It seems that the dire predictions of a truly massive blowout in the costs of the controversial Snowy 2.0 pumped hydro project must be close to the mark.
Snowy Hydro has huffed and puffed about the speculation, and expressed its outrage that analysts and critics should throw in cumulative interest and transmission costs. But it is clearly feeling the pinch, so much so that it now has invested in expensive advice to provide an answer to a question that no one is really asking.
What now seems clear is that a project once touted by former prime minister Malcolm Turnbull as a $2 billion no-brainer investment has now blown out to around $20 billion ($40 billion if you add in the interest and transmission costs), precisely because not enough brain power was applied to the details of such a vanity project at the start.
The costs have already blown out once to $5 billion, which Snowy Hydro has argued should be the starting point because it is when the construction contract was signed, and then in 2023 it blew out to $12 billion after a “reset” under the new management team.
Last October, it announced it faced another big blowout in costs, but said it needed nine months to get its contractor to go through the project, line by line, to find out exactly how much.
