Queensland Borumba hydro project three years late and $4bn over budget

A mega pumped hydro station at the centre of Queensland’s planned transition away from coal-fired power could be downsized by the new Crisafulli government.

Queensland Premier David Crisafulli. The cost of building Borumba has ballooned by $4.2bn to $18.4bn, the report found.

A mega pumped hydro station at the centre of Queensland’s planned transition away from coal-fired power could be downsized by the new Crisafulli government after it discovered the project had already blown out by more than $4bn and was almost three years behind schedule.

Huge cost-overruns and delays on the Borumba pumped hydro, slated to be built near Gympie in southeast Queensland, come before main works have even started and expose how the previous Labor government rushed to legislate renewable and emissions reduction targets before properly scoping crucial projects.

Treasurer David Janetzki said the new Liberal National Party government was committed to finding a way forward to “save the project” and would meet with executives from Queensland Hydro on Thursday.

A new “reforecast report” by state-owned Queensland Hydro, commissioned by the Miles government before the election, reveals there was less than a 1 per cent chance of the project being ready to begin deploying power by its 2030 deadline.

Instead, the report found first power would not be delivered until July 2033.

Risk-adjusted estimates reveals the final completion date for the project had blown out by almost three years, from November 2032 to July 2035.

The cost of building Borumba has ballooned by $4.2bn to $18.4bn, the report found.

A separate independent assessment of the project’s cost, schedule and risk profile – conducted by Turner and Townsend – predicted Borumba could cost as much as $19.3bn.

In an executive summary of the report, seen by The Australian, Queensland Hydro told the new state government there was still an “opportunity to consider alternative design optimisation”.

“Alternative configurations of scheme capacity, storage duration and water reliability can offer substantial improvements in cost and schedule,” it said.

Mr Janetzki said the Queensland Hydro report showed that the former Labor government had built in unrealistic assumptions when scoping the time and cost of ­Borumba and was one of a series of infrastructure projects that had seen costs balloon “from in­efficiency and mismanagement”.

“Labor’s energy policy was a house of cards waiting to collapse”, he said.

“The report shows the former Labor government’s timing and costings were pie in the sky.

“They might as well have been made up entirely.”

The report also confirms revelations by The Australian in the lead-up to the October state election that Queensland was on track to miss its legislated renewable and emissions reduction targets, with critical pumped hydro projects behind schedule, yet to secure environmental approvals and facing multibillion-dollar cost blowouts.

The Australian revealed ahead of the state election that an estimated 18 months of “exploratory works” at Borumba were initially scheduled to finish in October but the bulk of the work was still waiting on commonwealth environmental approvals to begin.

The former Labor government earlier this year legislated its target of 50 per cent statewide renewable generation by 2030 and 80 per cent by 2035.

As of June, 27 per cent of electricity generated in the state was produced from renewable sources, an increase of just 1 per cent in 12 months.

Mr Crisafulli has flagged plans to repeal the renewables goal, along with a legislated target to slash 75 per cent of carbon emissions by 2035.

He remains committed to net zero by 2050.

The new LNP government immediately axed the Pioneer-Burdekin pumped hydro project, near Mackay, following the state election and after revealing it was unviable and would cost more than double its initial $12bn price tag.

Mr Janetzki has said he wanted to “de-risk” the state’s energy transition by investing in smaller pumped hydro projects and partnering with the private sector.

He has said the government would construct “more manageable” smaller pumped hydro projects to meet the state’s baseload power needs but he had no firm plan on where or when they would be built or how much they were expected to cost.