An Upper House inquiry has found the NSW government has not demonstrated that raising the Wyangala Dam wall is a cost-effective or sustainable solution for achieving a reliable water source for the Lachlan Valley.
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The damning finding was released in part one of a two part report from the inquiry, which was tasked with looking into the rationale and impacts of, new dams and other water infrastructure.
Part one of the report examines the proposed raising of the Wyangala Dam wall, while part two will examine the other projects investigated, including the Dungowan Dam rebuild, as well as the Macquarie River re-regulating storage and Western Weirs projects.
On the raising of Wyangala Dam, chair of the committee undertaking the inquiry, Greens MLC Cate Faehrmann said "the Minister for Water committed to this project without a business case or environmental assessment."
"Two years later we still don't have either, yet many witnesses provided evidence that they assumed the dam was going ahead despite this."
Ms Faehrmann said the committee heard from many witnesses about the negative impacts of dams on downstream communities and ecosystems, with the threats posed to internationally significant wetlands and threatened bird species particularly compelling.
The project aims to increase Wyangala Dam's storage by 53 per cent, which the government has said would create capacity for an additional 650 gigalitres.
However, the report found that the annual yield available as a result of increasing Wyangala Dam's capacity by 50pc would provide only a 21GL increase in water security.
The project was part of the $1.1-billion dam building package announced by the federal and NSW governments in October 2019 and was estimated by the government to cost $650 million, however subsequent estimates reported in the media have been as high as $2.1 billion.
The report said the committee heard evidence that "although NSW Government representatives said they were unable to provide an updated estimate of the cost of the project prior to the business case being finalised, it is likely that it will significantly exceed the initial approximation of $650 million."
Ms Faehrmann described the evidence of a potential cost blowout as "concerning."
She also stated alternative options to addressing water security in the Lachlan Valley were not given due consideration before the government announced it would raise the Wyangala Dam wall.
There were two Dissenting Statements attached to the report, including one from National party member Ben Franklin and Liberals Shayne Mallard and Catherine Cusack.
Their statement said "the NSW Government has learnt from the droughts that have been a near constant feature of the past 20 years and is committed to building the infrastructure needed to secure Lachlan Valley water supplies."
"The Dam wall raising is an important component of improving water security in the Lachlan Valley, however there are other projects and policy solutions that will need to be undertaken in the Lachlan Valley to improve maximise water security outcomes."
The statement also referenced the floods of 2016 where they said an additional 650GL could have been captured had the dam wall been higher, providing more than two extra years of water to run the Lachlan River and supply every town, stock and domestic and high security water user.
The second Dissenting Statement was from Ms Faehrmann and made three recommendations including that the NSW Government "not proceed with the raising of the Wyangala Dam wall due to the significant and persuasive arguments against the project."
A spokesperson from NSW Water Minister Pavey's office said the Government will review the draft report and consider its recommendations in due course.
"In the meantime we will continue on working towards improving water security for the Lachlan Valley and regional NSW," they said.
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