Snowy 2.0, which will enrich the existing Snowy Mountains hydro-electric scheme, may now cost up to $25 billion, having originally been priced at $2 billion when first proposed in 2017, according to a new reassessment.
Its original completion date of 2021, already well out the window, has also been pushed back another year to late 2029, Energy Minister Chris Bowen and Finance Minister Katy Gallagher confirmed in a joint statement on Friday.
"It's alarming for Australian taxpayers that there's a cost blowout now being officially recognised by the government," Nationals MP Darren Chester told ABC Radio on Friday.
The new price tag includes a $2.8 billion buffer on a new cost target of $22.2 billion, which Snowy 2.0 chief executive Dennis Barnes said was down to estimation difficulties due to the project's complexity.
"The ability to estimate the size of this project has been challenging, given the complexity and the scale of it, so we have now allowed what I believe to be a reasonable contingency," Mr Barnes said on Friday.
"40 kilometres of tunnels, caverns that can fit the Opera House in one kilometre underground in the national park - it's incredibly complex."
Proposed under former coalition prime minister Malcolm Turnbull, the scheme is expected to play a key role in Australia's clean energy transition by helping store excess power generated by wind and solar, with Labor determined to press on amid growing calls to throw in the towel.
"Completing Snowy 2.0 remains the responsible course ... abandoning the project would undermine grid reliability, scrap 5,000 jobs and lead to higher bills," ministers Bowen and Gallagher said in their statement on Friday.
They pinned the new higher price tag on the "immaturity" of the project's design when they inherited it from the previous coalition government, which they say exacerbated geological challenges posed by the Snowy Mountains' hostile geography.
Mr Chester criticised Labor laying blame elsewhere for the cost increases.
"At what point does a statute of limitations on blaming previous governments come into effect?" he said.
"Continually blaming the previous government when you've been in power for four and a half years is getting a little bit ridiculous."
In their statement, ministers Bowen and Gallagher flagged additional government oversight on Snowy 2.0, which experienced a "reset" in 2023 involving a renegotiation of the agreement between Canberra and Italian contractor WeBuild.
The overhaul shifted the project from a fixed-cost to a "cost-plus" model which put Snowy 2.0 on the hook for blowouts but beefed up incentives to deliver the project under target.
The reset came with its own heftier price tag of $12 billion, which has now almost doubled.
"If it's that hard, the Albanese government should stand aside and let the adults come in and run these projects," Mr Chester said on Friday.
"That (cost-plus model) basically put all the risk on the taxpayers, and any delays or increases in costs are worn by taxpayers."
Project boss Dennis Barnes, who was parachuted in during 2023's reset, said progress since then had been good despite the extra expense.
"In 2023, we were achieving in the order of 0.2 per cent of progress a month, and we're now achieving 1 per cent of progress a month," he said.
"That's a big difference."
Tunnelling work is 65 per cent complete, according to the latest update.
Mr Barnes said backing away from the project would leave a gaping hole in Australia's revamped energy grid.
"Renewables, solar and wind, backed by pumped hydro, gas, and batteries, is the cheapest grid of the future ... it's sort of inconceivable to me to picture a grid without Snowy 2.0," he said.
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