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It's been described as a "calamity for Tasmania", one of the most "embarrassing" days in the state's history, and left a key business group questioning if it can trust the government again.
Tasmanian Premier Jeremy Rockliff on Thursday announced that a permanent berth for the new Spirit of Tasmania vessels would only be ready by early 2027 – about two years after the ships are ready to use.
He also announced the vessels would be leased out in the interim, despite Spirit operator TT-Line pouring cold water on that idea in its own business case, also released on Thursday.
Mr Rockliff is under increasing political pressure over the saga, which has already claimed the deputy premier. (ABC News: Jordan Young)
Mr Rockliff promised to set a pathway forward by giving firm time frames and interim solutions, but has left the business and tourism sector reeling.
Tasmanian Chamber of Commerce and Industry (TCCI) chief executive officer Michael Bailey said the business community had been relying on the new, larger ships being in operation this year.
He said the effects of the delays are already being felt.
Michael Bailey says the state's business community is losing trust and confidence in the government. (ABC News: Mitchell Woolnough)
"This is a situation that obviously business has lost confidence with this government over," Mr Bailey said.
"Can we trust them? We don't know.
"It's a situation that industry has been talking about for a while, that the government seems to have slowly rolled out to tell the people. It's not good enough."
The first of the new vessels is sitting in Finnish shipyards, while the second is expected to be finished in the first half of next year.
One of the new vessels undertaking sea trials in Finland. They are larger than the current vessels and will accommodate larger vehicles. (Supplied)
But they have nowhere to be berthed in Tasmania, following delays in construction at Devonport caused by growing disputes between TT-Line and TasPorts – both government-owned companies.
Tourism Industry Council Tasmania chief executive Amy Hills said the confirmed delays were a blow for the sector.
"For quite some time we've all been expecting that we were going to have new boats towards the end of this year and into next year. There were businesses that planned and looked to rely on that capacity," she said.
"Today's news is going to be really difficult … it's lost opportunity."
TT-Line prefers storing ships in Scotland over leasing them
In his announcement, Mr Rockliff said that TT-Line had engaged a broker to find lease options for the ships.
"We will be leasing the new vessels, the work is underway," he said.
The first of the new vessels is expected to leave Finland, potentially for Tasmania, by the end of this month. (Supplied: Spirit of Tasmania)
But TT-Line's preliminary business case for berthing options raised a range of concerns.
"Leasing the vessels to another operator may result in a loss of control over their condition and operational use, raising concerns about warranties and maintenance," the report reads.
"While leasing may offer immediate financial benefits, the potential risks and long-term implications highlight why this option may be less favourable compared to the base case of storage."
Storing the ships until the berths are ready was the preferred option, with potential locations already assessed.
The report found that storing the ships at Leith in Scotland was the most cost effective, followed by Hobart, which was slightly more expensive.
Economist Saul Eslake says the government has few options left, particularly with the state's deteriorating finances. (ABC News: Owain Stia-James)
But economist Saul Eslake said leasing the vessels would help to offset at least some of the financial losses being incurred by the government.
"The government now is in a position where it has to make the best of the situation it finds itself in," he said.
"If the alternative is simply paying to have the ships tied up at a dock … that would be the government paying out more money to berth those ships without getting any revenue for them."
In 2020, he estimated that the Tasmanian economy suffered a $350 million loss for each year that the new Spirits were not operational.
Tourism groups hope support measures can help
Mr Rockliff also announced $26.5 million in measures to try to support the tourism sector as a result of the delays.
These included $6 million in subsidised passenger fares, and to allow for additional Spirit day sailings, along with funds for increased aviation capacity, and a $5 million "Spirit Preparedness Fund".
Tasmania's north-west is home to remnant Gondwana rainforest in the takayna/Tarkine, but tourist operators are worried about the difficulties in reaching the region. (ABC iview: Back Roads)
There will also be 100,000 travel vouchers valued at $100 each, with details to be announced after a tourism roundtable on November 1.
West by North West Tourism chief executive officer Gabriella Conti said the focus had to be on making up the shortfall caused by the lack of new Spirits.
She hoped that these measures would help.
"Our number one priority, what we have been talking to government about, is to get access into the North West Coast," Ms Conti said.
A growing number of travellers — both in Tasmania and on the mainland — have been reporting lengthening delays in being able to book larger vehicles on the current Spirit vessels.
Labor opposes idea to lease ships
The cost blowouts with the new Spirits ships, and delays and blowouts with the berth infrastructure, was made public following questioning in parliament by the Labor opposition.
It resulted in former deputy premier Michael Ferguson first relinquishing his infrastructure portfolio having been the shareholder minister for TT-Line and TasPorts, and then resigning from cabinet ahead of a no-confidence motion.
TT-Line raised concerns about proposed interim berth upgrades, including safety issues, but the plans were investigated this year regardless, before being ruled out on Thursday.
Labor leader Dean Winter says the government is continuing to compound the problems. (ABC News: Jasmine Snow)
Labor leader Dean Winter said this had caused even more delays.
"We've lost another six months of time because Jeremy Rockliff has been mucking around at berth one pretending there is an interim solution when there wasn't one," he said.
Mr Winter said leasing the vessels was a bad idea.
"I am concerned about the option of leasing these ships out to a foreign country. I'm concerned about the safety of doing that, I'm concerned about the ability for the government to actually pull that off," he said.
"These Spirits are branded 'Spirit of Tasmania', the painting is already on the ship."
But former Jacqui Lambie Network MPs, now independents, Miriam Beswick and Rebekah Pentland were supportive.
Independent MP Rebekah Pentland believes there are positives from the leasing idea. (ABC News: Maren Preuss)
"The time frame justifies exploring leasing options," Ms Pentland said.
"Ideally, the Spirit of Tasmania signage would remain on display, creating a floating billboard for our state."