Warning signs missed for months before disastrous McCrae landslide

A burst water main that leaked for months has been identified as the cause of a devastating landslide on the Mornington Peninsula, with a final report criticising the council and water company for missing the warning signs.

The January 14 incident destroyed a house and severely injured a council worker, who was forced to leap from the property. Numerous homes were then evacuated indefinitely.

The burst main, owned by South East Water, left 40.3 million litres – about 16 Olympic-sized swimming pools – of water leaking through the residential streets and drains of suburban McCrae for nearly five months.

The landslide was the last and largest of four slips that occurred between November 2022 and January 2025 on the same steep hillside in an otherwise quiet pocket of the peninsula overlooking Port Phillip Bay.

Months before the major landslide, McCrae residents raised the alarm with South East Water and Mornington Peninsula Shire about the huge volumes of water coursing through their bayside neighbourhood.

But the council and South East Water both failed to take effective steps, the final report from the board of inquiry into the landslide has found.

“The water roared in the stormwater drainage system. It bubbled up through the roads. It pushed up and cracked the bitumen. It created potholes. It flowed down the streets. It saturated and seeped from the nature strips,” the report states.

“For many weeks, no one knew the source of the water – not the residents, the Shire, nor SEW.”

The inquiry found that the two bodies failed to work together on the problem, operating in silos, and that neither responded with the urgency that the problem demanded.

“[N]either appreciated the seriousness of excess water accumulating in an area adjacent to a steep escarpment with high susceptibility to landslides. As a result, they did not respond with the urgency, nor view the situation through the appropriate lens that the situation demanded,” it found.

The report also found that the council responded inadequately to a geotechnical report it received in 2012, which classified the escarpment as highly susceptible to landslides. The 2012 report should have guided the council to update its erosion management overlays in McCrae, but no such work was completed.

The inquiry report was handed to the Allan government in September and published on Thursday with 30 recommendations, including that the council should urgently apply an interim erosion management overlay and improve its responses to water upwelling in landslide-prone areas.

It recommended that South East Water and the council obtain expert advice about the use of trench stops and carrier pipes to mitigate landslide risks around McCrae, particularly in high-risk areas.

“History should not repeat itself in McCrae. The Shire and SEW must change their approach to managing and mitigating landslide risk in areas of high landslide susceptibility,” it says.

The ultimate solution is likely to be costly and will take time to implement, including the use of engineered rockfill where the landslide occurred.

The owners of the destroyed house, Nick and Kellie Moran, issued a statement thanking the board for its compassion and professionalism, and criticising South East Water for its “catastrophic” failures.

They criticised the shire for “more than a decade of inaction that contributed to the disaster we are now living through”.

“Hopefully this now clears the way for progress,” the Morans wrote.

“The way some residents have been treated has been nothing short of disgraceful and it’s imperative that priority is placed on getting residents back home and safe. We also continue to think of the council worker who was injured, and we hope his recovery keeps improving every day, even 10 months on.”

The government said it accepts all 12 recommendations related to its role in landslide prevention in McCrae.

It will appoint an independent mediator to engage Mornington Peninsula Shire Council, South East Water and affected landowners in a structured process to reach an agreement on landslide mitigation and remediation works at and around the site.

The mediation process is expected to take three months.

Minister for Local Government Nick Staikos said it was crucial to hold an independent inquiry to allow residents to be heard and identify ways to prevent future landslides.

“The landslides have taken a significant toll on residents and I call on South East Water and the Mornington Peninsula Shire Council to work with the McCrae community to achieve the best possible outcomes,” Staikos said.

Mornington Shire Peninsula Council mayor Anthony Marsh said the shire was already progressing a number of the recommendations, with an interim erosion management overlay due to go to next week’s council meeting.

“This has been an incredibly difficult time for the residents impacted by the McCrae landslide and we will continue to work closely with them,” Marsh said.

“Community safety remains our highest priority and despite the inquiry wrapping up, our dedicated team continues to focus on getting the remaining residents safely back into their homes where possible.”

South East Water said it accepted all the board of inquiry’s recommendations and would appoint an independent expert to help implement them.

The state-owned company initially sought to dodge responsibility for the landslide, issuing a public statement three days after the collapse that “preliminary data from tests indicates the water is not from South East Water’s network”.

It said on Thursday that since the January landslide, it had installed more than 2200 digital meters to alert customers to private leaks on their properties.

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