GOVERNMENT BUSINESSES SCRUTINY COMMITTEE B
Wednesday 2 December 2009
Mrs Rattray-Wagner (Chair)
Hon. Graeme Sturges, Minister for Infrastructure
Mr Gary Hill, Head of Office
Mr Christian Attfield, Adviser
TT-Line Company Pty Ltd
Mr Denis Rogers AO, Chairman, TT-Line
Mr Charles Griplas, Chief Executive, TT-Line
Mr Kevin Maynard, Company Secretary
Mr Scott Hadley, Chief Financial Officer
TT LINE AVAILABILITY OF BOOKINGS
Mr FINCH - We did hear quite a bit about the change of schedule - 14 September was when you introduced the new times and schedule. It has been applauded in the tourism industry to take your peak season out by one month either end. That will create some better opportunities for people travelling. Does that bring on more daytime sailings? Is my understanding correct there?
Mr GRIPLAS - That is correct. We have a very strong philosophy, led by a very switched-on board in terms of where we want to see ourselves in the future. It is all about growth. If they ever crack the whip on us, it is when our numbers are not where they should be in the future. We have redesigned our pricing schedules and have gone out from three seasons to two, so we have peak and off-peak. The current changes to our schedule do extend our seasons. The number of sailings will go from 800 to 824, which pick on some additional day sailings over the period of January through to Easter. It sneaks into December but primarily it is around the January to Easter period. We are doing that for several reasons. Last financial year there was a collective madness in TT-Line to expand in a down market. We took a very conservative strategy that this was the time to grow and to not only get that volume but two other critical elements of our strategy were to ensure that the tourist operators remained in play, that we provided them with custom. At the end of the day there is no use travelling on the Spirit of Tasmania if you do not have an operator to accommodate, feed and entertain you. Secondly, in terms of our commitment to the freight market, we had those very clear strategies to grow both sectors. We wanted to grow market share, increase our capacity on the vessels and ensure that our vessel and schedule liability was spot-on so that we gave them that predictability. When we have our campaigns and sales, we know very clearly that when our figures start to increase, occupancy levels in the north and the north-west increase as well - I would even take credit for the east coast as well, and we are still working on Hobart - but we are certainly increasing the occupancy in those areas.
Mr FINCH - That new scheduling might have created problems for a couple of people - and I want to read some e-mails from them. Minister, I am happy to hand these over to you if you want to take them on and make explanations to these people and explain their situation. I am looking for an explanation of what might have occurred for these people and how that rescheduling and the way you do your freight and passengers might have impacted on them.
Mr STURGES - I will have a listen to what they are and then, if you care to pass them over and if there is any more information needed or work that needs to be done, we will have a look at it.
Mr FINCH - One e-mail says:
'When I came back from Qld last May I had to book 5 days later than I planned to travel. I was told that the boat was booked out completely up until then. I insisted on going on the waiting list because I wanted to get home earlier but was told no chance. I insisted on getting a waiting list reference number and even had to insist that they took my cell phone number so that they could ring me back if/when a cancellation came up. They obviously had no intention of doing anything.
To cut a long story short, I bulldozed my way onto the ferry. I was last car on, to find that on the deck that I was on there was one row completely empty. Enough space for about 30 more vehicles. I don't know about other decks but there may have been more space available there as well. I was told that there was a long waiting list. If that were the case then the ferry should have been full.'
That is from Tony Leitch. This is from Robert Grubb:
'We rang TT Line on 12/9 to try and make a booking for 21/9. We were told that was not available, so had to book for the 20/9 (or else nothing was available until 28/9). They told us we had been given "the very last cabin available". Buck then got on the 'phone and tried to make a booking for the same night,' -
this is the second person -
'but was told he could only get on 22/9 (even that doesn't quite add up). He asked them to put him on a waiting list for 20/9 - but didn't hear anything more.
We met up with a young German couple at our caravan park in Melbourne, and they told us they wanted to come to Tasmania the next week, and would spend about 3 weeks here. We advised that the ship was very busy, so they had better try to book straight away. They did, and could not get a booking until 28/9 (at least a week's tourist revenue lost to Tasmania ...
On the night we sailed, Robert spoke with one of the staff on the car decks and he was told the boat was only 2/3 full (and we could see there was considerable space left). We also noted that there seemed to be quite a few unoccupied cabins the next morning.
Buck sailed two nights later, and he was told the boat was only half full!'
So I am wondering how that confusion and that situation would occur between the clients, the booking and what was apparent to them when they were on the ship.
Mr STURGES - Madam Chair, just before the CEO responds, do these need to be tabled? We are happy to accept them. I would just like to confer with the Chair before a response is given. Bear in mind it is only the CEO's second appearance of course.
CHAIR - We will table them and we will provide a copy.
Mr ROGERS - My view on that is that we need to take those away -
Mr FINCH - That is why I checked with the people and whether they could be made available to you.
Mr ROGERS - I am grateful that you are making them available because that is the sort of information we need but it needs to be tested against our own records.
Mr FINCH - Yes, of course.
Mr ROGERS - Often one's perception of a half-empty ship or a half-full ship is different than what the reality is. So thank you for it; let us take it away and let us respond.
Mr FINCH - Okay.
CHAIR - Thank you.
Mr STURGES - So now they have been tabled, how will they be provided to us?
CHAIR - We will provide a copy to you.
Mr STURGES - They will come through my office? I need to understand how we are going to deal with this now because the Chairman and CEO have said they will respond. I just want to know how we will get them. Will they come through my office, Madam Chair?
CHAIR - Madam Secretary has indicated we will be able to get some copies so they now belong to you.
Mr STURGES - Okay, thank you.
Mr FINCH - We had some discussion looking at future timetables for replacing the present Spirits of Tasmania. Could I get some idea of what issues of maintenance and replacement of parts, particularly engines, need to be addressed between now and perhaps 2017? I believe that is the time when the present Spirits may be considered for replacement.
Mr GRIPLAS - It is not to do simply with vessel replacement, it is more to do with the safety and integrity of the vessel. We take that responsibility very seriously, which is why we have a very active maintenance campaign and put our vessels into dry dock every second year. We have a very extensive campaign where on a monthly and weekly basis we continually assess any of the technical or mechanical components of the vessel, and they are very clearly addressed.
On top of that, we are also audited by two external agencies: by ABS, which is a certification agency for any repair work that we do on the vessel; and by AMSA, the Australian Maritime Safety Authority, that come on board and test the occupational health and safety of the vessel. So on every aspect we deal with safety in a very clear and open manner. Safety is also reported directly to the board through our designated person ashore, who is the head of our marine operations. He sends a report to the board on a monthly basis, and outside of the month, if it is required. That report is not interfered with by anyone in management; it gets sent up unadulterated to the board where there are any considerations made, and they are quite extensive in terms of where our maintenance schedules are, the safety issues, and so on, and they are addressed. So we do it for other reasons than simply maintaining the vessels for 2017, but that helps as well.
Mr FINCH - Freight, of course, is a very important part of the TT-Line service. With the long-term predictions, will freight be even more important and will that freight component be considered in future vessel design? Is there an expectation now that you will need a vessel with a bigger capacity for freight, the same capacity for cars at this stage? Do you have a sense of that at this time?
Mr GRIPLAS - You know, it's really odd. I accidentally ran into one of our bankers at the airport -
Mr FINCH - With your car?
Mr GRIPLAS - We were quite disgusted at the service we got at the airport, but anyway, that is another commercial carrier.
CHAIR - You should be travelling on the ship!
Mr GRIPLAS - I know. In terms of looking at future forecasts it is very hard to predict anything going forward so trying to look at the economic environment and where it will be in two or three or five years time is a very difficult thing to forecast. Passengers and freight are both equally important to us and are a critical component to our business. But we have no idea where that would be in one year; we do not even know where the passenger market will be in April next year let alone the freight market by the end of December. So in terms of looking at any forecast going forward it is very hard to tell but we certainly work within the parameters that we have.
Mr ROGERS - There are no plans by the board to phase out either passengers or freight.
Mr FINCH - Okay, so maintaining current levels - is that the aim?
Mr ROGERS - No, we want the business to grow. The board's policy is, because the shareholders have instructed us, that we are to be a commercial organisation and, like all commercial organisations, the expectation will be that the business will grow. Our two main functions of business are freight and passengers and we will be looking at both those areas to grow.
Mr FINCH - Could I come back again to the extra scheduling and the daytime sailings that the flexibility of having two ships allows you, is that a way to increase the business for TT-Line and can that be maintained in light of safety concerns, or maintenance or the longevity of the ships?
Mr ROGERS - There is no evidence to date to suggest that it cannot be. As the CEO has just indicated, we have extensive maintenance programs, including the dry dock procedure, which is quite expensive. There is no evidence to suggest that will not happen. As a matter of fact, when I put the proposition to the shareholders that 2017 looked a date to aim for, my considered recommendation was that this will cost us more in terms of maintaining the vessels to get them through to that time. There is no thought about not being able to cope with those situations. The daylight sailings will be beneficial under the new Genesis booking system as well; that will create an opportunity for us. But to put it in a concise form again, our intention is to grow the business in both forms of our trade.
Mr STURGES - The maintenance program of the company is absolutely significant. I do not know if the member would like some information in relation to some of the maintenance upgrades that have been undertaken. In fact, I had the pleasure of going up to Sydney when one of the Spirits was in dry dock to have a look at what was going on, on the bridge, the other work that was happening below deck, work that was happening in the passenger amenity area and what have you. It is all about ensuring that we keep the ships properly maintained to attract growth in the business. The CEO might want to explain to you about what has happened below deck as far as extra capacity for freight is concerned. I have been up there and had a look at the loading arrangements of an evening and it is pretty spectacular to see how efficiently it operates and the capacity that they have.
CHAIR - We did know you had been up to visit, Minister; we did hear.
Mr STURGES - On more than one occasion, Madam Chair.
Mr FINCH - I want to talk more about the daytime sailings. It is a different style of travel and opportunity for tourists in particular, requiring different treatment of them, because the ones who come over on the normal sailing sleep overnight and the ones who come during the day have to be entertained. They are on the ship for between seven and nine hours.
Mr GRIPLAS - Yes, and we do have quite an extensive entertainment program for day travellers. In fact we use a local Tasmanian company called Creature Tales. So for the kids, you will have face painters and magicians. For the adults, you will have storytelling around Tasmania and its heritage and you will have performers on decks 9 and 10. We have also undertaken some refurbishment of decks 9 and 10 to put in some climate control and improve the access areas around the bars. In terms of the day sailings, you are correct, they do need a different focus from sleeping in a cabin. Decks 7, 9 and 10 will now become those areas for us. We have undertaken a refurbishment of those areas with new screens, bar facilities et cetera to keep them entertained and to create entertainment options far beyond what you would get on deck 7, for instance, for a night sailing.
Mr FINCH - Is it going to be difficult or is it accepted by the travelling public that the daytime sailings are a good option?
Mr GRIPLAS - Looking at the uptake, yes, it suits both segments. You tend to find that some travellers would go over on the day and come back on the night, or in the night and then the day. They will alternate between the two. But day sailings are very good. In fact, in terms of the uptake, they are quite popular.
Mr FINCH - With the new scheduling now, do you have day sailings there locked in on a regular basis on a schedule?
Mr GRIPLAS - Yes, we have and information on those days of travel is available on our web site. Those double sailings that we referred to will occur on a Thursday, Friday, Sunday and Monday. So, you can pick them up. You are starting to see as well a trend that people just want to leave work on a Friday, take off and then come back in the middle of the following week, so they get that weekend in between. So we are catering for that end of the market as well. We just do not create the essentials because it suits our marine operations; we create them because there is a market demand for them.
Mr FINCH - Do freight shifters like the idea of the daytime sailings as well?
Mr GRIPLAS - They are a bit harder to move. They prefer the night-time sailings because they fit in with their supply chain. But we believe if we provide them with an alternative and a product offering for the day, they can then shift the less time-sensitive cargo during the day, as opposed to during the night.
Mr FINCH - In previous years we have looked at risk management in our GBEs and the Auditor-General was critical some years ago on this subject. Are you confident that the present risk assessment system is in place and functioning well?
Mr GRIPLAS - We have quite an extensive risk management system that is audited by KPMG on an annual basis. The basis of that report then sits with management; we would workshop those risks and develop contingency plans around that. That is then presented and discussed and signed off by the Audit Committee and by the board subject to their recommendation. Risk management is quite extensive and we take every aspect of those matters seriously.
Mr FINCH - Thanks very much.
RESTAURANT SERVICE AND QUALITY
Dr GOODWIN - One of our members was aware of a complaint about the food in the restaurant on board -
Mr FINCH - The Weekend Australian.
Dr GOODWIN - Yes, apparently it was quite a negative article and I am concerned, after having experienced such excellent food on board, about the impacts this negative article in the Australian may have. Do you have any plans to try to address that article?
Mr ROGERS - That matter was referred to me and we take it very seriously, although I must say that none of what was reported in that article was confirmed in any shape or form by our customer satisfaction surveys. Nevertheless, despite that, we have appointed a new hotel services manager and I already know the CEO and the new hotel services manager have already talked about it. He starts with us on 4 January so that is already high on their agenda, but I repeat that none of our customer satisfaction surveys confirm what the food writer wrote. It is not to say he is wrong and I am not saying that we should not take it seriously, as we have, but it is one of those things that we will look at.
Mr STURGES - What did you guys think of the food? I am serious because I have talked about it, too, with the Chairman and the CEO, and naturally from a government perspective we are concerned.
Mr DEAN - It was well presented and the staff were absolutely wonderful.
Mr FINCH - I did have an e-mail from somebody I saw on the boat that night and I asked them to send me some information. 'Sue's meal in the Seasons Restaurant - the spatchcock was dry and overcooked. Greg's meal - he was happy with the Mediterranean lamb. The dessert of Tasmanian berry icecream was lovely' so I suppose that balances out. It is very difficult to get every meal and every course right but I thought that the environment in which we had our meal in the restaurant was outstanding, and the service was very, very good. That situation I am talking about could happen anywhere, according to the vagaries of their own taste and what they expect of a meal.
Mr ROGERS - Quite right.
Dr GOODWIN - Mr Dean, you had the spatchcock.
CHAIR - I will remind members that it is a question and answer session.
Mr DEAN - I will do that because it was also raised by Tourism in Melbourne that there are such opportunities in Tasmania and that people now want to attend, and to take their own equipment, their own boats et cetera.
Mr FINCH - Understandable.
Mr DEAN - It is an area that they say we ought to be looking at and considering.
Mr STURGES - Might I say to the member that any opportunity I get to obtain funds from the Federal Government I will take.
Mr DEAN - Good on you.
Mr STURGES - So I look forward to receiving that representation from your office.
Mr FINCH - Yes, these were particularly fishers who come for bream fishing. That was the report that we heard, and they would like to bring their own gear but it is just too prohibitive cost-wise to use the TT-Line and bring their own gear, so subsequently they do not come to Tasmania.
Mr STURGES - I understand and I would be more than prepared to make representation, without giving false expectation that it is going to be an easy one to win, but I am always happy to knock on the door of my Federal colleagues for dollars.
Mr FINCH - Thanks.
QUALITY OF STAFF
CHAIR - Before we move on, I just want to set the record straight. I did use a stakeholder's name earlier, but I want to add that that stakeholder was also very complimentary of the TT-Line and of the 80 members of that organisation. Only 30 put forward any issues at all, so that is a pretty good reflection of what the TT-Line is doing for tourism and that organisation.
Mr FINCH - Madam Chair, he also made the point that he had a lot of reports about people phoning in to TT-Line and he thought that the staff were very good and exceptional for their knowledge and their responses to requests. He is somebody involved in the tourism industry.
Mr GRIPLAS - They are great ambassadors for Tasmania. Can I say I am very proud of our staff - they are brilliant.
CHAIR - I just wanted to clear that up.
PORT OF MELBOURNE
Mr FINCH - Just on that subject, if I could, please, I am curious about the leasing arrangement with the Port of Melbourne and the operation there. What is the status at the moment, and could it be improved?
Mr GRIPLAS - The status in terms of the lease terms?
Mr FINCH - Yes.
Mr GRIPLAS - The current lease is to 2012 with a five-year option to extend that to 2017. We are in a heritage-listed building, which creates a lot of issues in terms of what you would like to put into play. We have cleaned up that terminal dramatically; we have removed airconditioners and we have improved toilet amenities. We have put some screens in there as well. We have been actively engaged in discussions with Port of Melbourne but we are also talking long term. There have been a lot of issues considering the iconic status of the Spirit of Tasmania and how we provide public access, and a whole series of things. There is active engagement such as you would have with your landlord.
As well, on the other end of Station Pier the international cruise terminal has brought some additional benefits for us in terms of the terminal upgrades and the improvements that we have been able to achieve as well.
Mr DEAN - So the heritage listing is the reason you cannot put a covered-in area for pedestrians. That was a concern that was raised with me by a number of people. We got through by ducking showers when we were there, but -
Mr STURGES - What, raining in Melbourne?
Mr DEAN - Yes.
Mr STURGES - That is unusual.
Mr DEAN - So obviously you will not be able to get a covered area for pedestrians to walk through?
Mr GRIPLAS - No, unless they change the rules around heritage listing and in terms of the encroachment of the architectural design.
Mr DEAN - Because it is much longer than the one in Devonport, I think.
Mr FINCH - With your observations in respect of the Port of Melbourne operation from Station Pier, is that the ideal home for TT-Line? Is there a better pier that might be available? Is that something you might consider?
Mr GRIPLAS - Devonport is our home and Station Pier is our home.
Mr FINCH - So you are quite happy to maintain that relationship with the Port of Melbourne?
Mr GRIPLAS - Yes. If you look at their 2035 strategic plan, we are clearly in Station Pier.
Mr FINCH - So, we are out to 2017, and then there is another five-year option?
Mr GRIPLAS - No, 2012, with a five-year option to 2017.
Mr FINCH - Would the board be actively looking to increase that or negotiate it? Are we in a negotiating time with the Port of Melbourne for that lease?
Mr ROGERS - No. There is a lot of water to flow under the bridge in relation to ship replacement - 'ship' meaning plural ships. We will get to that as we progress the ship-replacement program - it is not coincidental that 2017 applies in both instances. We clearly understand the Government's position with Devonport and that is something we have to deal with. Station Pier will come into focus more as we work through our ship-replacement program.
Mr DEAN - Five years is only a short term for the business we are conducting, isn't it?
Mr ROGERS - It is not five years from now, it is 2009 now so there is enough time. We will know well before 2017 what our ship replacement will be.
Mr FINCH - Mr Rogers, are you actively working on the ship-replacement program now?
Mr ROGERS - We are.
Mr FINCH - It is that moveable feast of what is happening from year to year and the competition.
Mr ROGERS - You know a lot about it and it is. I think I may have said here that one of the things that was worrying us was about an eight- or nine-year lead time to get a new ship built. I can tell you it is much less than that now because the shipyards are empty.
CHAIR - That is our information, that you can get your new ship a lot sooner now.
Mr ROGERS - What form that ship - meaning ships - takes remains to be seen.
CHAIR - Is there an opportunity to exchange one over and leave the other one, or is that not an option?
Mr ROGERS - Nothing is ruled in or out. We are not far enough along the road yet.
CHAIR - Is one in better shape than the other?
Mr ROGERS - No. That is a fundamental issue that I raised with the shareholders when we put that date in place of 2017. It was to ensure that both those ships were maintained at the appropriate level, and same level.
Mr STURGES - In relation to the ongoing maintenance program, I know we have spoken about it and I will not dwell on it too much, but I am very heartened as a shareholder to be advised of the very high quality of maintenance in which the ships are currently maintained.
MARKETING AND SALES PEOPLE
Mr FINCH - If I can just ask about salespeople - marketing people within Tasmania and the work that goes on to communicate with our tourism operators and to keep them embraced with TT-Line. How many do we have and what does their work entail? You might care also, Mr Griplas, to tell us about those marketing and salespeople that you have on the mainland as well.
Mr GRIPLAS - Our sales staff engage very actively; they do hit the roads. They are out there attending everything from regional travel shows all the way to engaging discussions with commissioned agents, travel agents. We also work very closely with a lot of the authorities such as convention centres and bureaus et cetera. We also have a special groups area within our organisation that go and target large events and large travellers on our vessel. We engage at all different levels. In terms of talking to the tourism industry I have a very active engagement through the TICT because we sponsor the tourism awards as part of our sponsorship of TICT. We openly discuss future strategy campaigns et cetera. As many tourism conferences that I am able to attend and present at I do, but your time is limited with that. We also talk to the NRMA, the RACV and do deals there. Where we target is very much an open game but it is a very specific target audience that we go after. It has to meet our demographic group, our particular geographical spread et cetera; we do not just do a scatter-gun approach.
We also have a direct marketing unit and we sent out many hundreds or thousands of direct mail. We have our frequent traveller group that we engage with in conversation. In our direct mail campaigns we provide specials for people who we know are regular travellers on our vessels, to those who book in early et cetera. We certainly have a very active engagement with our customer base.
Mr FINCH - Can you tell me something about the numbers? Obviously you are sales oriented with your thinking but I am wondering if you have numbers of how many people you actually have and are they on the ground in Tasmania, do they make contact with our tourism operators?
Mr GRIPLAS - Yes they are. You are looking for how many people we have on the ground?
Mr FINCH - Yes.
Mr GRIPLAS - Out of that unit we would have six people that would be spread across Tasmania and the mainland. Their reach is as far as regional New South Wales and Queensland, all the way through to Victoria, metro and regional, and South Australia and the State island of Tasmania.
Mr FINCH - So they are doing the sorts of things you were talking about, trying to go to conventions and dealing with travel agents and talking to people?
Mr GRIPLAS - Our sales representative, whose area covers regional New South Wales and Queensland, regularly appears on local community radio promoting the Spirit and Tasmania as well. I think that he enjoys that part of his role - a very active engagement there.
Mr FINCH - So tourism operators in Tasmania from time to time are likely to have somebody knock on their door and talk to them about TT-Line matters.
Mr GRIPLAS - Yes, they are. For instance, we recently ran a joint promotion on the mainland in the RACV with the cabin and caravan sector. It is that type of engagement that we seek and go for and then we are able to track it and measure our sales performance. When we engage with them again we know what follow-up promotion is needed.
Mr ROGERS - There was another promotional thing too where we invited Tasmanian operators to join us on the ship in Melbourne -
Mr GRIPLAS - An open day, yes.
Mr ROGERS - An open day where several thousand people turned up and Tasmanian tourism operators were well and truly represented and they reacted very positively to it, but I cannot remember all the detail of that.
Mr GRIPLAS - Mr Finch, I can give you the numbers of direct mail pieces; 525 000 direct mail pieces were mailed out. We executed direct marketing campaigns and the open day attracted over 8 000 people and 50 tourist operators. Also, the company was represented at more than 40 consumer and trade shows through 2008-09 attended by more than $1.2 million consumers.
Mr FINCH - So that was in Melbourne?
Mr ROGERS - No, the open day consisted of Tasmanian tourism operators.
Mr FINCH - Where were they? In Devonport or -
Mr ROGERS - No, we took them to Melbourne at our cost -
Mr FINCH - I see, from Devonport.
Mr ROGERS - so they could meet their potential customers, and 8 000 went through the door.
Mr FINCH - Thank you. That involvement of your Tasmanian tourism operators gives them then that sense of ownership and link to TT-Line.
Mr GRIPLAS - Also our web site was visited by 1.19 million visitors, so that is a very active web site.
Mr FINCH - Was that over a 12-month period?
Mr GRIPLAS - Over the financial year - 1.19 million visitors to our web site.
Mr FINCH - Okay, thank you.
Mr DEAN - When I was covering reservations before and the call centre and the online services, I think you said about 30 per cent were coming through online.
Mr GRIPLAS - About 19 per cent and we have started to increase that to about 30 per cent.
Mr DEAN - What about the position with the tourism centres around the State? Do you get many bookings through there now? Is that waning?
Mr GRIPLAS - No, it is really that consumer preference now. They would rather go direct to your web site as people now would go to a webjet or a wotif or whatever. People are very Internet savvy in sourcing out the best deals. People would directly come to us on our web site. Many years ago we used to do travel packages and all sorts of stuff. People now are far more savvy than that. They would rather buy their air fare from webjet, for instance, or they come direct to us. They go to wotif to get their hotel accommodation, they would probably go to another site to book in Treetops day out or Bruny Island. People don't necessarily go to one agent or one web site to book everything, they like that flexibility of the chopping and changing so we have to cater for that.
Mr DEAN - Do you still send your marketing people around these tourism centres throughout the State on a regular basis?
Mr GRIPLAS - Yes we do. I could not be precise and tell you how often they meet with them but they are out there on a regular basis. For instance, Tourism Tasmania last month were with us in Melbourne discussing our campaign strategy and we returned that visit in fact this week. We sat there talking about future promotional activity. We do have an engagement at every level for the tourism sector; there is not one sector that we will knock back. I will talk to anyone, Mr Dean.
CHAIR - I want to move on to the corporate governance. I note the annual report talks about the board having appointed KPMG to conduct a performance review, Mr Rogers, and it was to be completed in October 2009. Can you give the committee some feedback about that review?
Mr ROGERS - I wanted the minister and the shareholder to know that the board which they have engaged was operating efficiently and effectively, and you just cannot conduct a review by yourselves, it is a bit in-house.
CHAIR - It seems like a good idea, though, doesn't it?
Mr ROGERS - It is not a good idea really. We went out to tender and sought at least three tenders and KPMG Tasmania were the selected tenderer in a fair competition. The person responsible conducted that review over an extended period of time by questionnaire and questions. There were two face-to-face meetings with the board of directors. We also included in that three senior management positions - the CEO, the CFO and the Company Secretary - because we were anxious to get senior management's view on how they thought the board was operating.
I am delighted to say that the results were outstandingly good and it reinforced our view for a long time that when you seek out people by skill to sit on a board like that of TT-Line, for example, you just have to have a marine expert sitting at our board table. We just have to. It is as well to have a commercial lawyer, a commercial accountant and a marketing person, if you can. So, when we restructured the board in 2005-06 that is what we set out to do, and I am very pleased with the result of that independent assessment.
Mr STURGES - And a tourism operator.
Mr ROGERS - Yes, and a tourism operator.
CHAIR - Are those areas that you identified all covered with the people that are represented?
Mr ROGERS - Yes, except marketing. We do not have a marketing expert.
CHAIR - Can I take it from that that in the next appointment to the board we will be looking for some expertise in marketing?
Mr ROGERS - No, you cannot take that because we would never sacrifice our marine expertise. If one of our marine experts left now we would replace that person with a marine expert, preferably an ex-sea captain. That has always been the history of the TT-Line. You might remember Captain Ross. He was director of the company for years and we replaced him with Dr Jeff Hawkins, who is a retired sea captain but a young sea captain. He just recently, as a matter of interest, won an Australian export award for the company he operates as Pivot out of Launceston.
CHAIR - What was the cost of that review?
Mr ROGERS - The cost was $10 000.
CHAIR - And that will be conducted in another two years?
Mr ROGERS - We will do it every two or three years because it is absolutely critical that the shareholders know that the board is operating effectively. Getting that independent review done is the best governance check of all.
Dr GOODWIN - Just a related question: how long is the term of the board members and can they be reappointed?
Mr ROGERS - The Government now has a very rigorous replacement program that is chaired by the Secretary to the Treasury. He is assisted by, in our instance, Dr Michael Vertigan. They have engaged a recruitment firm and the chairman of a respective board sits on that committee except when that person themselves is up for election so there can be some first-hand information given to the committee. That then goes on, whatever the recommendations are, to Cabinet and then to the AGM of the organisation. TT-Line has been through that process where two of us have been reappointed as directors. It was approved by Cabinet and then went on to the AGM, the two shareholders agreed to those appointments, along with reappointing the Chairman.
Mr STURGES - And may I say congratulations to the Chairman for being reappointed again for another term.
Mr ROGERS - Thank you. It is a very rigorous and transparent process and is quite independent of any other influences, if you get my drift.
Mr STURGES - A minor matter of technicality, if I may, just for the record. Cabinet does not approve appointments, they endorse, and then the shareholders through the AGM.
Mr ROGERS - I was saying that, Minister, to ensure that we got the process right.
Mr STURGES - It is a very rigorous process and just for the record I wanted to get that corrected.