TasWater has finally revealed the cost of relocating the Mac Point wastewater treatment plant

Government inaction has been blamed for a mammoth budget blowout on the Macquarie Point wastewater treatment plant relocation.

Labor has blamed state government inaction on the Macquarie Point wastewater treatment plant for the massively increased cost of the project.

As revealed by the Mercury on Thursday, the cost of relocating the wastewater treatment plant to Selfs Point will cost $314m - more than double the estimate of $140m.

TasWater’s share will be $89.7m, leaving the state government to pay $224.25m.

This will blow a $124m hole in the state budget, with the government having set aside $100m towards the project as of 2023/24.

The wastewater plant has been the major impediment to any development at adjacent

Self's Point Wastewater Treatment Plant. Picture: Chris Kidd

Macquarie Point, the site now earmarked for a $715m stadium.

When asked about the cost of the plant relocation on Thursday, Health Minister Guy Barnett said the increase was not surprising, given the length of time the project had been in planning.

“The original cost estimates were many years ago. Clearly there was always an expectation of an increase. My advice is that will be attended to in the 24/25 budget,” Mr Barnett said.

“Everybody knows we want to protect the health of the Derwent River, the environment in and around Hobart, it’s part of our long term plan and we want to get on with the job to deliver better outcomes for the people of Hobart and Southern Tasmania.”

Shadow Treasurer Josh Willie said the state government was to blame for the cost escalation because of the time it’s taken to get the project off the ground.

“It’s been nearly a decade. We’ve had a failed TasWater takeover, we’ve had a dispute around who will pay. And it will Bethe Tasmanian taxpayer now on the hook for a $124m cost blowout,” Mr Willie said.

“This was first talked about and floated in 2015 and here we are in 2024 with very little action and a massive cost blowout that the taxpayer is going to wear from the Liberal Government’s incompetence. They have been very poor in managing this project. It is a project that had to happen no matter what happened on this site. That has been known for a very long time.”

The Selfs Point project is expected to have significant environmental and economic benefits for Hobart.

TasWater says the project will halve the nutrients flowing into the River Derwent and allow for more housing to be built.

Mammoth cost revealed for Mac Point wastewater plant relocation

May 8, 5am

The cost of relocating the Macquarie Point wastewater treatment plant to an expanded Selfs Point plant will cost $314m, TasWater has revealed.

The long-awaited costing for TasWater’s biggest ever project is more than double the $140m initial estimate.

TasWater’s share will be $89.7m, leaving the state government to pay $224.25m.

This will blow a $124m hole in the state budget, with the government having set aside $100m towards the project as of 2023/24.

TasWater has been indicating for some time the cost would be much higher than $140m, but until now has declined to reveal an updated estimate.

The wastewater plant has been the major impediment to any development at adjacent Macquarie Point, the site now earmarked for a $715m stadium.

First flagged in 2015, the slow progress of the wastewater treatment plant project caused it to run into the Covid pandemic and the subsequent cost escalations that have blown the budgets of many major developments.

“Understandably, the cost of this major project has risen in the eight years since the $140m planning estimate from 2016. During that time market conditions have tightened, the cost of materials has risen, and we have expanded the scope of the project to provide even greater benefits for Hobart and beyond,” said TasWater general manager project delivery Tony Willmott.

Self's Point Wastewater Treatment Plant, TasWater head of water and environment services Fran Smith and general manager project delivery Tony Willmott. Picture: Chris Kidd

The three-part project involves upgrading Selfs Point to handle additional volume, removing the treatment plant and installing a pump station and emergency storage at Macquarie Point and constructing a seven kilometre pipeline from Macquarie Point to Selfs Point.

TasWater will also spend $66m to further improve Selfs Point to allow underperforming treatment plants around Greater Hobart to be decommissioned.

Construction there is due to be completed at Selfs Point by April 2026.

Macquarie Point is due to switched off by 2026.

The project will have significant environmental benefits for the River Derwent and cater for increased housing development in Hobart.

“This project will see nutrients into the Derwent from our operations halved, give developers confidence to build houses, and provide us the pathway to transform sewage treatment in Greater Hobart and the Eastern Shore over the next 20 years,” Mr Willmott said.

“We are partnering with the state Tasmanian Government on the $314m relocation from Macquarie Point, but at the same time TasWater will invest a further $66m in the Selfs Point site to allow us to decommission other underperforming treatment plants in Greater Hobart

“By retiring the underperforming Macquarie Point plant and directing flow to Selfs Point, we will remove 132 tonnes of nutrients from the Derwent each year.

“That is an immediate 50 per cent reduction in our impact on the waterway, improving the health of the river for the environment and for recreational users.”

Aerial view of the Selfs Point wastewater treatment plant in Hobart. Picture: TasWater

TasWater says the project will provide an estimated 3420 direct and indirect jobs and once completed, support an estimated $1.1bn worth of activity in the state.

The upgraded plant will also provide up to 9bn in recycled water for agriculture and landscaping.

Treatment plants to be removed over the next 20 years following the Selfs Point upgrade include Cameron Bay at Berridale, Prince of Wales Bay and Risdon.

Treasury has consistently named the wastewater plant removal as a key risk to the state’s finances, given uncertainty around the cost.

The 7000 sqm site at Macquarie Point to be vacated by TasWater will make way for increased heavy vehicle access to the port.

Timeline: The drawn out process of moving Macquarie Point’s Wastewater treatment plant

• May 2015: A feasibility study into Macquarie Point says the proximity of the Hobart wastewater treatment plant “effectively prevents” any development at the site such as housing. The government is advised to look at relocating the plant.

• June 2015: As part of an initial masterplan for the site, the government, TasWater and the Macquarie Point Development Corporation agreed to have the wastewater treatment plant shut down by mid-2019.

• May 2016: TasWater identifies Selfs Point as the preferred site for diverting wastewater from Macquarie Point. The project is costed at $70m.

• November 2016: The cost estimate for the project jumps to $130-$145m.

• December 2016: Former TasWater chairman Miles Hampton say TasWater is unwilling to pay the cost of moving the wastewater plant. The state government indicates it will underwrite the project.

• March 2017: The state government announces a plan to take ownership of TasWater.

• May 2018: Government decides not to take ownership of TasWater.

• September 2018: The government agrees to cover most of the cost of the relocation of the Macquarie Point plant.

• July 2022: TasWater says it is on track to have the plant moved by 2025.

• December 2022: TasWater CEO George Theo warns the cost of relocating the plant will be more than $140m.

• November 2023. Mr Theo tells a government business enterprise hearing the cost of moving the plant will not be known until the new year and the timeline might go out into 2026.

• May 2024: TasWater reveals it will cost $314m to relocate the plant, with the project to be finalised by the end of 2026.