The cost of cleaning up pollution at the Barangaroo site on Sydney Harbour is projected to blow out to $400 million – at least four times the original reported estimate.

In 2009, the NSW Environment Protection Authority ordered the Barangaroo Development Authority (BDA) to remediate the area, which had previously been used as a gasworks and for maritime industrial purposes.

A complex process is under way to remove coal tar, cyanide, zinc, benzene and a range of other contaminants from both the Barangaroo construction site and Hickson Road at Millers Point.

The contaminated area doesn’t include Barangaroo Reserve and won’t affect the use of the popular headland park.

The remediation, a process independent of the development of the $6 billion, 22-hectare site, was reported to cost an estimated $98 million in 2010.

And as recently as last year, the NSW EPA estimated the remediation of a “small section” of the Barangaroo site to cost between $50 million and $100 million.

But in a report into the state’s central agencies released last week, NSW Auditor-General Margaret Crawford found the cost of the remediation is now projected to cost the authority in excess of $400 million.

The increase is “mainly due to the extent of the remediation, as more evidence of contamination has become known”, the report said.

“Measuring the remaining costs to remediate requires the use of estimation techniques and judgements, making the actual outcome inherently uncertain.”

It’s understood that as well as the scope of the remediation increasing, the new price tag is also due to a decision to remove the contamination in full instead of treating it on site.

In its latest update on the project in August, the NSW government said 68,000 tonnes had so far been removed from the site and relocated to EPA licensed facilities.

The cost will be shared between the BDA and LendLease, with a contribution from energy infrastructure company Jemena, which operated the gasworks until 1921.

The distribution of the costs was settled confidentially and BDA would not comment on the Auditor-General’s estimated cost.

“The remediation of this heavily contaminated site on the foreshore of Sydney Harbour will be a further important, and permanent, contribution by Barangaroo to the vibrancy and health of our beautiful harbour city,” a BDA spokeswoman said.

-AAP