Snowy Hydro CEO Issues Apology for Cost Overruns, Assures Long-Term Benefits for Australians

Snowy Hydro’s chief executive, Dennis Barnes, has apologised for the project’s six-fold cost blowout, saying that previous estimates were made prior to his tenure and that Australians will see a return on investment.

Speaking to ABC radio on Sept. 1, Mr. Barnes, who was appointed to the role in February, said there were four factors that led to the two to $12 billion cost blowout.

“It was the mobilisation of people—the project staff had in 2020 … inflation on people, steel, materials, shipping … an investment decision, which weren’t properly designed out … and of course the famous Florence tunnel boring machine has been stopped for a while,” Mr. Barnes said.

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“So we have encountered some geology which has challenged us.

“Obviously (we’re) very disappointed in the cost increase, and of course, we apologise for that.”

Former Prime Minister Malcolm Turnbull announced in 2017 that the project would cost $2 billion and be completed in 2021. That has now been adjusted to cost $12 billion and December 2028.

The CEO said he was confident there would be no further cost blowouts, but admitted that there were “no guarantees.”

“I’m very confident $12 billion by 2028 is a good target for us to achieve,” he said.

“Of course, we could encounter other problems but we’ve done an awful amount of work, which is really rigorous work.

“We’ve learned a lot in the 40 percent of the project we have completed. So it gives me a degree of confidence.”

Mr. Barnes added that while he was disappointed with the cost increase, he said that the project is an investment that Australian taxpayers will get a return on.

“One thing to consider with Snowy Hydro [is] that we are an investment by the Commonwealth government—we’ve paid $2 billion in dividends in the last 10 years, and $1 billion in tax.

“So the way the energy transition has played out, the Snowy 2 project has actually got more valuable.”

Project Hampered by Soft Ground

In May, the NSW Department of Planning and Environment



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