NextDC, the largest datacentre operator in Australia, is facing a significant delay with its Melbourne M3 site expansion. The company has pointed to community resistance against new 22-meter power poles as the main reason for the hold-up.
On Wednesday, NextDC told the Australian Stock Exchange that the expansion is now pushed back to the 2027/2028 financial year. This delay is tied to Jemena halting its upgrade of power poles, crucial for supplying the extra electricity needed at the West Footscray site.
NextDC's share price took a nosedive, dropping from over $9 to $5.69 per share when the trading halt was lifted. Alongside this, the company has revised its net revenue guidance sharply downward, now expecting $475 million to $500 million, a steep fall from the earlier forecast of $615 million to $640 million.
Jemena cited safety concerns and lack of access due to community and stakeholder opposition as reasons for stopping work. The local council has not given the green light for the construction of these taller power poles, which would increase from 11 meters to 22 meters. More community consultations are now in progress.
NextDC and Jemena are looking into different ways to meet the site's electricity needs. Options on the table include moving the poles to industrial zones or using other connection methods. The expansion is designed to increase the site's capacity from 60 megawatts to 225 megawatts, a capacity that NextDC has already promised to its customers.
The West Footscray community is strongly against the expansion. Their concerns revolve around the project's scale, construction noise, and possible reliance on diesel generators during power outages. The expansion would double the M3 site's size to 10 hectares.
Despite the delay in grid supply, construction of new data halls will continue. However, the Victorian government's planning decision for stages six and seven of the project is taking longer than expected. NextDC's CEO, Craig Scroggie, mentioned that the earliest approval might come in February 2027, as the government enters caretaker mode for the November 28 state election.
The application, pending since February 2026, is delayed due to a change in leadership from Jacinta Allen to Ben Carroll and the ensuing cabinet reshuffle. Scroggie expressed frustration over the technical hurdles but remained hopeful about approval, stating, "We comply with all of the development requirements under the planning rules."
Local resident and Citizens of Tottenham member, Sean Brown, stressed that the community's aim isn't to reduce shareholder value but to ensure fairness and safety. "We’re not stopping, " he asserted, vowing to keep advocating until satisfactory solutions are reached.
Brown also mentioned that the community plans to engage with whoever takes over as planning minister post-election, suggesting that approving the project could spark controversy.
