Queensland Hydro boss Kieran Cusack moved on and Borumba facing cuts

The Crisafulli government axed Annastacia Palaszczuk’s plans to build the world’s biggest pumped hydro scheme, and is now running the ruler over the rest of Labor’s renewables plan.

Borumba Pumped Hydro by Queensland Hydro.

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Queensland Treasurer David Janetzki has cut costs in the $18bn Borumba pumped hydro project and moved on by mutual agreement its Labor-appointed boss ahead of delivering his first budget next Tuesday.

The two-gigawatt proposed hydro scheme is now facing a major downsize, with Mr Janetzki understood to have slashed its requested funding next financial year by 60 per cent.

Just after winning the October state election, the Crisafulli government axed the 5GW Pioneer-Burdekin pumped hydro project after revealing it was unviable and had suffered massive cost blow-outs, with a revised price tag of more than $30bn.

The two proposed pumped hydro projects were the centrepiece of the previous Palaszczuk Labor government’s plan to ­collectively provide 7GW of stored electricity and allow the phase-out of five state-owned, coal-fired power stations by 2035.

Under the plan, more than 80 per cent of the state’s electricity would come from renewables-­generated energy, mostly wind and solar farms.

Earlier this week, Kieran ­Cusack, the chief executive of Queensland Hydro – the state-owned company set up to deliver the two pumped hydro schemes – has departed by mutual agreement after the entity was formally taken over by the Queensland Investment Corporation with a share transfer.

QIC was appointed earlier this year by Mr Janetzki to conduct a commercial review of the Borumba project, which is already three years behind the schedule set out by the former Labor and more than $4bn over budget.

It was supposed to be operating by 2030 but has yet to receive federal environmental approvals for the project’s “early works”.

Sources have told The Australian that Mr Cusack was “not being blamed’ for the delays and cost blowouts and his departure was part of “a complete corporate overhaul”.

“He was being asked to do the near impossible,’’ one source said.

It is understood Mr Janetzki also cut the requested $870m operating budget of Queensland Hydro for the 2025-26 financial year by 60 per cent.

The move has increased speculation that Mr Janetzki – who is also Energy Minister – is seeking to downsize the planned Borumba scheme, near Gympie, and north of Brisbane.

With the delays and uncertainty in the Borumba project, the government could also seek to bank savings from the $6bn in funds that were included in the forward estimates of the 2023-24 budget for construction costs.

Queensland Hydro chief executive Kieran Cusack. Picture: Contributed

A spokesman for Mr Janetzki declined to comment specifically about the project and or any savings ahead of the LNP government’s first budget.

In a statement, Mr Janetzki said the government was delivering on the LNP’s election promise to ensure the project was viable.

“Labor would never have delivered the Borumba project, with an independent report revealing there was a less than 1 per cent chance of any power being delivered by its 2030 first energy deadline,’’ he said.

“We have transferred oversight of Queensland Hydro to Queensland Investment Corporation, which will prepare a revised business case for the project.

“Oversight from QIC will help the government deliver on its commitment to deliver a proper commercial assessment of options for the delivery of Borumba and enable the government to be open on the real cost and time­frames of delivering this project,” he said.

The LNP went to the state election promising to axe the Pioneer-Burdekin project and instead back smaller, privately owned pumped hydro projects.

Since winning power, however, there has been little detail about where these would be located or how they would replace the proposed 5GW storage capacity of the Pioneer-Burdekin project.