File photoThe NSW Government has decided to pause plans to replace Cobar’s oldest water supply pipeline due to substantial cost escalations.
After a thorough and rigorous Final Business Case (FBC), the NSW Government has decided to halt the project due to substantial cost escalations.
The NSW Government has an obligation to taxpayers in a tough economic climate to be extra vigilant about investments.
Preliminary estimates to replace the pipeline have increased to over $300 million due to rising construction costs.
Following this finding, the NSW Government extensively explored other funding options. However, with no viable budget, the investment decision has been deferred.
Cobar is one of the few towns in NSW without its own water source, and relies on two pipelines to transfer water 130km from the Nyngan weir pool to local households, businesses and the mining industry.
Cobar has long suffered from a lack of a reliable water supply since its establishment in the 1870s.
The first water pipeline from Nyngan, a 300mm diameter pipe, was constructed in 1963 and a second pipeline, 375mm diameter, was laid parallel to the existing line in 1983.
(There’s also a third 30km section of new 375mm piping between Nyngan and Hermidale which was installed in 2017 at a cost of $9 million.)
Water is pumped from Nyngan to Cobar via the two main pipelines.
The business case found the newer pipeline to be in good condition with no evidence of leaks and it is expected to continue servicing the town for more than a decade.
However Cobar Water Board has expressed concerns with both pipelines, with the new pipeline showing signs of rusting from the outside in some areas.
The older pipeline was thoroughly assessed in the Final Business Case as it would be needed to meet the increased demand for water from more mining activity in the region.
Cobar Mayor Jarrod Marsden said it was disappointing a new pipeline wasn’t going to be funded.
“We understand that the price has increased substantially and that the Government’s finances are tight,” Cr Marsden said.
“What I’m concerned about is that if it’s over $300 million now, what’s that going to be in 12 months or two years? Is it then going to be a $400 million commitment?”
“I’d like to see the project broken down in stages and see if we can get some of the high risk sections replaced.
“We’ve mapped all the leaks, we know where the high risk areas are.”
Cr Marsden said unfortunately when making their decision, the Government has failed to take into account the Endeavor Mine coming back online.
“We’re currently only pumping at 70 per cent of our capacity now,” Cr Marsden said.
“That will go to 95 per cent when Endeavor comes on line.
“Currently if we have a leak, we’ve got room/time to make a repair.
“When we are at full capacity, and there’s a leak, then it’s a threat to the town and mines’ water supply.
“This summer is the first summer I can remember that Cobar hasn’t had some sort of water restrictions.”
Cr Marsden said that’s helped to take some of the pressure off the pipeline system but that’s not something we can rely on in the future.
State Member for Barwon Roy Butler is also disappointed with the decision to delay the project.
“I have written to the minister seeking out details on the project, prior to a meeting request between the Mayor and general manager of Cobar Shire Council and the Water Minister,” Mr Butler said.
“I’ll be meeting with the Mayor and GM on Thursday to discuss a plan for a way forward.”
The Government said both pipelines will remain operational and will continue to be maintained by the Cobar Water Board.
In the NSW Government’s estimation, Cobar will continue to have a safe and secure water supply for more than a decade.
While the replacement of the older pipeline is on hold, the NSW Government however remains committed to Cobar’s long-term water security and will continue working on sustainable solutions for the region.
From their $2.8 million business case which investigated the merits of upgrading the existing pipeline and pumping infrastructure between Nyngan to Cobar, the NSW Government has prioritised the replacement of the pump stations.
This $49 million project will see the construction of two new pump stations, one at Nyngan and the other Hermidale.
These new pump stations will replace the current ageing infrastructure and will safeguard Cobar’s pumping infrastructure for at least half a century.
The pump stations are being co-funded by the Australian Government’s National Water Grid Fund ($26.25 million) and the NSW Government ($22.75 million).
The project was first announced in May 2022 with a costing of $46 million and work was expected to have commenced mid-2023.
The project was later reviewed and is now expected to cost $49 million.
Construction is scheduled to commence mid-2025 and be completed late next year.
