Lostock Dam to Glennies Creek Dam Pipeline Project

The NSW Government has deferred building a new two-way pipeline between Lostock Dam to Glennies Creek Dam, along with Hunter Water’s Paterson River Connection Project which involved building a water pump station and new water treatment plant near Paterson.

The Final Business Case for the project shows the total project would cost in the vicinity of $1.5 billion which simply does not stack up in the current economic environment.

The Final Business Case has been completed by the Department of Climate Change, Environment, Energy and Water and Hunter Water.

The department’s Water Group and Hunter Water have conducted a range of activities and assessments over the last 18 months to inform the final business case.

These include:

• engaging with First Nations people, landholders, community, industry bodies and other government agencies to discuss the projects and seek feedback on potential impacts, benefits and opportunities
• conducting environmental, social, land use and heritage investigations to inform potential infrastructure options in the Hunter region
• undertaking hydrological and estuary modelling to understand the impacts, benefits and possible effects of the proposed infrastructure options on the current water systems and catchments
• developing preliminary engineering concept designs.

Improving long-term water security and reliability in the Hunter region remains a priority for the NSW Government.

The Final Business Case shows the total project would cost in the vicinity of $1.5 billion which does not stack up in the current economic environment.

Decisions on major infrastructure projects need to be fiscally responsible and provide the best value for money for taxpayers.

The work has shown that the project can increase the region’s water supply by making better use of existing dams and without unacceptable environmental and social impacts. It would boost drought resilience for both the Lower and Upper Hunter Regions.

It may become a cost-effective option in the future as demand for water grows.

While the project has been deferred, it remains a potential future option. The findings from the Final Business Case, including technical assessments and hydrology models, will be preserved for future planning.

The NSW Government remains committed to responsible and targeted investment in water security initiatives that provide the best value for customers and taxpayers.

The NSW Government decision to defer the Lostock to Glennies Creek Pipeline project was made jointly by key NSW water sector agencies, including the department’s Water Group, WaterNSW, and Hunter Water. This decision ensures that future investment choices are better informed by greater economic stability and clarity around regional priorities.

Community and stakeholder engagement

The Water Group and Hunter Water are committed to building and maintaining respectful, trusted and collaborative relationships with relevant communities and stakeholders to ensure this proposed water infrastructure project achieves the best possible outcomes. To date, the Water Group and Hunter Water have engaged extensively with the community, First Nations people, landholders, water users and industry on the project via:

• face-to-face and online community information sessions
• direct engagement/communication with landholders across the project area to discuss the proposed project, including land and water access negotiations to complete environmental assessments and technical studies for the project meetings with Local Aboriginal Land Councils in the region and the participation of First Nations groups and Registered Aboriginal Parties in field investigations and cultural and heritage assessments to provide cultural monitoring
• meetings with Local Aboriginal Land Councils in the region and the participation of First Nations groups and Registered Aboriginal Parties in field investigations and cultural and heritage assessments to provide cultural monitoring
• targeted engagements with relevant local councils, recreational clubs, specific water user groups, including the Hunter Valley Water Users Association and Tidal Pool Users group, and local industry through regional business forums
• the establishment of community and industry reference groups.

The feedback received helped inform the development of the final business case.

The Water Group would like to thank the community for their active participation during consultations held throughout the various stages of project development.

Reference groups

In 2023, the Water Group established three reference groups including:

• a council stakeholder reference group
• an industry reference group
• a community reference group.

The purpose of these groups was to provide insights from a local council, community and industry perspective to help inform key aspects of the project.

The references groups operated until mid-2024.

The projects remain under consideration

The Hunter Valley has several water initiatives, including water efficiency programs, water security plans, and flood mitigation schemes.

Increasing the diversity of the region’s water supply system will boost drought resilience, provide a more flexible water source and enable Hunter Water to meet the demands of a growing population.

Improving long term water security and reliability in the Hunter region remains a priority for the NSW Government.

It is vital to ensure resource allocation decisions are well timed, offer value for money, consider and mitigate risks and are consistent with Government priorities and objectives for the people of New South Wales.

The investigations conducted as part of the Final Business Case for the Lostock Dam to Glennies Creek Dam Pipeline Project assessed multiple water management options to improve drought resilience and water security in the Greater Hunter region.

The preferred option identified was a combined approach involving the pipeline and the Paterson River Connection project. This option aimed to:

• establish a 50GL reserve account in Glennies Creek Dam to support water security
• provide 40GL of drought access for Hunter Water customers
• secure 20GL of additional high-security entitlements to support mining operations and regional economic opportunities.

If the project is reconsidered in the future, the preferred options identified in the Final Business Case will serve as a valuable reference. However, any future implementation would need to be reassessed considering updated economic conditions, water security needs, and regional priorities.

While the combined Lostock Dam to Glennies Creek Dam Pipeline and Paterson River Connection projects approach was identified as the preferred option in the draft of the Final Business Case, future decisions will depend on:

• affordability for Hunter Water and WaterNSW customers
• economic conditions
• water demand in the Hunter region at the time of reconsideration.

All technical assessments, hydrology models, and design work from the Final Business Case will be preserved to inform any future water security planning and decision-making.

If the projects proceeded in the future, an environmental impact assessment will be undertaken and the relevant planning approvals sought.

The Final Business Case has been a joint funded project between the Australian and New South Wales Governments and Hunter Water. National Water Grid funding contributed $11.1 million, the NSW Government contributed $2.5 million and Hunter Water contributed $3 million.

The cost impact on water customers and licence holders would depend on the funding arrangements in place if the projects were to proceed in the future.

Assessments on customer billing impacts would be conducted closer to any decision to proceed, ensuring accuracy and fairness in cost distribution. These assessments would take into account:

• potential government funding support to offset costs
• affordability considerations for Hunter Water and WaterNSW customers
• updated economic conditions and regional water demand.

The NSW Government remains committed to carefully assessing financial impacts before making any decisions that could affect customers.

The Lostock Dam to Glennies Creek Pipeline project, overseen by the department’s Water Group, and the Paterson River Connection project, overseen by Hunter Water, were assessed together in the Final Business Case due to their complementary benefits for regional water security. However, they are governed by separate agencies, have different funding sources, and could technically be delivered independently.

The Lostock Dam to Glennies Creek Pipeline project could proceed without the Paterson River Connection project. However, on its own, it would provide limited benefits compared to the combined approach.

The Paterson River Connection project cannot proceed without the Lostock Dam to Glennies Creek Pipeline project, as it relies on the increased water availability that the pipeline would provide. If the Lostock Dam to Glennies Creek Pipeline project does not proceed, Hunter Water will explore other water augmentation projects to address future supply needs in the region.

Yes. The decision includes Lostock Dam to Glennies Creek Dam Pipeline project and Paterson River Connection project.

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Key stakeholders including local councils, First Nations groups, directly affected landholders, previous Reference Group members and other key stakeholders will be notified directly.