South Australia's Eyre Peninsula desalination plant is now expected to begin supplying water by mid-2027, a six-month delay from its original late 2026 target, and its cost has risen by $140 million to approximately $470 million. This delay is primarily due to unexpectedly hard granite rock found during the construction of a 440-meter marine tunnel.

This delay impacts approximately 35,000 SA Water customers on the Eyre Peninsula who are awaiting a climate-independent source of drinking water. The project's budget increase represents nearly a 50 percent jump in expected spending. SA Water states that current groundwater allocations and River Murray supplies will meet demand until the plant is operational, and no water restrictions are anticipated.

What the records show

The Eyre Peninsula Desalination Plant, located near Billy Lights Point, is designed to provide 5.3 gigalitres of water annually. In the 2023-24 SA Budget, the project's cost was estimated at $330 million. By July 2025, the South Australian Government announced the cost had increased by $140 million, reaching $470 million. The construction of the plant's marine pipeline infrastructure involves a 60-tonne tunnel boring machine digging a 440-meter tunnel beneath the seafloor. SA Water Chief Executive David Ryan stated in July 2026 that the machine encountered granite that was “harder and denser than the project investigations indicated,” significantly slowing tunnelling progress. The density of the granite was greater than expected, despite prior geotechnical analysis.

The timeline

Initial estimates in April 2024 projected construction completion by mid-2026, which was later revised to December 2026. SA Water awarded the main construction contract to ACCIONA in October 2023. By June 2023, the project's cost had already increased to $330 million, and completion was pushed to March 2026. Main works began in July 2025 with ACCIONA as the prime contractor, and the cost was confirmed at $470 million with a new target completion of late 2026. However, by July 2026, SA Water revealed the hard granite was delaying marine tunnelling. The 440-meter marine tunnel was installed by October 2026. SA Water now expects the plant to deliver its first water by the end of June 2027.

What changed

The primary change is the six-month delay for the approximately 35,000 SA Water customers to receive climate-independent drinking water, with the new target set for mid-2027 instead of late 2026. The project's budget has also increased by $140 million. SA Water states that water restrictions are not expected. The utility released an Eyre Peninsula Water Security Response Plan in November 2024 to manage water supplies. An Amended Eyre Peninsula Water Allocation Plan, finalized in June 2026, will also support water supply by allowing SA Water to extract up to 6.3 gigalitres from the Uley South groundwater resource in 2026-2027. This plan will reduce licensed extraction in other areas from July 2027, relying on the completed desalination plant.

What the subject has said publicly

Planning Minister Nick Champion stated in July 2025 that the Eyre Peninsula Desalination Plant “will deliver a secure source of water for more than 35,000 SA Water customers and will support jobs and future-proof the region”. SA Water Chief Executive David Ryan commented in July 2026 on the tunnelling difficulties, explaining that the “density of incredibly hard layers of granite rock below the seafloor is greater than expected and has significantly slowed our tunnelling progress”. SA Water General Manager of Sustainable Infrastructure Peter Seltsikas confirmed in October 2026 that tunnel construction was complete and the project was moving towards its revised delivery timeframe. He also noted that the revised timeline is not expected to cause water restrictions, as current supplies are anticipated to meet demand until the plant is operational.

What we could not confirm

We could not confirm the exact original cost estimate of the project before it was adjusted to $330 million in the 2023-24 SA Budget.