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 challenges that arose as a result of the end of conversations with APA and the ongoing conflicts with Hydro Tasmania, the administration was deemed the best approach to promote change while safeguarding all stakeholders.” The ruling comes only two weeks after the Tasmanian government announced plans to sue Basslink for $70 million in compensation for interconnector disruptions in 2015 and 2016.
In December 2020, arbitration between the parties was decided favorably by the government and Hydro Tasmania, with $38.5 million in damages granted to Basslink. The arbitrator also determined that a force majeure event had not occurred and concluded that Basslink’s $31 million claims for unpaid feeds “was not collectable.”
Eccles stated that the firm had “exhausted” all available possibilities and that it had to “take aggressive steps to place Basslink in the best possible position to navigate through these problems.” He went on to say that the “interconnector is still operating effectively and reliably.”
Representatives from Ernst & Young have been appointed as voluntary administrators, while KPMG has been chosen as the recovered and manager.
To inform the next steps, EY will conduct a study and evaluation of Basslink’s activities.