Tamworth, NSW

Following Infrastructure Australia’s independent assessment of the new Dungowan Dam and Pipeline business case, the proposal has not been added to the Infrastructure Priority List.

The proposal aims to increase town water supply for Tamworth and maintain water reliability for agricultural production in the Peel Valley. 

The proposal was developed in response to long periods of drought and water restrictions. At a time in 2019, Tamworth was 12 months away from running out of water from its primary water source, the Chaffey Dam.  

The project has a capital cost of more than $1 billion and a benefit cost-ratio of just 0.09. 

Although it offers sustainability and resilience benefits, Infrastructure Australia’s assessment found that similar community benefits could be achieved through a combination of lower cost build and non-build options.

These include increasing the amount of water from Chaffey Dam that is available for urban use, along with policy changes such as demand management and water use efficiency measures.

Infrastructure Australia has said it would welcome a revised business case for an investment solution that better aligns to the identified problems and opportunities for providing increased water security to the Tamworth region. 

Infrastructure Australia Chair, Col Murray, declared a conflict of interest in relation to the project and was not present during any discussion or decision-making relating to the business case assessment, in line with Infrastructure Australia’s Conflict of Interest Policy.  

Despite this assessment, the NSW Government’s recently released Summary Business Case believes the New Dungowan Dam and Pipeline project to be the answer to securing Tamworth’s future water needs. 

NSW Minister for Lands and Water and Member for Tamworth, Kevin Anderson, said the summary business case shows the New Dungowan Dam and Pipeline is the only project that ticks all the boxes including diversifying water sources, increasing town water supply, boosting drought security, and maintaining water for agriculture needs.

“The business case makes it very clear – building the New Dungowan Dam and Pipeline is the only solution that will future-proof the water supply for Tamworth without impacting the $2 billion a year agricultural industry,” Mr Anderson said.

Mr Anderson has said building the New Dungowan Dam and Pipeline will nearly halve the risk of the towns running out of water during droughts, serving as a turning point for water security in Tamworth and the Peel Valley. 

“If we don’t build the dam and pipeline, we are back to ground zero. It takes years, sometimes decades, to get infrastructure projects shovel ready, but subject to a co-contribution from the Commonwealth, the New Dungowan Dam will have bulldozers in the ground by 2023, once the appropriate planning approvals are in place.”

Mr Anderson also highlighted the need to consider the real risks that climate change presents to water supply, including the cost of relocating towns without adequate water and the risk of farmers walking off the land.

“Resolving water security in the Peel Valley is estimated to enable millions of dollars in investment and thousands of new local jobs,” Mr Anderson said.

The Summary Business Case contains elements of the Final Business Case that protects information that is Cabinet in Confidence or Commercial in Confidence.

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