There has been no movement on the project since the state government's feasibility study put the 22-megalitre upgrade at $440 million, almost three times the budgeted $150 million, citing “geotechnical challenges” that made it “cost prohibitive”.

New England MP Barnaby Joyce said it was frustrating to see the $75 million committed by the federal government "just sitting there".

He's asked for the numbers to be re-crunched, pointing out bigger dams had been upgraded for far less.

Mr Joyce said federal government had committed $170 million to the 80,000-megalitre Rockwood weir in Queensland and $54 million to the Hells Gate dam, which will hold about 450,000 megalitres.

"Are they telling me that a 20,000 megalitre upgrade at Dungowan, where there is already a dam, is going to cost $440 million?" Mr Joyce asked.

READ MORE

"We're going to do a revision of their so called costing. The reason I found $75 million is because that's what the state said [half] was going to cost."

Mr Joyce said there were also other options besides Dungowan dam.

"When they were building Chaffey dam the first time, there were a number of sites, such as Swamp Oak Creek, which was going to be 450,000 megalitres," Mr Joyce said.

"I've talked to people who were lobbying for Swamp Oak at the time and they said 'we had the plans, we were ready to go'.

"Then you've got the Chaffey dam extension - it was initially designed for 120,000 megalitres, so you could take it up again."

Tamworth will move to level three water restrictions in the coming week, when Chaffey hits 30 per cent. As on Monday, the dam sat at 30.8 per cent.

"Water infrastructure is incredibly important, it pays for itself over the period of its life multiple times over," Mr Joyce said.

"It puts a complete line in economic and population growth if you don't have it."

Have your say, send a letter to the editor