Senate Environment and Communications Legislation Committee, , 7:29:54 to 7:31:45
The CEO admits the initial $2 billion headline figure for the project was infeasible and explains how design immaturity at the final investment decision led to significant cost blowouts.
Topics: Renewable energy, Government spending, Infrastructure
Speakers: Varun Ghosh, Dennis Barnes
>> Uh, thank you, Mr. Barnes. Uh, I just have a couple of questions to lead off before I go to Senator Roberts. Um, picking up on where you finished just then, can I just ask, was the initial $2 billion headline cost of Snowy 2.0 ever feasible?
>> Uh, no decisions were ever made on the $2 billion headline figure. uh clearly events to date show that it was an infeasible figure.
>> Big difference between two billion chair. >> Yes, I I I agree that initial $2 billion was absurd. Bution but Senator Henderson, please don't interrupt me while I'm asking my questions. >> I just want to put the facts on the record. >> Well, and you will have your chance to do that, but we don't interrupt you while you're answering asking your question. So, please in 2020, >> Senator Henderson, >> now it's 25. Senator Henderson, come to order. Can I just ask you, Mr. Barnes, how has the design immaturity at financial investment decision impacted the project? You touched upon that at the end there. If you're able to elaborate on that a bit, please.
>> So, if we go to the reset target cost, which was $12 billion, and today, let's choose the $22 billion figure that the contractor has provided. That's a $10 billion difference. and about three quarters is a as a result of design immaturity. Five billion associated with more people far longer. Uh a little over a billion on scope that was emitted because of the poor design and about a billion dollars on uh specific design elements that were missed. The balance of about $2.5 billion is associated with uh the escalation factors we've seen across all
Thank you, uh, Senator Roberts.