Pilbara sold a PUPP as costs blow out, Auditor General says
The WA Auditor General’s report into the much maligned Pilbara Underground Power Project found the project was poorly managed from the get go.
The project was originally estimated to cost $130 million to underground power in the region with a finish date of December 2012.
This blew out to $230 million in 2012 and the Auditor General Colin Murphy’s report claimed it now stood at $252 million with a 2018 finish.
A Horizon Power spokesman said the company would spend up to $22 million in operating costs which included dismantling of ageing overhead infrastructure.
“Ratepayers are not contributing to these operating costs,” he said. “These costs have been fully disclosed in Horizon Power financial statements which are available to the public.”
The report said the December 2012 date was “unrealistic” and “did not reflect local conditions.”
Mr Murphy said Horizon had rushed into the contract and went through unchecked since an oversight committee had no decision making power and Horizon already had the money.
Mr Murphy said the benefits were clear but the costs were inadequate and had they been done properly in the first place the government may not have made the decision to go through with it.
“We’ll never know the answer because they were halfway through it,” he said.
“They started digging before realising all the estimates were widely inadequate. The planning problems and the business case that was submitted in 2009 would not simply get through today’s processes and that’s the good thing.”
Mr Murphy also said there had not been any documented reasons as to why the then-Office of Energy’s recommendation for Western Power to do the project was changed to recommend Horizon Power do the project.
The City of Karratha’s contribution went up from $21 million to $34.5 million after the Horizon blowout.
Mayor Peter Long said without the additional contribution, the project could not be completed.
More than 95 per cent of properties in the city have made a payment towards their PUPP services charge.