Why Snowy Hydro’s $25 billion cost blowout is a warning sign for other megaprojects
From the $93 billion High Speed Rail project to Melbourne’s Suburban Rail Loop, Australia needs a better approach on megaprojects – or history will keep repeating,
Snowy 2.0, Australia's largest renewable energy project, is set to cost up to A$25 billion, more than 12 times the initial estimate of $2 billion, and won't be completed until late 2029. This unexpected cost increase should serve as a warning sign for other multi-billion-dollar infrastructure projects, including the national High Speed Rail project and Melbourne's Suburban Rail Loop.
The project aims to function as a giant battery, storing renewable electricity and generating power when demand is high. While the federal government is committed to finishing Snowy 2.0, critics argue that the project was approved before fully understanding the risks and costs. The opposition has also criticized the change in funding, which means taxpayers now bear more of the project's risks.
However, the real issue lies in approving projects without a thorough understanding of the associated risks and costs. Australia has a poor track record of delivering megaprojects on time and within budget under both Liberal and Labor governments. A proper system to appraise, select, and independently validate the cost estimates of megaprojects is needed to prevent future cost blowouts.
Written by urgent.news from The Conversation AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
