Plans for a controversial data centre in a Sydney suburb have been abandoned following sustained resistance from local residents and campaigners. Goodman Group, Australia’s largest property developer, confirmed it is withdrawing its application for the facility, known as Project Mars, which was proposed for the Lane Cove area.
The withdrawn proposal would have seen the construction of a 90-megawatt, A$1.2bn (£630m; $841m) facility located approximately 20 metres from the nearest residence. In a letter addressed to the New South Wales Department of Planning, Goodman Group stated that it had thoroughly reviewed technical investigations and community feedback since initiating the planning process in March 2025.
The company acknowledged that the policy and regulatory landscape for large-scale data centre development had shifted significantly during this period. Citing the need to carefully consider these changes alongside local community sentiment, Goodman concluded it would not proceed with the development.
The dispute highlights a growing national tension in Australia regarding the expansion of data centres. As generative AI becomes mainstream, demand for these facilities has surged, positioning Australia—thanks to its clean energy supplies, natural gas reserves, and available land—as a key global destination for construction. However, while the federal government seeks to attract AI investment, state and local authorities face stiff opposition due to the substantial water and energy demands of these sites and the disruption they cause to neighbourhoods.
Project Mars attracted a record 374 submissions during its consultation phase, with only nine supporting the proposal. According to the local news outlet In the Cove, this represents the highest number of submissions ever recorded for a data centre application in the region.
The withdrawal comes just one month after the New South Wales government announced a fast-track approval programme for data centres. The new framework allows developments to be assessed within 75 days, provided they meet specific standards and fund additional water and energy supply infrastructure.
Anthony Roberts, the New South Wales Legislative Assembly member for Lane Cove, hailed the outcome as a significant victory. Posting on the Lane Cove Responsible Planning Group Facebook page, Roberts described it as a “common-sense win” that sends a clear message to other developers to identify suitable locations before submitting proposals.
“Data centres have an important role to play, but developments of this size and scale need to be appropriately located and planned with the surrounding community in mind,” Roberts said.
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