Tamworth Dungowan Dam: Productivity Commission report divides politicians, ratepayers, irrigators and the local council

"This is a short-sighted analysis of a very significant project that will deliver jobs and continued growth for the Peel Valley," she said.

"Tamworth needs a new water source, and bureaucrats in Canberra suggesting this is not a viable option are absurd."

Ms Pavey said half of the town's water is used by industry, which goes toward putting food on supermarket shelves.

"You take water away from the farmers, then you have less jobs in the town," she said.

"The most expensive drop of water is the one we don't have."

The Productivity Commission report that condemns the $480 million Dungowan Dam project has set off a chain reaction of anger from politicians to the public on both sides of the fence.

BARNABY Joyce thinks infrastructure is the answer to Tamworth's water supply problems.

The Productivity Commission's report argued buying general security entitlements would cost just two per cent of the Dungowan Dam construction cost.

But the Member for New England said buying back water licenses would take production out of other sections of the local economy.

"You're basically robbing yourself to pay back yourself, and you're not creating any vital new storage which is the ultimate security for Tamworth," he said.

"I think the Productivity Commission is making a decision on Tamworth from probably Canberra, when they expanded the dams around Canberra I never heard them jump up and say, 'that's outrageous'."

The federal government has made a $242 million commitment to the project, which will take four years to build.

Asked if moving forward without the finalised business case expected to be completed later this year was bad process, Mr Joyce said Tamworth's water problems are the business case.

"I see the business case every time I drive into Tamworth and I see the water restrictions on," he said.

"I can see the business case every time a new person or business wants to move to Tamworth asks what the water security is like.

"The business case is self-evident. A city cannot grow without water."

THE MAYOR has said his top priority is the region's water security.

In a statement to media, Tamworth Regional Council mayor Col Murray said he believes the new dam and pipeline is essential to achieving a reliable water supply for the city, Moonbi and Kootingal.

"Council congratulates and supports the government on its funding of the new Dungowan Dan and pipeline and will await the presentation of the business case later this year," he said.

IT'S the ratepayers who will inevitably get the short end of the stick if the new Dungowan Dam project moves ahead, Tamworth Regional Ratepayers Association (TRRA) president and head of the local water security alliance David McKinnon said.

The Productivity Commission report argued any increases in construction costs would likely result in the project becoming 'unviable'.

If that's the case, the project shouldn't move ahead, Mr McKinnon said.

"We know these things blow out, there's rarely a project of this scale that hasn't blown out and that is a key point in this report," he said.

"It's extremely irresponsible, the people who have to pay are the ratepayers and taxpayers when so much of this appeared to be a political manoeuvre.

"This is one of the wettest years in a long time and Chaffey Dam is still only at 40 per cent, storage is no great remedy and that's all Dungowan really offers, is storage."

A CITY the size of Tamworth has to better manage its water supplies, not add to storage, local councillor Mark Rodda said.

The new 22.5GL Dungowan Dam represents an extra 6GL of storage each year on average, according to the Productivity Commission report.

Water storages around the region have been stretched for some time, with Chaffey Dam sitting at 41 per cent, the old Dungowan Dam at 93 per cent and Split Rock Dam at 12 per cent.

Other options like water purification or recycling should be investigated by the state and federal governments, Cr Rodda said.

"I believe the government was in a panic and they thought collectively the image of a city the size of Tamworth running out of water would altogether crush the government," he said.

"We have to ask, are there better alternatives that won't impact others? That won't leave another big hole in the ground in the region that won't be full?

"Even with a good year of weather events they [existing dams] aren't full, that's the risk we run on the 22.5GL dam albeit it is in a more reliable area."

LOCAL irrigator Ian Coxhead has questioned some of the points made in the Productivity Commission's report.

"There's so many mistakes in that report that if it wasn't serious it would be laughable," he said.

"They have the Dungowan Dam as being on the Peel, it's not even in the Peel Valley it's in the Dungowan Valley, so nothing impacts on Peel irrigators.

"The dam is fully-funded under emergency water infrastructure projects and the new Dungowan Dam will be primarily for Tamworth Regional Council's use.

"There won't be any water allocated to Peel Valley irrigators, possibly some to Dungowan Creek irrigators."

Without the water security a new dam would provide, Mr Coxhead said big industry won't look at Tamworth.

"It must go ahead, if Tamworth is to progress anywhere to near 100,000 people it has to have more water security than what one dam will provide," he said.

"There should be more dams built to be honest."

LOCAL MP Kevin Anderson has remained silent on the Productivity Commission's damning report into the new Dungowan Dam build.

The Leader contacted Mr Anderson for comment, less than a week after he joined NSW Water Minister Melinda Pavey's announcement that the new dam would have enough water to sustain a population of 120,000 people.

A spokesman for Mr Anderson said he declined to comment.