In October 2019, the Prime Minister and NSW Premier announced the planning and delivery of three new or augmented dams in NSW.
The NSW Government selected Dungowan, Wyangala and Mole River as key projects to be prioritised under new legislation to deliver vital water infrastructure for regional NSW. NSW is experiencing the worst drought on record and the Government is focusing its efforts on infrastructure to ensure greater resilience now and into the future.
This announcement represents the largest investment in regional water infrastructure in a generation. As part of this announcement, the NSW and Commonwealth Governments committed $24m for a business case for building a new dam on Mole River, in the Border Rivers region of NSW.
The proposed site is within the Border Rivers which is a large catchment that services both NSW and Queensland users. Its water supply is serviced by three relatively small catchment dams and large on-farm storages.
The project proposal includes construction of a rockfill dam and associated spillway and other infrastructure.
A new dam will have the potential to secure more water in flood sequences so that in drier times more water would be available to communities, agriculture, and the environment.
Water Infrastructure NSW is in the early stages of planning the Mole River Dam and is developing the business case with outcomes expected in 2022.
Why do we need the project?
The northern and far western valleys in NSW experienced the worst drought on record between 2018-19. This includes the Border Rivers, where the proposed Mole River Dam is located. The Border Rivers is a large catchment and its water supply is serviced by three relatively small catchment dams and large on-farm storages, servicing both NSW and Queensland users.
Low water security levels create a barrier to long-term financial security for farmers, their employees, supporting business and the local communities. This put pressure on the local population, drives increased unemployment and makes it harder for farmers and other industries to attract high skilled workers to the region.
This economy is heavily dependent on agriculture, specifically from dryland and irrigated cereals, dryland livestock, and irrigated cotton. Poor security of water supply is a barrier to agricultural investment which means that with improved certainty of supply during drier years, there would be potential to convert farming enterprises to higher value crops.
The NSW Government is undertaking detailed investigations into a proposed new rockfill dam on the Mole River, approximately 20 km south-west of Tenterfield in northern NSW. A new dam in the Border Rivers region will help secure water in flood sequences so that in drier times more water would be available to communities, agriculture, and the environment. It would increase water reliability for farmers, improve town water supply security and provide better flood mitigation.
We need to invest in long-term water security to build the resilience of our regional communities, improve water availability and increase reliability for businesses. The proposed Mole River dam would provide increased water security for the valley.
What are the key benefits of the project?
Key benefits of the project are expected to include:
- improvements in on-farm productivity because of more reliable and secure water supply
- increased reliability for agricultural production which will help secure existing jobs and create new opportunities
- an improvement to security of town water supply for downstream communities.
What is the current status of the project?
The latest project information is available at dpie.nsw.gov.au/water/water-infrastructure-nsw/dam-projects/mole-river-dam/ where community members can register to receive project updates. We will keep the community informed about the project through regular community newsletters, webinars and where possible face to face information events.
What investigations are being carried out for this project?
Water Infrastructure NSW has been carrying out environmental and technical investigations as part of developing the business case and the detailed dam design and operational plans.
How is climate change taken into consideration?
Water Infrastructure NSW will use detailed Historic and Stochastic – Paleoclimate Modelling which takes into account climate change and past records.
Is the geology of the area suitable for a dam?
Preliminary geological investigations are being conducted as part of the business case. If the business case is approved, the Environmental Impact Statement (EIS) would follow. The EIS investigations would thoroughly assess the suitability of geological conditions in the Mole River area.
What type of dam is proposed?
The project proposal includes construction of a rockfill dam and associated spillway and other infrastructure with a high percentage of material sourced within the construction zone.
What is the proposed dam size?
Current investigations on dam size are still ongoing through modelling and regional requirements. In the Strategic Business Case a broad range of infrastructure and non-infrastructure options are being considered, including a 100 GL and a 150 GL dam.
When will the business case for this project be completed?
Water Infrastructure NSW is developing the Mole River Dam business case which is expected to go to government for decision by the end of 2021.
What is the budget for this project?
The NSW and Federal Governments allocated $24m funding for development of a business case for a new dam on the Upper Mole River. Water Infrastructure NSW is working within the budget for this business case.
What is the predicted total cost for the project?
Water Infrastructure NSW is developing the Mole River Dam business case and this process will inform the economic viability and cost to develop the new dam.
Projects of this scale are complex and significant work is required to establish a final cost estimate. An independent review will be conducted on the cost for inclusion in the Cost Benefit Analysis.
Other costs will include development of the Environmental Impact Statement and associated investigations, dam design, as well as construction and commissioning. The business case will also consider the cost of operating and maintaining the new dam.
How does the business case differ to the feasibility report prepared by Jacobs?
In 2017, WaterNSW commissioned Jacobs to carry out a desktop feasibility study for a new Mole River dam. The study identified a number of water security options and the Upper Mole River Dam was carried forward as the preferred option.
Then in 2018, WaterNSW developed a 20-year Infrastructure Options Study. A new dam on the Mole River was one of many options considered to improve water availability in the Border Rivers catchment.
Water Infrastructure NSW is developing the Mole River Dam business case and this process will inform the economic and technical viability and cost to develop the new dam. The business case will include a cost benefit analysis to inform forward investment decisions.
Water Infrastructure NSW will assess the key assumptions and other potential benefits in our investigations to inform the viability of the dam and present its findings in the business case.
How does Water Infrastructure NSW engage with the community, stakeholders and affected landholders?
Despite the COVID-19 pandemic, community engagement on this project has not stopped or slowed down.
Water Infrastructure NSW has implemented a revised engagement plan to keep the community updated and meetings with key stakeholders occur by Zoom meetings regularly. Water Infrastructure NSW also has dedicated personnel managing engagements with landowners and key stakeholders. Consultation is ongoing and will be maintained for the duration of the project.
To date 85 different indigenous individuals/groups for the Mole River Dam have been engaged, 45 are official Registered Aboriginal Parties (RAPs) and another 40 that are not official RAPs but have expressed strong interest to be engaged. The guiding principles that underpin the indigenous engagement on the project are inclusion and removing barriers to participate.
Water Infrastructure NSW is also working closely with Local Councils, State and Federal Members during the development of the business case.
Industry engagement was also carried out with agricultural, irrigation and meat processing industry participants, and potential new investors. This feedback from industry and other water users has helped inform Mole River Dam cost benefit analysis and will also be used in the Border River Regional Water Strategy.
Which properties will be impacted by the project?
We are carrying out detailed flood modelling to identify potentially impacted properties and quantify any potential environmental impacts from the project, and to develop suitable mitigation measures if required. The project will contribute to a step improvement in flood management capacity in the Border Rivers region.
If part of my property is required for the dam, will Water Infrastructure NSW acquire that portion or the whole of my property?
Water Infrastructure NSW is developing the Mole River Dam business case.
If the business case is approved Water Infrastructure NSW would then work closely with any impacted landholders and negotiations would involve independent market appraisals including support to property owners to undertake their own appraisals including support to property owners to undertake their own appraisals to inform that negotiation process. The extent of land acquisition on each property will be determined on a case-by-case basis and Water Infrastructure NSW will work to the requirements of the Land Acquisition (Just Terms Compensation) Act 1991. This process is used by the NSW Government for land acquisition. For more information about this process, visit the NSW Government Centre for Property Acquisition.
How will property valuations be determined?
If the Mole River Dam business case is approved, Water Infrastructure NSW would work closely with any impacted landholders where we need to acquire property for the project.
Case-by-case negotiations with landholders would involve independent market appraisals including support to property owners to undertake their own appraisals to inform the negotiation process.
Will the project offer employment opportunities?
Water Infrastructure NSW is developing the Mole River Dam business case. Employment opportunities would be known if the business case and funding to construct the project are approved.
A key guiding principle for our projects is to maximise local employment benefits during construction and operations.
Will materials and equipment for the project be sourced from local businesses?
Water Infrastructure NSW is developing the Mole River Dam business case. We expect opportunities to flow for local business if the business case and funding to construct the project are approved.
If the Mole River Dam business case is approved, Water Infrastructure NSW will set up a portal for local businesses to register their interest. These details will then be supplied to all project contractors. Part of the evaluation of tenderers will be based on their track record in using local suppliers and maximising local benefits.
How has Aboriginal cultural heritage been considered?
To date 85 different indigenous individuals/groups for the Mole River Dam have been engaged, 45 are official Registered Aboriginal Parties (RAPs) and another 40 that are not official RAPs but have expressed strong interest to be engaged.
The guiding principles that underpin the indigenous engagement on the project are inclusion and removing barriers to participate.
The indigenous engagement is focused on the cultural heritage stage of the environmental investigations required for the business case. Broader indigenous engagement would occur if the project is approved to progress.
What is involved in the Aboriginal cultural heritage assessment?
Water Infrastructure NSW is undertaking an Aboriginal cultural heritage assessment of the proposed Mole River Dam.
This report is being undertaken in accordance with Heritage NSW guidelines, and has included close involvement with Aboriginal individuals and/or organisations.
As part of the project, this has included an unprecedented level of consultation with the Aboriginal community, including regular face-to-face and/or online meetings held across the region, and participation in an extended survey and excavation program of the proposed dam footprint.
The project also included on-site discussions between a highly experienced anthropologist (cultural mapping) and nine knowledge-holders and/or elders to identify their concerns, values and sites of importance, which will be incorporated into the report.
To date, the full extent of the cultural heritage for the site is still being investigated, and the management of this resource undetermined. Once these activities are complete, the report will be provided to the registered Aboriginal participants for their review, comment and input before finalisation.
Water licencing and pricing
How will the new dam affect water pricing?
Water Infrastructure NSW is in the early stages of planning the Mole River Dam and is developing a business case. A funding strategy is being determined through the development of the business case.
To the extent that the funding strategy determines the potential costs needed to be recovered by water users, the Independent Pricing and Regulatory Tribunal (IPART) will be asked to ensure that the share of the cost borne by water users is fair and affordable. IPART’s role is to independently set prices for water to reflect the efficient cost of providing services and ensure fair prices for customers. IPART carries out consultation with stakeholders on increases in costs for water users.
The process for making a price determination for water users will involve an extensive consultation and review process by IPART allowing ample opportunity for local issues and concerns to be raised and addressed.
Can water licences be traded?
Water licences can be traded, with the price set by the market. The market price of licences is publicly available, and buyers and sellers can also engage water brokers to advise them.
Can water licences be traded to another valley or water system?
Water licences can typically be traded within the Border Rivers area, but not between the Border Rivers and another area unless water sharing rules or legislation allow. There are some locations in Australia where intervalley trade exists, but this is usually where there is a connection between the water sources.
How will water be allocated?
The NSW Department of Planning, Industry and Environment in consultation with the community develop water sharing plans to determine how much water can be extracted over the long-term and how much needs to be set aside for the environment.
The volume of water licensed users can have, known as an allocation or available water determination (AWD), varies from year to year based on the licence category and size of their individual entitlement. This allocation is dependent on a range of factors including dam storage levels, river flows and catchment conditions.
For the Border Rivers, the Border Rivers Commission and the states have the responsibility for sharing water between the states. The states then allocate the water in accordance with their respective legislation.
When will the price for water license holders be determined?
The price of water will be determined as the project is progressed and final costs/ funding arrangements are settled between the states and federal governments at completion. Maintenance costs that will be passed on to customers will be determined after the final design of the dam.