MORNINGTON Peninsula Shire and South East Water (SEW) have issued a joint statement that agreement has been reached with some affected residents, facilitating critical works to be undertaken, and providing a pathway for residents to return to their homes.
The board of inquiry’s report into the McCrae landslide of 14 January 2025 found the landslide, which destroyed a house and injured a council worker, was due to a burst water main owned by South East Water (SEW).
Inquiry chair Renée Enbom KC found the burst water main was located 450m south of the destroyed property, near the corner of Bayview Rd and Outlook Rd. Prior to its repair on 31 December 2024, the water main leaked 40.3 million litres of water undetected; the equivalent to approximately 16 Olympic-sized swimming pools.
In the months leading up to the landslide, McCrae residents reported concerns and complaints about water in the area. It was creating potholes, flowing down streets, bubbling up through the roads, and saturating nature strips. The report concluded the shire did not share information with SEW regarding the high landslide risk in McCrae and that overall “landslide risk was, and is, largely forgotten”.
Recommendation One of the board of inquiry’s findings was that “a Victorian Government Minister appoint an experienced mediator to engage in a structured process with the Shire, SEW, affected landowners and any other necessary parties, with a view to reaching agreement in relation to appropriate landslide mitigation and remediation works at and around the site of the McCrae Landslide”.
Recommendation Two was that to inquiry “recommends the Shire and SEW appoint or engage a suitably experienced individual to lead and oversee their participation in the mediation process, with a view to bringing a fresh and pragmatic perspective to the issues”.
In January this year, Dan Star KC was appointed mediator, and the mediation process began.
On 20 March, the joint statement from the shire and SEW stated that “Significant progress has been made addressing the consequences of the McCrae Landslides”.
“Agreement has been reached with some residents during the mediation process, and Mornington Peninsula Shire Council and South East Water both consider that this will facilitate critical works to be undertaken and provide a pathway for residents to return to their homes.
“In close consultation with the most affected residents, the design of these critical works is being progressed. While the formal mediation process has now concluded, Mornington Peninsula Shire Council and South East Water are both committed to ongoing engagement to address remaining issues.”
A total of 19 properties were originally evacuated. Eleven properties have had emergency orders lifted and those residents are allowed to safely move back into their homes.
No affected parties were willing to discuss the progress of the mediation with The News understanding they were bound by strict confidentiality clauses.
One source from among the affected parties told The News “We are working very hard with the shire and South East Water towards a speedy agreement”.
First published in the Mornington News – 24 March 2026
