsense. Senator Vanstone should have stuck to her original script. Senator Vanstone has got a bit of publicity, which she is obviously pleased about, from a newspaper that, in respect of reporting anything concerned with me, has abandoned any pretence of objectivity in what purports to be a news article.

  As I said, the full details were provided by me to the Australian shipbuilding industry in June. I will provide Senator Vanstone with the material that she is seeking. I say again that full consultation was engaged in by AMSA with both those departments. All Australian shipbuilding yards that were capable of providing this vessel were approached by AMSA and invited to submit designs and prices. As I said to Senator Vanstone in the Senate, the price for the vessel it now has came in at the fully capitalised cost of something under $19 million. To buy the same vessel from an Australian shipyard would have cost somewhere between $25 million and $30 million.