![The initial estimated cost of the new Dungowan Dam was off by two-thirds because it didn't take into account a range of factors including "potential property leases and/or land acquisitions". Picture from file The initial estimated cost of the new Dungowan Dam was off by two-thirds because it didn't take into account a range of factors including "potential property leases and/or land acquisitions". Picture from file](/images/transform/v1/crop/frm/andrew.messenger/875e1846-1a40-4853-b5f5-40d5eb29b78e.jpg/r0_0_3753_2282_w1200_h678_fmax.jpg)
The initial estimated cost of the new Dungowan Dam was off by two-thirds because it didn't take into account a range of factors including "potential property leases and/or land acquisitions".
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And the state government could spend a mere $120 million on environmental offsets for the new Dungowan Dam, with almost the entire $1.3 billion budget set to go to construction work.
Member for Tamworth and Minister for Lands and Water Kevin Anderson told the Leader that a total cost breakdown would not be made publicly available, as it would reveal information that is commercial-in-confidence.
However, he said that early funding announcements "were based on preliminary assumptions about the design and potential impacts."
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"They did not consider factors such as detailed design, potential property leases and/or land acquisitions and did not factor in the details we now have about ground conditions and appropriate construction methodologies," he said.
"The new estimates also factor in the significant increases in construction costs as we have seen across all infrastructure projects, due to high inflation and supply chain challenges."
There has long been speculation that the reason the cost of the project exploded from an estimated $484 million to nearly treble that number, was due to the need to buy offsets for environmental damage it would case.
But the Leader understands that the state government budgets to spend just $60 to $120 million on environmental offsets, about 5 per cent to 10 per cent of the total bill.
University of New South Wales professor Stuart Khan said the new information showed "we shouldn't pretend it's about environmental offsets if it's not."
He compared the Dungowan project, which will inundate a valley that's already dammed, with Sydney's Warragamba Dam project, which would affect UNESCO world heritage listed areas.
"It's simply the cost of building a dam," he said.
"All dams involve inundation. They involve loss of some kind of land, whether it's private property, whether it's forest. You're storing water somewhere so that it's always part of the cost."
Tamworth Water Security Alliance member Graham Carter said the project had just been underbudgeted when it was initially scoped out.
"The choice to build, the starting point wasn't a choice about what was the best option," he said.
"It was blinkered from the start. It was a political decision."
Mr Anderson defended the dam as a good project and an economic boost for the city.
"You cannot measure the value of major water infrastructure projects in dollars alone," he said.
"Building a new dam and pipeline will create hundreds of new jobs, generate millions of dollars for the local economy and will future proof the region to support population growth.
"Detailed information around environmental offsets will be made available in the environmental impact statement, which is due to go on public exhibition before the end of the year."
The project's future hangs in the balance, because the new Labor government has yet to commit to fund its half of the cost of the dam.
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