The Office of Northern Water Delivery, formed in July, is in turmoil after major changes and the resignation of its acting CEO

A taxpayer-funded agency charged with delivering a multibillion-dollar outback water project is in turmoil after a major revamp and the sudden resignation of its acting CEO.

A little-known new taxpayer-funded agency charged with delivering a multibillion-dollar outback water project is in turmoil after it was stripped of responsibility and its chief executive abruptly resigned over the organisation’s change of direction.

The Office of Northern Water Delivery (ONWD) was quietly formed in July to oversee the $5bn project, which includes an Eyre Peninsula desalination plant and a 600km pipeline to the Far North.

But the agency has been plagued ever since, culminating in the resignation of acting chief executive Matt Hardy last week.

Tom Koutsantonis said he was surprised at Liberal MP Ben Hood’s concern, saying he had never mentioned Northern Water in parliament. Picture: Kelly Barnes

Multiple sources have raised concerns over progress in the project. In July, when the new agency was created, Northern Water was handed over from Infrastructure South Australia, and consultancy MBB Group was commissioned to conduct a $200,000 review.

In late September, Mr Hardy told staff that the project would be split.

“The Minister (Tom Koutsantonis) has decided that many aspects of the Northern Water project will now fall under the responsibility of the Department for Infrastructure and Transport (DIT),” he said in a note to the project team.

The agency remains responsible for the commercial, legal and financial aspects of the project, as well as public relations, community engagement activities, risk management, specifying the project’s requirements and objectives, and developing a business case.

But, under the changes, all other work – including project development and procurement – was handed over to DIT.

“While it will look different, it will still be the Northern Water Project being delivered by different offices but essentially for the same goals and outcomes,” Mr Hardy wrote.

“The only good news is that, after a three-month pause, the project is off to the races and there is a lot of urgent and important work to do to achieve FID (Final Investment Decision) in late 2025.”

In another note to staff last week, Mr Hardy – who moved from Queensland earlier this year – said his decision to leave came “with plenty of sadness”.

“Unfortunately, however, the role I came here to do has changed, and upon reflection, it no longer makes much sense for me to continue being involved with the project,” he said.

A government spokeswoman said MBB Group was hired for the review after its “exemplary performance as Transaction Adviser to DIT on the River Torrens to Darlington Project”.

Asked if the creation of ONWD was ever announced publicly, she said it was published in the Government Gazette – a publication to formally announce legislation

Opposition spokesman Ben Hood accused the government appearing to “bungle a multibillion-dollar project”.

“For a government that’d hold a press conference to announce it can spell its name right, the silence from their 20 taxpayer-funded spin doctors on Northern Water is deafening,” he said.

Mr Koutsantonis said he was surprised at Mr Hood’s concern: “He’s never mentioned Northern Water in parliament”.

He said establishment of the ONWD was publicly foreshadowed in April, publicly notified in the Gazette in June, and announced to the public sector on July 1

Originally published as The Office of Northern Water Delivery, formed in July, is in turmoil after major changes and the resignation of its acting CEO