Basslink, the owner and operator of the subsea cable between Tasmania and the mainland, has gone into voluntary administration owing $70 million to the Tasmanian government.
The company said recent disputes with Hydro Tasmania and a failed sale had brought on the decision, which is in “the long-term interest of Basslink, its creditors and employees”.
“Basslink has operated in a highly challenging environment for some time,” chief executive Malcolm Eccles said.
“Given the issues as a result of the cessation of discussions with APA and the ongoing disputes with Hydro Tasmania, it felt that administration was the best way to effect change while protecting all stakeholders.”
Arbitration between the parties found in favour of the government and Hydro Tasmania in December 2020, with damages of $38.5 million awarded against Basslink.
The arbitrator also decided that a force majeure event had not occurred, and declared that Basslink’s claim for unpaid feeds of $31 million... was not recoverable”.
Eccles said the company had “exhausted” all other options, and needed to “take proactive action to put Basslink in the best possible position to navigate forward through these challenges”.
He added that the “interconnector continues to operate efficiently and reliably”.
Ernst & Young representatives have been appointed as voluntary administrators, while KPMG has been appointed the recovered and manager.
EY will now undertake a review and assessment of Basslink’s operations to inform the next steps.