'Fast-tracked' Dungowan Dam project misses $20 million Commonwealth deadline

The state government revealed this month that it missed a $20 million Commonwealth funding deadline for the dam's detailed business case on November 30 last year.

There is no current deadline for the completion of the business case. The project's environmental impact statement is due to be released this year.

READ MORE:

Tamworth MP Kevin Anderson, who was appointed water minister in December, said he was "pushing through a lot of red tape at the moment" as the new minister.

He said he'd issued "express instructions" with Water Infrastructure NSW to "get on with it" in line with community expectations - but didn't give an updated timeline for the project's business case.

"There are a number of issues that I'm working through and a number of questions that I'm waiting answers on," he said.

"I'm focused on what I can do going forward. You can't change the past. I've put a rocket up a number of people in the department now to get moving. You'll see some movement pretty soon on some of the issues in relation to Dungowan Dam and the department."

Want more local news? Subscribe to the Leader to read it here first

He declared that construction would start on the pipeline element of the Dungowan project on February 8.

His federal counterpart, deputy prime minister Barnaby Joyce, has taken a personal interest in getting the project moving as rapidly as possible, with both men telling the Leader they are in regular contact about the project.

Mr Joyce said the missed funding deadline for the fast-tracked project "worries me greatly".

"God I'd hate to see a slowtracked one," he said.

"If this is fast-tracked, what's standard fare?"

The deputy prime minister has long warned that the project has a ticking political clock. The next federal election, which must be held by May, could bring a Labor government which could remove funding support for the project, he said.

"The pipeline is great, thankyou, but it's not the dam," he said.

"There is no great problems getting approvals for a pipeline, but there is big problems getting approvals for a dam. I believe that we've found the money, because that's where the big cost it. We're ready to go. We've gotta get going on it."

The missed deadline was revealed in response to a parliamentary question on notice by Greens MLC and spokesperson for water Cate Faehrmann last year.

Under the national partnership for the national water infrastructure development fund, the state government committed to achieve "acceptance by the Australian government of the [Dungowan Dam] detailed business case", and "completion of infrastructure NSW gateway review" by November 30 last year. The funding milestone was worth $20 million.

Asked whether the department had met the deadline, then-minister Melinda Pavey answered "no" in a response on December 22.

Two earlier milestones, both worth $20 million each, have been met. The Commonwealth has committed $242 million to build the new dam, which was initially budgeted to cost $484 million.

"The department's failure to produce a detailed business case on time shows the extreme difficulty they're having trying to make this project stack up," Cate Faehrmann said.

"Dungowan Dam has seen already delays and cost blow outs and has now missed a critical deadline for Commonwealth funding before shovels have even hit the ground. The water minister needs to explain why his Government continues to support this massively flawed project."

Bev Smiles, a spokesperson for the Inland Rivers Network, a coalition of environment groups and individuals which was formed to press the government to consider water security alternatives to the dam, said the project has been off the fast track for a while.

She said the project had fallen behind schedule for a number of reasons, both good and bad, including coronavirus holding up the on-the-ground assessment process.

"Now, what does the failure to meet that milestone mean in relation to the funding agreement?" she said.

An inquiry by NSW Parliament which stopped just short of recommending the state government abandon the dam, said the state should investigate alternatives like water recycling "as a matter of urgency".

Ms Smiles said the project couldn't be rushed.

"Stage one of the pipeline has taken the role of any shovels in the ground, fast-tracked type language that was being used," she said.

Support the local news that keeps you informed - subscribe today.

"But the process of assessing a new large dam on an inland river is quite extensive. That had basically ignored in a lot of the statements that were being made with the early announcements. And it still appears to be ignored by some of our elected representatives."

Kevin Anderson said that even if the federal government withdraws from the project, the dam "will definitely happen".

When asked if the state would fund the whole project alone, he said "I don't deal in hypotheticals".

He also could not answer how the project would be depreciated - many local water users are concerned the bill may be paid by jacking up local water rates, already the highest in the state - or give a date for the release of a business case.

The Productivity Commission also slammed the project in a report released in early 2021, which said it had "poor viability". There also is concern the project could blow its budget. Updated estimates have put the cost at over $800 million.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: