NSW dam projects in doubt amid cost blowouts and environmental concerns

Wyangala and Mole River projects on hold and Warragamba raising under review, with new premier Dominic Perrottet open to alternatives

Two major dam projects in regional New South Wales have been indefinitely postponed because of massive cost blowouts, while the plan to raise the Warragamba dam wall west of Sydney is under review.

The Wyangala and Mole River projects were pre-election commitments made at the height of the drought and announced with much fanfare by the then NSW Nationals leader John Barilaro.

But they have been criticised as doing little to improve water security during drought conditions while having significant environmental impacts.

A third project, the $484m Dungowan dam project, is still on the cards, despite the Productivity Commission criticising it as “flawed”.

The project, which is designed to deliver more water to Tamworth, does not have a business case and was a “costly way” to deliver more water to the town, the commission found.

Meanwhile, the review of the plan to raise the Warragamba dam wall by 14 metres comes after the costs of the project rose to $1.6bn – which does not include the cost of buying offsets to compensate for the damage it will do to world heritage listed areas of the Blue Mountains national park.

The NSW premier, Dominic Perrottet told estimates on Thursday that he had an open mind on the project and would be prepared to look at other alternatives to better protect western Sydney from flooding. “It would be remiss of any government not to look at alternatives,” he said.

Water spills over the Warragamba dam in March during heavy rain and flooding across Sydney and NSW.
Water spills over the Warragamba dam in March during heavy rain and flooding across Sydney and NSW. Photograph: WATERNSW/PR IMAGE

A plan to raise the wall on the Wyangala dam by about 10m would have increased storage capacity in the Lachlan river valley in western NSW, but there was scepticism about how often the dam would fill, particularly in dry years. Sources said it was deferred but not officially dumped, pending further assessment.

The project originally had a price tag of $600m. But as the Guardian reported in 2020, the estimates for building the dam had risen to as much as $1.5bn because of the soaring costs of biodiversity offsets.

The Mole River dam project, in north-west NSW, also had real questions about its viability and was opposed by the community. The main beneficiary of the project would have been the cotton industry as there are no significant towns that would have benefited. It is believed to now be off the agenda.

The projects had been strongly advocated by Barilaro, who has resigned along with former premier Gladys Berejiklian.

The change of leadership in NSW appears to have prompted a rethink on several environmental issues.

Last week, the environment minister and treasurer, Matt Kean, used an estimates hearing to announce the Perrottet government would look to reform environmental offset schemes on both a policy and an integrity level after an investigation by Guardian Australia revealed what he described as “appalling practices”.

On Thursday, the deputy premier, Paul Toole, told another estimates hearing he would move to stop proposed coal exploration in two areas near the Wollemi national park.

Toole said there were social and commercial problems associated with the project and he would be recommending cabinet rule it out.

The Greens MP Cate Faehrmann, who has chaired an inquiry into the controversial dam projects, said the reversals on the dams were a huge win for the environment and for downstream communities who would have been affected.

“These National party duds have been a terrible idea from the outset,” she said.

“The government has been unable to bring a business case forward for either of these projects because they just don’t stack up. These dams were set to provide marginal if any increases in water security at an outrageous price.

“While the likely scrapping of these two projects is great news, it is very concerning to hear that Dungowan dam is likely to proceed. These three projects were announced in the one breath, with no business case or rationale other than to secure National party electorates. Dungowan dam is as much a dud as the other two.

“The water minister now needs to go back to the drawing board and consider non-infrastructure options like water recycling and efficiency projects,” she said.


Anne Davies and Lisa Cox

The GuardianTramp

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