Prime Minister expected to announce Dungowan dam funding soon

New England MP Barnaby Joyce said further details would remain a mystery until Scott Morrison returned.

The long-proposed Dungowan dam upgrade has hit multiple hurdles over the years and Mr Joyce acknowledged the community was most likely sceptical of the funding promise.

"I'm probably with them on that one," Mr Joyce said.

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"But the PM is fully aware of the situation. The last conversation I had with him, he brought up that dams were the number one issue in my electorate.

"All I can say, is that I've been pursing Dungowan for years now and it's absolutely essential it gets built. Otherwise, a major city of regional Australia will run out of water - if not this drought, the next one."

With an estimated price tag of $484-million, Mr Joyce said a project of this size would also need funding from the state government.

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"I look forward to a substantial move by federal and state governments to alleviate the water pressure on Tamworth," he said.

"It also removes substantial political risk if nothing gets started."

The Mole River Dam, near water-stricken Tenterfield, was also listed to receive funding. However, the dam is expected to be of more benefit to the electorate of Parkes.

"That's been talked about as a three-way funded project between the state and the feds, with some from the growers," Mr Joyce said.

A spokesperson for Deputy Prime Minister Michael McCormack, who also holds the infrastructure portfolio, said the government was looking in to a range of projects to secure water in to the future.

"We can't make it rain, but we can invest in the right infrastructure so that when it does rain again we can capture it and deliver the water to where it's needed most," they said.

"That's why we're working with the NSW Government about its priorities and why we're establishing the National Water Grid Authority."