Construction costs and potential impacts to the environment are the basis for which the NSW Government has cancelled the Wyangala Dam Wall Raising Project.
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Citing "billions of dollars in construction costs and the potential catastrophic environmental impacts", the government announced it would not go ahead with the project which would have seen the dam wall raised by 10 metres.
Minister for Water Rose Jackson said the final business case and the independent Infrastructure NSW review recommended not going forward with the project because it doesn't stack up financially or environmentally.
"Robust investigations show that while raising the wall by 10 metres is technically feasible, it could cause substantial and irreversible environmental impacts," Ms Jackson said.
"Hydrological modelling also found raising the wall, with a five-metre flood mitigation zone, was also likely to have devasting impacts on the internationally significant downstream environment, resulting in excessive biodiversity offset costs.
"The other major issue is the billions of dollars to build the dam wall.
"We have a responsibility to taxpayers to only fund infrastructure projects that provide maximum bang for the buck and, in this case, the capital costs are too high, and the benefits are too low."
The announcement came as shock to NSW Farmers water taskforce chair Richard Bootle who said the association was very disappointed in the decision.
"We're obviously very disappointed that this decision has been made," he said.
"It's very short-sighted. This was an opportunity to store more water in the wet times, especially given what we saw last year.
"We had the worst flooding down that particular catchment and if we had a higher dam wall, it would've prevented a lot of that flooding.
"Plus we're going into a dry year now. We could have had more water for crops and towns along the way.
"It just doesn't make any sense at all."
Mr Bootle said the announcement came as a surprise.
"Obviously there was budgetary pressures and it's sort of like, where are the least votes?
"But I just think it's a really short-term view of projects like this.
"Dams have a huge payback period. Every dam ever built has a very long payback period.
"Financially, if you did the costings on the infrastructure damage from the flood events in this catchment last year, not even lost lives, production, devastation and all the rest, but if you just looked at the amount of damage done last year, it would've paid for the dam wall straight off.
"And that's just one event. With global warming, we are going to have dry times, but we are going to have these larger storm fronts coming through at more regular intervals.
"So it just seems like a no-brainer now to get the infrastructure in place before we see some of the increasingly bad effects.
"Last year was bad, but it's not going to be the worst."
Mr Bootle believes the benefits of the project would have been felt far and wide.
"Last year's flooding washed out one of the major transport routes across NSW, going from Victoria to Brisbane, the Newell Highway.
"So what are we going to do, just keep replacing the Newell the whole time? It's nonsense. I just think it's incredibly shortsighted and we're incredibly disappointed with this.
Ms Jackson said the government would investigate other methods of shoring up water security for those relying upon water from the Lachlan.
"While Wyangala is not viable, I recognise the challenges of water security, reliability and flood mitigation for Lachlan communities do not go away," she said.
"We know there's a drought knocking on our door threatening the water security of towns across NSW which is why we are reviewing our strategies as a priority.
"The former government wasted time and money on business cases instead of undertaking any real drought preparedness work.
"The NSW Government is now taking action because we know the region needs a multi-faceted approach to protect against uncertainties and balance the competing needs of our environment, towns, and farmers."
Stakeholders will have an opportunity to have their say as the NSW Government seeks feedback on how it plans to address these issues.
The draft Lachlan Regional Water Strategy will go on public exhibition before the end of September, allowing affected individuals, communities and farmers to have their say on water security.
Decisions about the future of water in the region will be based on evidence and state-of-the-art climate modelling, according to Ms Jackson.
"We want to support economic growth and balance different water needs, ensuring there's the right amount of water for the right purpose at the right time," she said.
"I encourage everyone across the Lachlan region to provide their input when the draft strategy goes on exhibition, because feedback from councils, industry and the community will play a vital role in helping us determine the best way forward."
One party pleased with the decisions was the Wyangala Counterpoint Group who said it was "a wise decision to not waste any more public money on raising the Wyangala Dam wall".
The group believes the project would have caused "major environmental and social damage while achieving little improvement in water security or mitigation of extreme flood events".
"This decision now protects prime agricultural land and the beautiful old Red Gums, as well as 1700 hectares of threatened grassy box woodland that would have all been drowned if the dam wall was raised," Upper Lachlan landholder David Webster said.
"We are all very relieved that this overhanging threat has now been lifted."
