The new recycling plant to replace the one destroyed in the Boxing Day fire in 2022 will cost approximately $37 million, an increase of $11 million from previously announced.

The new material recovery facility (MRF) was originally expected to cost $26 million jointly between the ACT and the federal government.

Higher numbers are listed in the development application currently available on the planning website. This difference has been picked up by waste management giant Veolia, which signed an $850 million contract with the ACT government in January 2025 to design, build and operate a new state-of-the-art MRF.

Under the agreement, Veolia will operate the factory for 20 years.

A government spokesperson said the project was being delivered through a “build-own-operate-transfer” delivery model, with Veolia funding the costs of the delivery phase.

This $26 million represents the territory’s capital contribution to the project during the delivery phase, including federal contributions, rather than the total cost.

“The remainder of the cost for the entire delivery phase will be borne by Veolia,” the spokesperson said.

“In exchange, the territory will pay a monthly service fee to Veolia over the 20-year period of operation, which will cover both operating costs and capital cost recovery.”

Construction costs in a development application relate to the construction of facilities and the equipping of essential services, excluding plant and equipment.

Construction of the new recycling facility was due to begin in 2026, subject to planning approval.

“The facility is on track to be operational in 2028,” the spokesperson said.

The DA for the new MRF, which will be constructed on the site of Hume’s previous MRF, will include the construction of processing and support buildings, landscaping, internal access roads and critical infrastructure.

It also includes an education building for community and school visits, parking, three intersections, interior driveways, landscaping, earthworks, and public works.

Total cost is listed at $36,972,799.

The new facility will be able to separate paper, cardboard, glass, plastic, steel and aluminum using advanced technology that increases recovery rates and provides higher quality recyclable materials.

The technology includes a glass purification plant, advanced automatic recognition, screens to separate paper, laser optical identification with air jets to separate plastics, and powerful magnets to extract metals.

According to the government, the new MRF can process up to 115,000 tonnes of mixed recyclables per year, up to 50,000 tonnes more per year than the previous facility.

ACT currently sends 46,000 tons of mixed-use recyclables to the interstate for processing each year.

The facility is also designed with state-of-the-art fire detection, mitigation and control systems to prevent a repeat of the 2022 fire caused by lithium battery ignition.

The Hume ruins have been cleared since September last year, and it took several months to demolish the fire-damaged buildings.

More than 100 jobs will be created during construction of the new recycling facility, with an estimated 24 permanent roles as part of facility operations once completed.

The MRF project has been controversial, with the Canberra Liberal Party claiming last year that the business case did not stack up.

They argue that interstate recycling facilities can be used more cost-effectively and efficiently, but the government counters that the Liberals are misrepresenting the business case.

of D.A. Comments are being accepted until March 10th