Snowy Hydro has told the federal government the collapse of a major construction firm won’t disrupt progress on its multibillion-dollar pumped hydro project.
Clough Group placed itself into voluntary administration on Monday after a takeover plan for the century-old Perth based company by Italy’s Webuild fell through. The failure potentially affects at least six other big projects from a power plant to a navy base.
Webuild and Clough were working together to help build the giant Snowy 2.0 project that involves 27km tunnels to develop 2,000MW of storage capacity.
The venture has been dogged by delays with the main operator of the national electricity market expecting it won’t be completed by the end of 2026 as Snowy Hydro still claims. The original $2bn price may also nudge $10bn when new transmission line costs are included.
The federal energy minister, Chris Bowen, received a briefing from Snowy Hydro’s acting chief executive, Roger Whitby, on Wednesday and he expects “further briefings will occur on a regular basis”, a spokeswoman for the minister said.
“The government understands that all blue-collar workers on the Snowy 2.0 site are either employed by the [Webuild and Clough joint venture] or through subcontractors rather than by Clough,” she said, adding that “[as] such, direct impacts to this part of the project workforce will be limited”.
A spokeswoman for Snowy Hydro said Clough’s disclosures indicate financial issues involve projects that were separate and unrelated to Snowy 2.0.
“We are working closely with the joint venture to ensure construction on the project progresses smoothly,” she said, adding that resolving Clough’s future “will take some time”.
Guardian Australia understands the main issue is whether Webuild will employ Clough’s white-collar staffers that were not employed by the joint venture, known as Future Generation. Webuild has told Snowy Hydro that plans were advanced to cover vulnerable staff.
Guardian Australia has contacted Clough for comment.
Deloitte is among the partners working to restructure the Clough Group. Apart from Snowy 2.0, the construction company is also building part of the new transmission lines planned between South Australia and New South Wales, and the Tallawarra gas project for Energy Australia, also in NSW.
Clough is also working on the Lombrum naval base in Papua New Guinea for the Australian Department of Defence.
“We understand this news will be unsettling, disruptive and stressful for stakeholders, including employees, customers, joint venture partners, contractors and suppliers,” said Jason Tracy, voluntary administrator and Deloitte turnaround and restructuring partner.
Separately, billionaire Andrew Forrest has taken over CWP Renewables, expanding his company’s clean energy portfolio to 2.4GW.
A statement from his family-owned Squadron Energy firm said the acquisition brings the company’s pipeline of projects in Australia to 20GW.
“Once fully operational, Squadron’s portfolio will provide enough electricity to power 8.5 million homes, more than double the number of homes in NSW,” the company said.
Forrest said: “It means that Squadron has the renewable energy critical mass to help Australia step beyond fossil fuels.”
“We share a vision of Australia and the world, looking back on the dark era of fossil fuel as an aberration in humanity’s history.
“One that could have ended with that fuel but is now powered by cheap, pollution-free, democratic inexhaustible energy.”
Squadron did not state a price. The Australian Financial Review has reported it was more than $4bn.