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ABC News
ABC News

Barnaby Joyce rejects criticism of Tamworth's billion-dollar Dungowan Dam

New England MP Barnaby Joyce says he'll continue to argue for the new Dungowan Dam. (ABC News: Matt Roberts)

Former Nationals leader Barnaby Joyce has dismissed an independent report critical of a $1.3 billion dam proposal in his electorate, saying the report is "wrong" and the dam should "absolutely" go ahead.

Infrastructure Australia found there was "insufficient evidence" for the proposed $1.3 billion Dungowan Dam near Tamworth, and criticised the business case as "poorly substantiated."

Its analysis suggested it could reap as little as nine cents of profit for every dollar spent on the dam.

As Deputy Prime Minister and Infrastructure Minister, Mr Joyce signed up to spending $675 million of federal money on the dam in a 50-50 funding split with the state government.

He has slammed the independent review's findings.

"They're wrong," Mr Joyce said.

"We've got two choices, to find more water or stop [Tamworth] from growing.

"They come up with this fantastic figure, $1.3 billion, but no one has been able to put on the table exactly how they came up with that number," he said.

'Doesn't sound good at all'

Infrastructure Australia suggested there were more cost-effective options to improve water security for the city of Tamworth.

They include buying back water licences from irrigators, and increasing the amount of water reserved for town use in the 100 gigalitre Chaffey Dam.

But the Mayor of Tamworth, Russell Webb, said those options would destroy the region's economy.

"We actually decimate the irrigator industry in the Peel Valley, that in itself is bad enough," he said.

The new Dungowan Dam project was announced at the height of the last drought in 2019 by then Prime Minister Scott Morrison and Premier Gladys Berejiklian. (ABC News: Caitlin Furlong)

Cr Webb said the indirect impact on businesses in Tamworth would also be significant, and more work needed to be done to reveal the price tag of not building the dam.

At a Tamworth Regional Council meeting last month, a report suggested the body would need to upgrade the existing Dungowan Dam and pipeline anyway, which would cost up to $200 million.

Councillor Webb said the region's growth would also take a hit, and affect businesses and throw the sustainability of its agriculture into question.

He said Infrastructure Australia's recommendation to leave it off the priority list was not encouraging.

"Look, it doesn't sound good at all."

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