Time to Cancel Snowy Hydro

The $100-$200 million tunnel-boring machine known as Florence has been bogged in muddy water on soft ground for a year.

I followed up on previous estimate questions, where I was categorically lied to by bureaucrats who were trying to cover up this expensive and embarrassing disaster.

Why is the government allowing executives from the Snowy Hydro Authority to deliberately mislead the committee about the main tunnel being blocked by a boring machine that has not moved in a year? Why did Snowy 2 executives and the government cover up the toxic gas in the tunnel that is coming from the chemicals used to unsuccessfully free Florence?

The cost has now blown out to $12 billion, with another $5 billion needed to carve a 50 metre wide easement through the Snowy Mountains National Park. This is to build transmission lines to take the power into the grid and to upgrade, to carry 2200 MW of power for 20 minutes in the morning and evening peak, which is all Snowy 2.0 will generate.

I look forward to receiving the answers to my Questions on Notice for the Minister.

Transcript

Senator ROBERTS: Thank you for being here again today. Mr Whitby, in the November 2022 estimates, I asked you:I note that the tunnelling machine Florence was bogged up near Tantangara Reservoir. Can you confirm how long it was bogged and confirm that it’s now back in operation? The answer you gave was: The tunnel-boring machine hasn’t been bogged. It encountered soft ground, which we expected. We have been progressing the tunnel-boring machine through that zone with care and diligence. In February 2023, I was reassured Florence was not bogged, and, in May 2023, was advised it would progress shortly. Minister: today, the ABC published photos of Florence clearly in mud and water in a story that says it was flooded in and unable to function from the moment it hit the soft ground a year ago. It moved a matter of metres. Further, the article goes on to say Snowy Hydro authority knew it was bogged even as they testified in senate estimates that it was not. The authority was covering up the machinery to progress Florence. A slurry machine that lays down a base for the machine to travel over was not ordered when the waterlogging was discovered. It was only ordered when Florence became bogged. Why is the government allowing the authority to deliberately mislead the committee?

Senator McAllister: Thank you for the question, Senator Roberts. I don’t quite recall the evidence being provided in the terms that you suggest in your question. But I confess I don’t exactly remember all of the
testimony that was provided at all of the estimates. I will invite Mr Barnes to respond.

Senator ROBERTS: Minister, before you do, were they lying to you? When did you know about the machine being bogged?

Senator McAllister: I will take that on notice. You will understand that I don’t have all of the communications between the authority and shareholder ministers, so I will see what I can provide.

Senator ROBERTS: I would like to know when you found out the machine was bogged, if you made inquiries beforehand, were they lying to you, and whether or not you were misled.

Senator McAllister: I will take those questions on notice.

Mr Barnes: Obviously, there are many engineering terms, but bogged, paused or stuck, all have subjective definitions. There has been no point since Florence encountered this incredibly soft and wet ground in November 2022 that the machine has not been able in some way to move forward. In fact, as part of its stabilisation and commissioning of the slurry treatment plant since December 2022, it has in fact moved 10 metres as part of that activity, so it is not bogged; it is able to move. In May I apologised for my perhaps optimism regarding the ability to get Florence moving at pace again. The full story on the slurry treatment plant is that Florence is going to hit what we know to be naturally occurring asbestos about seven kilometres into its journey.

Senator ROBERTS: Naturally occurring what?

Mr Barnes: Asbestos.

Senator ROBERTS: Do you mean naturally in the strata?

Mr Barnes: Yes, and the slurry treatment plant is designed to handle those conditions. The incredibly soft ground it hit early in its journey was not predicted at that stage, so the slurry treatment plant, which was always
envisaged—just not envisaged that quickly—was ordered and started to be designed as early as December 2022. It is now complete, commissioned. Once we receive an approval from the New South Wales Department of Planning and Environment, we will be able to move forward.

Senator DAVEY: I agree with your recollection, Senator Roberts. Mr Barnes, you spoke in May about the fact that the slurry treatment plant was coming. I took it from that evidence that it would be activated sooner
rather than later, but are you saying it still hasn’t been turned on?

Mr Barnes: To jog your memory, I think I said weeks, not months. I should have said months, not weeks. It wasn’t a mistake, it was my optimism at the time. The physical works to get the slurry plant complete and
Florence able to move. We’ve all progressed. What I underestimated was the process with which to go through the approval process, given the sinkhole that formed in December is just outside our construction boundary.

Senator ROBERTS: Mr Barnes, could you give me on notice the movement of the machine, in metres, between November 2022 and February 2023, between February 2023 and May 2023, and from May 2023 to now?

Mr Barnes: Yes.

Senator ROBERTS: Thank you. Minister, it seems on the face of it that this is government misinformation covering up a massive failure. I’m not blaming you entirely for that, because this whole thing was started under
Malcolm Turnbull as prime minister and Scott Morrison as prime minister. There was no fully disclosed business case. It was heavily redacted. There was no cost-benefit analysis done. The whole thing is based on a false premise. This is what happens when the top is rotten. I’m not referring to you as being rotten, Minister; I’m referring to the project when it was first given the go-ahead. But you’re now carrying the can.

CHAIR: Is there a question?

Senator ROBERTS: Yes. Minister, what questions are you asking about the rest of the project, because this is serious stuff?

Senator McAllister: You are right in this regard: the project as first announced by the Turnbull government does not reflect the dimensions and characteristics of the project as we now understand it. Some of those changes and issues were known to the previous government and not revealed. Minister Bowen has made it very clear how disappointed he was when he came to government and discovered that aspects of the project, including significant delays in cost increases, had not been communicated. As I indicated earlier in my evidence, when Mr Barnes was appointed, the expectation from the shareholder ministers was communicated very clearly to the board and, I understand, through the department to Mr Barnes that we wanted to see this project back on track. We wanted the new management to examine it and provide advice about how to get it back on track. It took some time. It wasn’t possible to do that in weeks; it has taken Mr Barnes some time. When that advice was provided, it was to the Minister, who then sought to communicate it directly to the Australian public. These are complex projects. We accept that. We have noted a constructive tone and a more open approach to communication from the engagements we are presently having with Snowy Hydro, and we hope to see this project—which, as I indicated, is an important project for the energy system and the Australian people—back on track.

Senator ROBERTS: Let’s move to something else that the government has lied about. This might not be ministerial staff or the ministers themselves, but we know that the agency has lied about the toxic gas in the shaft
coming from isocyanate, used to strengthen the ground in the absence of proper machinery—the slurry machine. That was more government misinformation, wasn’t it, Minister?

Mr Barnes: I’m happy to talk to this. You are referring to an incident that occurred in early July. When polyurethane foam, which is sometimes used in front of the tunnel boring machine, comes into contact with water
it can create isocyanate gas. It did so. The incident was reported quickly, access to the site was restricted, additional personal protective equipment was provided and monitoring was put in place.

Senator ROBERTS: What was that personal protective equipment?

Mr Barnes: You can do positive-pressure face masks which stop any gases entering.

Senator ROBERTS: Does that involve carrying air or oxygen?

Mr Barnes: No. I don’t how the reverser flow works, but you picture the large face masks with a positive flow meter. They have a filter. I don’t know the details of how those machines work, but they do protect the individual. We have actually stopped using the polyurethane foam and reverted to grout on that.

Senator ROBERTS: So lives are at stake?

Mr Barnes: Absolutely. This is a complex project with many hazards.

Senator ROBERTS: And the economy is at stake if this project doesn’t live up to nameplate design. How much is Florence worth, and who pays if you can’t get it out or if it comes out as scrap?

Mr Barnes: Florence is not identified as a single item in the project line, but between $100 million and $200 million would be an estimate of a tunnel boring machine. But Florence is able to progress its journey once we
receive the necessary approvals.

CHAIR: We’ll need to rotate the call, Senator Roberts. Do you have a final question? We can come back to you.

Senator ROBERTS: In May I asked about the updated cost, and Mr Barnes replied, ‘We haven’t got an updated cost here and will provide that in months.’ Your updated cost is now $12 billion? Is that it?

Mr Barnes: That’s correct.

Senator ROBERTS: Does that include two major expenses: transmission lines to get the power in and out and the ongoing cost of Florence still being bogged?

Mr Barnes: It is the cost to complete the project to the transmission lines at the power station, including all action necessary to complete the head race tunnel, which is where Florence is.

Senator ROBERTS: So any additional transmission lines needed to take the power out are not part of that project cost?

Mr Barnes: We have one transmission connection from the power station up to the grid, which Snowy Hydro pays for on an ongoing tariff.

Senator ROBERTS: My understanding is that the current transmission lines will not be adequate after Snowy 2 comes in.

Mr Barnes: For snowy 2 to get its full potential, there is an extension to the transmission grid required.

Senator ROBERTS: Thank you. So the total cost of this project—

CHAIR: We need to move on, Senator Roberts. We need to rotate the call.

Senator ROBERTS: Okay.

Senator McAllister: Senator Grogan, I took on notice a series of questions from Senator Roberts. I had previously indicated that these were questions for shareholder ministers and I would take them on notice on their
behalf. I just want to clarify that that’s also what you were seeking in the other questions that you put to me later on?

Senator ROBERTS: I’m happy to get an answer from the government ministers. It doesn’t have to be you; just the person in charge would be perfect.

Senator McAllister: Thanks, Senator Roberts.