Water shifting: NSW govt reconsidering Dungowan Dam upgrade

Throughout the recent state election campaign, Mr Anderson pushed for Chaffey Dam to be expanded by a further 20 per cent, taking its capacity to 120GL.

However, Mr Anderson said he's since been given advice by government water experts that upgrading Dungowan from 6.3GL to 22GL is the best long-term option.

NSW Water Minister Melinda Pavey also backed the Dungowan Dam upgrade as a "good option" and said the government would "focus on getting that to business case as soon as possible".

It's a significant change in position from the state government - up until recently, the Dungowan Dam upgrade appeared all but dead in the water due to its $484-million price tag.

"I can understand that the community here is probably frustrated by the amount of talk around Dungowan Dam and its expansion," Ms Pavey said.

"But I also know we have $1.4 billion on the table from the Snowy Hydro legacy fund. The federal government has another $1.3 billion."

Mr Anderson threw his support behind the project in a speech to the parliament last week.

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"The Dungowan Dam is [a long-term option] that is certainly on the horizon and has the capacity to meet our water security needs well into the future," Mr Anderson told his parliamentarian colleagues.

"A second Dungowan dam could be constructed in front of the existing Dungowan Dam. Land has already been purchased by Tamworth Regional Council.

"A dam wall would need to be built in front of the existing dam, which would serve as the second Dungowan dam.

"The proposal is that when the original Dungowan Dam overflows the second dam would be filled up."

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