EXCLUSIVE: The team behind Snowy Hydro 2.0 is preparing for a staggering escalation in costs, exceeding ten times the initial budget, as the expansive project is delayed by seven years.
During a visit by 9News to the Snowy 2.0 site, a significant milestone was achieved: the tunnel boring machine (TBM) named Eileen successfully broke through into a cavern, completing her challenging six-kilometer stretch underground.
Meanwhile, TBM Florence, which notoriously became immobile for 11 months merely 150 meters into its journey, has now progressed seven kilometers into its planned 15-kilometer route. Project director Dave Evans is optimistic that it can achieve a pace of 90 days per kilometer for the remaining distance.
“Building such a substantial power station deep underground presents logistical challenges, but overcoming them is our mission,” Evans explained.
“The infrastructure we’re constructing is designed to endure for 150 years, making it a lasting legacy,” he added.
In total, the four TBMs have successfully tunneled through 19 kilometers of the project’s intended 27-kilometer network.
When completed, Snowy 2.0 promises to be Australia’s biggest battery, storing the equivalent of 26 million home batteries by using excess solar and wind energy to pump water into the upper Tantangara reservoir for release when power is needed.
9News visited the enormous cavern nearly one kilometre below the surface that will house a six-turbine generator.
The 200-metre-long cavern is big enough to fit the Sydney Opera House and at 67 metres tall could comfortably fit the Leaning Tower of Pisa.
But the spiralling cost of Snowy 2.0 remains problematic.
The projected cost escalated to $6 billion, then lifted to $12 billion in 2023, with Snowy Hydro chief executive Dennis Barnes conceding this figure will be exceeded and the completion date pushed back to late 2028.
“We’re not going to get it done for $12 billion so we’ve asked our contractor to do a line-by-line assessment, which they’re due to complete in the next couple of weeks,” Barnes said.
9News understands the project’s latest price tag will be about $22 billion – 11 times the original estimate.
Barnes defended the blowout, saying the project was “one of the most complex engineering projects underway in the world” that demanded millimetre precision in a remote part of Kosciuszko National Park.
“The announcements in the early days were all pre-feasibility stage,” he said.
“Obviously, as you do more, you learn more. And progressively, over the last 10 years or so, we’ve gone through a few stages where we’ve understood more.
“Although there was the famous $2 billion by 2021 announced, no work had been done at that point.
“When we got to about 40 per cent of the way through the project, three years ago, we reset the project. We said when it was going to finish, and we said how much it was going to cost. Now, some of those have proven wrong, but until you do the work, you don’t really know.”
One of the major financial pressure points for the project is labour and associated logistical costs such as fly-in fly-out arrangements, accommodation and meals.
Workers on the TBMs are paid more than $300,000 under two weeks on, one week off arrangements.
Last week, Finance Minister Katy Gallagher said the Albanese government was committed to the project, notwithstanding the fact that the “incoming government had to deal with the consequences of that poorly scoped, poorly designed project”.
“It is a huge, massive infrastructure undertaking and it has encountered several challenges that were not understood at the point that that project was approved by the former government,” she said.
“We’re working through all of those issues, as you’d expect.”
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