Project Mars shelved: Goodman Group abandons $800m Lane Cove data centre plan

Goodman Group has withdrawn its application for Project Mars, an $800 million, 81-megawatt hyperscale data centre planned for Lane Cove West, after community opposition and concerns from utility providers.

The decision was confirmed in a letter to the NSW government on Monday from Goodman's head of planning, Guy Smith. The letter cited "emerging federal and state policy" and feedback received through the planning process, including the views of the local community. The proposal, placed on public exhibition in March, would have required the demolition and excavation of four existing warehouses on the site.

The 28-metre-tall facility was to be built in the Lane Cove West industrial area, bordered by a park, low-density homes about 50 metres to the east and Lane Cove West Public School roughly 160 metres to the north-east. The plan drew sharp criticism from residents and from utility providers Sydney Water and Ausgrid, who said the development could strain existing infrastructure and increase electrocution or fire risks.

The project also came under scrutiny at a federal Senate inquiry into data centres and artificial intelligence last week, where Goodman executives appeared by audiovisual link. Technical problems plagued the appearance. Liberal senator Sarah Henderson described the proposal as "wholly unreasonable, and frankly a grossly irresponsible proposal which shows contempt for local residents".

Analysis

Why This Matters

The withdrawal shows that community resistance and utility concerns can force the abandonment of large AI data centre projects, potentially shaping where such facilities are built.
The decision comes amid rapid growth in data centre development across Sydney, a trend now under examination by a federal Senate inquiry.
It highlights growing tension between Australia's push for AI infrastructure and local concerns about amenity, safety and planning.

Background

Data centres are proliferating across Sydney, and their impact on surrounding suburbs has become a subject of growing public debate. The Project Mars proposal had become a flashpoint in that debate, drawing opposition from residents, utilities and politicians. Goodman Group's decision to withdraw its application reflects the increasingly contested environment for large-scale data centre development in Australia.

Key Perspectives

Local residents: Opposed the development over concerns about its scale, 24/7 operation and impact on the surrounding low-density neighbourhood. Utility providers: Sydney Water and Ausgrid said the development could strain existing infrastructure and increase electrocution or fire risks. Critics in politics: Liberal senator Sarah Henderson called the proposal "wholly unreasonable" and "grossly irresponsible", saying it showed contempt for local residents.

What to Watch

Whether the NSW or federal governments respond with new planning controls or policy guidance for large-scale data centre developments.
Whether Goodman Group pursues an alternative site or redesigns the project in response to the feedback.
The findings of the Senate inquiry into data centres and artificial intelligence, and whether they lead to regulatory change.

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