Contractor’s death casts doubt over Snowy Hydro executive bonuses

Multimillion-dollar bonuses paid to Snowy Hydro senior executives are being scrutinised by the company’s board following the death of a contractor on the project in April.

The Tantangara site on the Snowy Hydro 2.0 project. Picture: Jane Dempster

Multimillion-dollar bonuses paid to Snowy Hydro senior executives are being scrutinised by the company’s board following the death of a contractor on the project in April.

The Australian can reveal the board is reviewing the company’s safety performance following the death of Alan Machon, a worker who died in a single-vehicle crash about 40km northwest of Cooma in NSW.

The death may threaten the payment of up to $4.5m in bonuses to nine executives – comprising 40 per cent of the executive team’s total remuneration – if the board decides the company has failed to meet a critical safety ­target required for short-term ­bonuses to be paid.

It comes as the Australian National Audit Office considers probing the effectiveness of the delivery of Snowy 2.0 after including the potential performance audit on its books.

“This audit would include an assessment of Snowy Hydro Limited’s ongoing management of quality, cost and schedule for Snowy 2.0,” the ANAO says.

According to Snowy Hydro Limited’s annual report, short-term bonuses to executives are paid only when two key thresholds are met. These include that there were no fatalities to either an employee or contractor and that the company has achieved 85 per cent of consolidated earnings before interest and taxes set out in the corporate plan.

“The Snowy Hydro board reviews executive remuneration and the company’s performance annually in August,” a Snowy Hydro spokeswoman told The Australian. “The board will consider the company’s safety performance, including the tragic death of Alan Machon and the circumstances surrounding the incident at that time.”

Snowy Hydro temporarily stopped work on the project as a mark of respect for the victim, after his truck crashed, rolled and caught fire on the Snowy Mountains Highway.

The fatality came after months of union complaints over safety standards, including claims that employees had been run over by vehicles due to a lack of proper communication and supervision processes on worksites.

The Australian has previously revealed that short-term bonuses for the top brass at Snowy Hydro jumped by more than 20 per cent the year before, with the executives raking in a total of nearly $11m in their pay packets.

The significant boost in salaries was paid despite the project continuing to be beset by myriad delays and cost blowouts.

Snowy Hydro chief executive Dennis Barnes in May revealed that full operation of the mega pumped-hydro project was now expected between June and December 2029 at the latest, almost five years behind its original projected completion date.

The delay of the hydro expansion has prompted NSW Premier Chris Minns to flag intervention to extend the lifetime of the Eraring coal-fired power station past 2025 in a bid to ease supply shortfalls and price pressures.

Former independent senator Rex Patrick, who runs the Transparency Warrior website and helps other crossbench members and senators with FOI requests, accused the government of being in “complete secrecy mode” over the project.

An FOI request he made for any 2023 ministerial briefs prepared for Energy and Climate Change Minister Chris Bowen in relation to the status of the Snowy 2.0 or any 2023 project reports from Snowy Hydro was denied.

The department rejected the request and access to 23 relevant documents on the basis that the material contained information obtained under a mutual understanding of confidence and commercially valuable information which, if disclosed, would “diminish or destroy its value”.

“It is clear Snowy Hydro 2.0 is well over budget and well behind schedule,” Mr Patrick told The Australian. “Noting it is the taxpayer that’s bearing the cost of the project and the impact of the delay, the government should be completely open as to what’s going on. The public interest demands it. I’m not deterred by their opaque response to my request. I’m determined to melt that snow with an FOI heat lamp.”

Amid ongoing delays and cost blowouts, Anthony Albanese last week attacked the former Coalition government for failing to invest in transmission lines to connect the project to the grid.

He said Labor was focused on bringing the energy grid “into the 21st century” but was suffering from “10 years of delay”.

“I mean, it’s absurd that of all of the billion dollars being spent on Snowy Hydro, for example, no one thought, ‘should we plug it into the grid?’” Mr Albanese said.

“It’s like buying a new appliance and not having a plug for it. It’s just absurd. And we’re bringing the energy grid into the 21st century so that renewable energy projects can help to power NSW and to power the region.”

The Snowy Hydro project has been dogged by project issues including the collapse of one of its contractors, Covid delays and, more recently, a major tunnel boring ­machine getting stuck.

Mr Barnes has blamed the project’s delays on supply chain disruptions, the increased cost of inputs due to Covid-19, and design and geological problems.

“I am committed to being transparent about our progress and how we are proactively managing the inevitable issues and challenges that arise in a complex project like this,” he said last month.

Opposition energy spokesman Ted O’Brien said “Australians should expect nothing less than the highest of standards when it comes to Snowy Hydro’s governance, including its remuneration scheme.”