Bernardi right about Snowy 2.0 cost blowout

Australian Conservatives Release

Conservative Party leader Cory Bernardi has been proven right again after news that the Federal Government’s Snowy 2.0 project faces a significant cost blowout and delay from the original estimate detailed in a feasibility study a little over a year ago.

In April last year, Conservative Party leader said, “The Snowy 2.0 project is another boondoggle that will waste taxpayers’ money. They would do better to stop all government subsidies for energy generation, slash red and green tape and provide contractual and operational certainty for new entrants wanting to build a power station – be it gas, coal, nuclear or renewable”.

  • Snowy Hydro’s original feasibility study forecast a range of $3.8-to-$4.5b with generation phased in between 2024 and 2025
  • Snowy 2.0 will now cost at least $5.1b and take eight years to build, according to the winning contractor

The ABC reports, major Perth-based construction and engineering firm Clough confirmed it had been awarded a $5.1 billion contract with its Italian joint venture partner, Salini Impregilo, for the civil and electro-mechanical works for the Snowy 2.0 Project.

“The value includes future escalation of prices through the eight years of the project,” Clough said.

This is 35 per cent higher than the costliest outcome of $4.5 billion tabled by the Snowy Hydro feasibility study in December 2017.

It is also 60 per cent higher than the $3.8 billion at the bottom end of expectations and more than 150 per cent higher then the original guesstimate of $2 billion made by former prime minister Malcolm Turnbull in early 2017.

However, unlike the feasibility study, the contract includes fixed, inflation-based escalation costs, which should in principle, provide a degree of certainty about the final cost.

Senator Bernardi told Chris Kenny on Sydney radio station 2GB that politicians rely too much on emotion and not on the facts when it comes to energy policy.

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