ACT Recycling Plant Cost Rises to $37 Million – Veolia Project Update 2028

ACT Recycling Plant Costs Rise to $37 Million, Veolia to Cover Additional Expenses

The cost of the new Materials Recovery Facility (MRF) in Hume, ACT, to replace the facility destroyed in the 2022 Boxing Day fire, has increased to almost $37 million, a rise of $11 million from the originally projected $26 million, according to a development application now available on the Planning website.

While the initial $26 million was to be jointly funded by the ACT and Federal governments, the additional costs will be borne by Veolia, the waste management company contracted to design, build, and operate the new facility. Veolia secured an $850 million deal with the ACT Government in January 2025 for this purpose, encompassing a 20-year operating contract.

The project is structured as a Build-Own-Operate-Transfer (BOOT) model, meaning Veolia is financing the delivery phase costs. The ACT Government’s contribution remains at $26 million, representing the Capital Contribution for the delivery phase, including the Commonwealth’s share. The government will then make monthly service payments to Veolia over the 20-year operating period, covering both operational expenses and the recovery of capital costs.

The $36,972,799 total cost detailed in the development application covers the construction of the facility and the installation of essential services, but excludes the cost of plant and equipment. Construction is slated to begin in 2026, pending planning approvals, with the facility expected to be operational by 2028.

Increased Capacity and Advanced Technology

The new MRF is designed to process up to 115,000 tonnes of mixed recyclables annually, a 50,000-tonne increase compared to the previous facility. This increased capacity is intended to reduce the ACT’s reliance on sending approximately 46,000 tonnes of mixed recyclables interstate for processing each year.

The facility will employ advanced technology to sort materials including paper, cardboard, glass, plastic, steel, and aluminum. Key features include a glass purification plant, automatic recognition systems, screens for paper separation, laser optical identification with air jets for plastic sorting, and powerful magnets for metal extraction. These technologies are expected to improve recovery rates and the quality of recyclable materials.

Fire Safety Improvements

The new facility incorporates state-of-the-art fire detection, mitigation, and control systems, specifically designed to prevent a recurrence of the 2022 fire, which was attributed to lithium battery ignition. The Hume site was cleared starting in September of last year, following several months of demolition of the fire-damaged buildings.

Economic Impact and Controversy

The construction phase of the MRF is expected to create more than 100 jobs, with an additional 24 permanent positions anticipated once the facility is fully operational.

The project has not been without its critics. The Canberra Liberals previously argued that the business case for the MRF was unsound, suggesting that utilizing recycling facilities interstate would be more cost-effective. The ACT Government refuted these claims, stating that the Liberals misrepresented the business case.

The development application is currently open for public comment until March 10th.

Veolia North America, a company with over 170 years of experience in environmental solutions, is responsible for the project. The ARC project, a separate Veolia initiative, aims to convert non-recyclable waste into energy, capable of powering 40,000 homes annually and contributing $227 million to the local economy during construction, and $37 million each year thereafter.