Labor's Teri Butler: party won't back Dungowan Dam project if the party wins federal election until after business case is released

Shadow minister for water Terri Butler told the Leader that the party would not make a decision on the dam until after seeing its business case.

"Labor will consider water security projects on their merits, and we look forward to seeing the business case for this one," she said.

A federal election must be held by May next year.

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Tamworth councillor Russell Webb raised the alarm over the project a week ago, telling the Leader the "stalled" project could fall over after the election if works aren't underway by then, leaving the city with a "huge bill".

"I think there's a real message there, that if the NSW government wants to live up to its promise of building the dam, then they need to start doing something now," he said,

"They need to start doing some intermediary work. Get some stuff happening out there straightaway preparing for the next stage of planning. Need to get bulldozers on the ground."

Construction has been repeatedly delayed on the $484 million project since it was jointly announced by state and federal leaders in October 2019.

It is a fast-tracked project, but does not yet have a date for the release of a business plan, or environmental impact statement.

Tamworth Mayor Col Murray said he was remaining positive about the project.

"I always remain positive," he said.

"I'm sure that the business case will stack up. I'm happy to work with any government on these high community priorities."

State water minister Melinda Pavey refused to even give an updated deadline for the business case last week, after delaying its release again.

"Because," she said.

She blamed the Labor party for the project being imperiled.

The minister said the government would build the dam, whatever the cost.

Ms Pavey said on Tuesday that the state is "getting on with the job and we delivering for our communities".

Ms Butler told the Leader that the Liberal National coalition government had been in power for eight years at the federal level, and 10 at the state level.

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"But there is no dam, no contract, no business case, and frankly no credibility," she said.

"If they are pointing the finger, they should invest in a mirror. Someone else is always to blame with this mob. The Nationals are "doing a Morrison" and looking for ways to "avoid responsibility."

She said the government had committed to build 100 dams before they were elected, but had so far built zero.

"This project has been announced, re-announced, "fast-tracked", delayed and buck-passed, meanwhile the community has been left in the dark."

The project has come under heavy criticism by the Productivity Commission and an inquiry by a NSW parliamentary committee.

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The commission said the project would not create new water because the project was already in a fully-allocated water system and that the scheme would become financially unviable if the budget blew out.

Cr Webb said even iconic projects like the Sydney Harbour Bridge or Snowy Mountains scheme wouldn't have stacked up according to modern business cases.

"They consider the business case of today they don't consider the business case of 5, 10, 15, 20 years' time. That's where these projects fall over.

"When these projects fall over because that's the way they've considered them, we then end up in a very bad place into the future, be it maybe 5 or 10 or 15 years' time when there's, in this case, a drastic shortage of water."

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