Barnaby Joyce announces Commonwealth will spend $38 million on Merriwa to Willow Tree road upgrade in Upper Hunter Shire Council

But they're not trusting the local council to complete the second upgrade in just three years, alone.

After a botched $12.2 million upgrade by local councils, the road, which connects the Golden Highway and New England Highway, has been impassable since 2021.

Deputy prime minister Barnaby Joyce told media on Saturday that the $48 million total budget for the project was a big price-tag for a mulligan.

This time, state government engineers will oversee the repair, he said.

"I was very disappointed that it didn't happen right the first time," he said.

"I don't like spending the taxpayers' money twice on the same project.

"Now we're going to make sure we've dealt with that."

Mr Joyce said the road was important enough to warrant two attempts.

Road 358 is an alternative route to the New England Highway to cross the Great Dividing Range and also removes the need for traffic to travel via Scone, cutting about 44km off the journey.

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It's also an important road for agriculture, allowing landholders in the Liverpool Plains to shift cattle in a more efficient way.

"This is vitally important," he said.

The state government will spend $9 million on the upgrade, which is expected to take about two years to complete.

The project was funded in the budget, so the upgrade will happen whoever forms government.

Minister for Regional Transport and Roads Sam Farraway said the link was not only crucial for the freight industry, but also will serve as a safer and more efficient connection for the local community.

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"It means trucks will once again come through their towns, stopping in at local cafes and bringing back economic certainty to Merriwa and Willow Tree," he said.

State Member for Upper Hunter Dave Layzell said the long wait for a fix had put strain on the community.

"The ongoing closure of MR358 is having an immense impact on Upper Hunter communities, forcing people to take lengthy journeys because they do not have a direct route between Merriwa and Willow Tree," he said.

The delivery of the project will be led by Transport for NSW wi,th preparation of a strategic and financial business case to be prepared under Transport for NSW's Investment Assurance Framework.

Road 358, also known as Coulson's Road, began to crumble after heavy rains in early 2020, just months after the route was completed. In 2022, the council pleaded for millions of dollars from federal and state governments to fix up scores of landslips and other problems, which rendered it completely impassable in 2021.

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