A report that warned of heightened flood risks at a major West Belconnen shopping centre was kept secret until after the ACT government allowed more residential and commercial development in the area.
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A study completed last year found more buildings at the Kippax group centre in Holt could make the risk of flooding worse.
The study said priority should be given to flood mitigation works as a one-in-a-hundred chance flood would likely inundate residential blocks.
The report, commissioned by the ACT's planning authority to update a 2015 study, said the cost of mitigation works would be close to $2 million.
The report warned further development of the Kippax group centre "may exacerbate these existing flooding issues and introduce more people close to the flooding risks if the recommended mitigation measures are not undertaken".
The ACT government expects an expressions of interest process to begin later this month for the sale of land behind the Kippax Fair shopping centre.
The land was rezoned last year to allow for residential and commercial development up to six storeys.
The flood study, completed by Calibre Group and obtained by the Sunday Canberra Times, found the rezoned areas within the group centre offered limited development opportunities without flood mitigation.
"These flooding issues need to be addressed with or without the expansion of the Kippax Fair proceeding. These works recommended, or a portion of them, could be included within any significant development proposal for the area," the study said.
The study said the width of the Southern Cross Drive underpass should be doubled, regrading work completed and a new levee should be added to the stormwater network at the corner of Flack Street and Moyes Crescent.
"Priority should be given to all of the flood mitigation works as the flood study results indicate ... existing blocks have the potential of flooding during a 1 per cent AEP storm event," the report said.
But the ACT government says the flood study was sufficient for rezoning the land because it showed flood risks could be managed.
"Recommended floodway improvement works, and water sensitive urban design works are not considered to be critical for public safety for the future development of the site," an ACT government spokesman said.
"The future developer of part Section 51 will be required to undertake their own due diligence and works as part of their development in line with the study."
Asked if the ACT government would commit to the flood mitigation work outlined in the Calibre report, the spokesman did not provide a direct response.
The spokesman said the ACT government had completed substantial community consultation in developing the Kippax master plan and varying the territory plan.
The master plan, completed in 2019, revealed the ACT government's plan to transform the area into a major hub for Canberra's growing western region.
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However, the ACT government told the Christodoulou Group, the owner of Kippax Fair, its application for a direct sale of blocks in the group centre would be blocked.
"The ACT government has not found the Christodoulou Group eligible for a direct sale of this land," the letter said.
"The ACT government will now proceed to sell the land to the market through a competitive sales process. Due diligence will be undertaken in the coming months in preparation of the land being taken to market."
The Christodoulou Group presented its plans for a redevelopment and expansion of Kippax Fair, if it wins the tender, to the Belconnen Community Council in March. The plans included new pipes to carry overland water flow.
The expansion would deliver "effective and environmental management of stormwater including a new detention basin and undergrounding existing overland stormwater flow pipes to realise additional public open space for the benefit of the community", the group's presentation to the meeting said.
A 2015 draft master plan for the Kippax group centre recommended redeveloping open-air car parks, which both a 2015 flood study and the updated 2020 study found presented no flooding risk.
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