Australia's Snowy Hydro pauses tunnel boring after ground collapse

Aug 13, 2023

SYDNEY, March 1 (Reuters) - Tunnelling work has been paused on a key section of a mega project to expand the Australian-government owned Snowy Hydro hydropower scheme after the ground above collapsed, the company confirmed on Wednesday after several weeks of media reports.

The tunneling mishap is the latest delay to blow out what was a A$5 billion ($3.4 billion) budget for the Snowy 2.0 project, designed to add 2,000 megawatts of generation capacity essential to help replace coal-fired power.

Snowy Hydro stopped a tunnel boring machine at the Tantangara site after 150 meters of progress when workers discovered a nine-metre deep (9.8 yards) hole in the ground above the tunnel, the company said in a statement on Wednesday.

The concrete lined tunnel has not collapsed and the boring machine was not damaged, the company added. Tunnelling is set to resume once workers stabilise the ground around the proposed route.

The statement came a month after the government installed a new chief executive, Dennis Barnes, whom Energy Minister Chris Bowen said he was counting on to bring a "completely fresh set of eyes" to fix the project.

"The project is moving too slowly for my liking," Bowen said on Australian Broadcasting Corp television on Sunday.

The massive expansion is running at least a year late and A$2.2 billion over its initial A$5 billion budget. Italy's Webuild SpA (WBD.MI) took full control of the project in December after its construction partner Clough went bankrupt.

Bowen said engineering work was underway to make more progress tunnelling and dismissed questions about whether the project should be reconsidered. Snowy 2.0 is key to meeting the government's target of 82% renewable energy in the national energy market by 2030.

The Australian Energy Market Operator last week said in a report that Snowy Hydro has not confirmed any change to its previously provided commissioning schedule expected between July 2025 and June 2027.

($1 = 1.4806 Australian dollars)

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