October 2026

Australia’s most spectacular infrastructure cost blowout has reached a new level of absurdity, with the latest revelations about Snowy Hydro 2.0 suggesting the total bill could reach $50 billion.

That’s 25 times the original estimate of $2 billion, announced by then Prime Minister Malcolm Turnbull in 2017. And, astonishingly, there is still no certainty the project will be completed successfully.

The latest revelations provide further evidence of the extraordinary failures in planning, cost control and project management which have plagued this development.

Snowy 2.0 was originally supposed to cost $2 billion and be completed by 2021. Nine years after its announcement, the project remains less than three-quarters complete, its official construction cost has reached a potential $25 billion and completion has been delayed until late 2029.

And that $25 billion estimate doesn’t include the massive transmission infrastructure needed to make the project operational.

Veteran financial commentator Robert Gottliebsen, writing in The Australian, estimates that the transmission requirements could add another $20 billion or $25 billion. He believes the ultimate bill could therefore exceed $50 billion.

That’s an extraordinary amount of public money for a project which is essentially a giant battery, storing electricity generated elsewhere rather than creating additional energy.

Even more disturbing is the revelation that the project is expected to deliver only $7 billion in wholesale electricity price savings over 45 years – as reported by The Australian on 23 October, based on modelling commissioned by Snowy Hydro.

Of course, wholesale electricity savings are not the project’s only potential benefit. Energy storage and grid reliability also have value.

But the figures raise serious questions about whether Australians are getting anything approaching value for money.

And the problems go well beyond cost. The giant tunnel-boring machine “Florence” became stuck underground for 11 months in 2023, a spectacular example of the geological problems confronting the project. Another machine, known as “Monica”, has been commissioned to tackle the particularly difficult 800-metre Long Plain Fault Zone. Gottliebsen warns that failure to penetrate this geological obstacle could threaten the entire project.

Meanwhile, workplace disputes, labour shortages, safety incidents and allegations of contractor under-performance have contributed to the ongoing difficulties. The Australian Financial Review reports that more than 1,000 tunnel workers have participated in strikes and walkouts, with some earning over $300,000 annually.

They also report criminal proceedings initiated by SafeWork NSW against contractor Webuild over workplace safety incidents. Webuild denies the charges.

Perhaps the most alarming aspect is the handling of construction contracts. When the original fixed-price arrangements became unsustainable, the Federal Government oversaw a contractual reset in 2023, shifting substantially more financial risk to government-owned Snowy Hydro.

An audit released in June found that Snowy had assumed the cost risk without effectively holding the contractor accountable.

Snowy Hydro chief executive Dennis Barnes has acknowledged that inadequate initial designs contributed significantly to the escalating costs. Former Snowy boss Paul Broad has disputed aspects of that explanation, blaming substantial contractor underperformance.

Predictably, the political finger-pointing continues. The Federal Government blames the Coalition for inadequate initial planning. The Opposition blames Energy Minister Chris Bowen for the subsequent contractual arrangements and has demanded his dismissal.

No one is accepting responsibility. But neither side can escape the documented history of escalating estimates, missed deadlines and inadequate cost control.

This project also creates serious questions about energy security. Snowy 2.0 is now scheduled for completion after the planned April 2029 closure of the Eraring coal-fired power station, potentially leaving a significant gap in NSW electricity supply.

Energy Minister Bowen maintains that finishing Snowy 2.0 is the responsible decision and that abandoning it would undermine reliability and increase electricity costs. That’s an argument which deserves examination against the alternatives, particularly given the billions still required.

Australia has developed an appalling record of major infrastructure projects suffering enormous cost overruns and years of delays. Snowy 2.0 is an outstanding example of the problem.

Governments announce grand projects with attractive price tags and ambitious deadlines, before the engineering, financial and construction realities become apparent.

Then the costs escalate, deadlines disappear and taxpayers are expected to finance the consequences. But no one is held accountable.

The original promise was $2 billion and four years. The emerging reality is potentially $50 billion and more than 12 years.

And Australians are still waiting to discover whether this extraordinary expenditure will deliver the promised benefits.

That’s not a record any government should be celebrating.