Location of state government’s $5bn Northern Water project back under review nearly a year after Cape Hardy was announced as the preferred site

The location of the state government’s $5bn Northern Water project is back under review nearly a year after a preferred site was announced.

The location of the state government’s $5bn Northern Water project is back under review nearly a year after a preferred site was announced.

Following recent controversy surrounding the project, Premier Peter Malinauskas said cost and timeline drags, as well as issues with communities, were “all to be anticipated”.

A Northern Water business case, published in February this year, stated Cape Hardy – on the east coast of Eyre Peninsula – had been identified as “the preferred site for the desalination plant”.

“Cape Hardy presents a unique opportunity to manage water security for the Eyre Peninsula and is considered the preferred site for progressing planning and further environmental studies for the desalination plant,” the report said.

Infrastructure Minister Tom Koutsantonis. Picture: Kelly Barnes

But, under questioning by the opposition last week, Infrastructure Minister Tom Koutsantonis told parliament the government had not decided on a preferred site.

“That is the role of the pre-feasibility study into either Cape Hardy or Mullaquana, which is near Whyalla,” he said.

He went on to list a number of reasons why Mullaquana was a more attractive option than Cape Hardy.

“Obviously, one site is a lot closer to Roxby Downs than another,” he said.

“One site has no infrastructure; another site is very close to an existing industrial town.

“One site has no power or any other infrastructure in place; the other has lots of power, lots of infrastructure and a ready workforce nearby.”

In a statement on Monday, Mr Koutsantonis said “we make no apologies for maintaining Mullaquana in the mix as one of the options for the site”.

“It gives us a competitive contest on price,” he said.

“Maintaining two site options for this prospective project ensures that if we proceed we can secure the lowest possible cost and guarantee the best chance of success.”

As well as the desalination plant, the project includes a 600km pipeline to the Far North to supply water to mining and agricultural industries.

Last week, The Advertiser revealed the new Office of Northern Water Delivery, quietly established in July, had been stripped of key responsibilities and its chief executive had resigned.

The project has an allocated budget of $230m up until early 2026, when a decision is due on whether it will proceed.

Also speaking in parliament, Mr Malinauskas conceded the figure was “an astronomical sum of funds for an analysis of this nature, but it is what it costs”.

He said, when undertaking an infrastructure project as complex and large as Northern Water, “there will be problems we have to overcome”.

“There will be drags on time, there will be drags on cost and there will be issues that we have to encounter with communities along the way,” he said.

“That’s all to be anticipated.”

In July, the project was handed over from Infrastructure SA to the new Office of Northern Water Delivery.

A $200,000 review was conducted by MBB Group, before key responsibilities were in September transitioned into the Department for Infrastructure and Transport.

Mr Koutsantonis told parliament the review was not subject to a tender process.

“The department is able to use procurement advisers that we already have on contract,” he said.