Following the Federal Government's decision last night to withdraw funding, the NSW Government will not proceed with the Dungowan Dam project.
This follows advice from various experts and agencies, including Infrastructure NSW, that the Dungowan Dam project should not proceed.
Minister for Water Rose Jackson said the move will save NSW taxpayers $632 million and would enable the NSW Government to look at more affordable and effective water security options for the region.
In the coming weeks, the NSW Government will be releasing the final Namoi Water Strategy which will outline the path forward and plan to improve water security in the region.
"We know there is a major water security issue in this region and we are committed to addressing it but at the end of the day the numbers didn't stack up," Minister Rose Jackson said.
"Both Infrastructure NSW and Infrastructure Australia had serious concerns about the cost-benefit ratio of the new Dungowan Dam and did not recommend putting this project on the infrastructure priority list, and now the Australian Government has pulled funding for the project.
"On top of this, I have always had serious concerns about the viability of the project because it would take 10 years to build and fill the new dam, putting the region's shorter-term water security at serious risk.
"It is going to take more than just a new dam to solve the water security issues for Tamworth. It is why I am now receiving briefings from my department on a range of infrastructure and non-infrastructure options that could be implemented within a shorter timeframe.
"In coming weeks, I will be publishing the final version of the Namoi Regional Water Strategy that puts forward a shortlist of options that will boost drought resilience for Tamworth.
"But I want to be clear that any projects we support must be affordable and effective and are not increase the divide between agriculture and the environment."
Some of these options include advanced water treatment plants, purified recycled water facilities along with water efficiency and demand management options to make existing water supplies go further.
The other ideas on the table include inter-valley pipelines from the west of Tamworth between Keepit Dam or Split Rock Dam and from the east of Tamworth from the Manning Valley. There are also off-river storages and better use of the reserve in Chaffey Dam in the mix.
"We need to investigate every option and whatever decisions we make will be based on evidence, including state-of-the-art climate science, so Tamworth is in a stronger position to manage water in a drier climate," Ms Jackson said.
The NSW and Australian Government's funding for stage 1 of the pipeline has not been impacted by the Federal Budget. The pipeline is due for completion mid-2023.
