The South Australian government will spend three times what was initially forecast to finish building essential infrastructure at a housing development in Adelaide's south that was left in limbo following the collapse of a building company.

Key points:

· The SA government stepped in to build infrastructure and a road at a housing estate in O'Halloran Hill after the builder went into liquidation

· Tom Koustantonis says the government is spending nearly $3.5 million at the site

· Homebuyers expected to move into their properties two years ago

The state government announced in August that it would build a road and other essential infrastructure at a housing estate in O'Halloran Hill, where 20 homebuyers were left with half-built properties after the builder, Felmeri Homes, went into liquidation in July.

At the time, Premier Peter Malinauskas said homebuyers had not been able to use funds from mandatory building indemnity insurance to finish their properties due to the unfinished access road.

"Builders can't get access to actually do the work to fix these houses up because there's no way to get access," he said.

The government had said preliminary estimates indicated the cost to build the access road "may be in excess of $1 million".

On Sunday, the state's Transport Minister Tom Koustantonis said the government was now spending nearly $3.5 million at the site due to finding "so many defects".

"We found cabling that wasn't deep enough, stormwater that's inadequate with no provisions for guttering and stormwater as it should be. The retention basins weren't adequate to deal with it," he said.

 

Tom Koutsantonis called on the Marion council to waive residents' rates(ABC News: Che Chorley)

Mr Koutsantonis said the government was now having to retrofit some infrastructure.

"We're having to go back and do the work that should have been done before any building had been started," he said.

A project update provided to residents on December 4 said electrical services required further works as well as a fire main, plus communication services also needed to be installed.

Government calls on council to waive rates

Mr Koutsantonis said the local council, the City of Marion, had a "lot to answer for".

"They approved those houses being built before infrastructure was put in place and of course Felmeri went under," he said.

"The idea that the council would give a waiver to this company to start building properties before they put in the infrastructure as they should have with a deed is quite frankly, it's just appalling."

 

Felmeri Homes went into liquidation in July.(ABC News: Che Chorley)

Mr Koutstantonis said the government would "pursue every legal option we have" in regards to recovering the cost.

He called on the local council to waive residents' rates.

"I'm very, very disappointed in the way the council has conducted themselves and quite frankly they should be ashamed of themselves," he said.

The City of Marion Mayor Kris Hanna said in a statement that the problem does not lie with the council planning approval but rather with the builder.

"It is a driveway on private land which is uncompleted, not a public road. Council can't spend ratepayers' money to improve private property," Mr Hanna said.

He said the council was helping home owners through the council's rates hardship policy.

While the government has stepped in to finish the infrastructure, homebuyers have had to sign with new builders to finish construction on their properties.

Mr Koustantonis said contractors working on individual homes can go on site while the infrastructure is being built.

Homebuyer Edward Gilmore said according to the most recent timeline, he should be able to move into his property in May while the road was expected to be finished by July.

"We really hope that is the time frame and it doesn't blow out beyond that," he said.

"The biggest struggle we've had ... is trying to plan our lives really," he said.

Mr Gilmore, who now has a new builder, said he had signed the initial contract expecting to move in by Christmas 2021.

"This will be our fourth Christmas since we signed," he said.