Melinda Pavey has vowed to change that attitude and said her new water department chief executive was the first step towards that.

"We are finding some internal challenges every day," Ms Pavey told the NSW Farmers annual conference.

"Briefing notes from my department did not mention the 'dam' word.

"There are those in the bureaucracy who do not want dams built."

The NSW government has been accused of dragging its heels on the proposed Dungowan Dam upgrade over the past two years and at one stage it was considered dead in the water.

However, under Ms Pavey there have been promises of action.

In June, during a visit to Tamworth, she backed the $484-million Dungowan Dam upgrade as a "good option" and said the government would "focus on getting that to business case as soon as possible".

"I can understand that the community here is probably frustrated by the amount of talk around Dungowan Dam and its expansion," Ms Pavey said.

"But I also know we have $1.4 billion on the table from the Snowy Hydro legacy fund. The federal government has another $1.3 billion."

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The Dungowan proposal, which is Tamworth Regional Council's favoured long-term option, would see the dam upgraded from 6.3GL to 22GL. The federal government has already committed $75 million to the project.

While it carries a massive price tag, Tamworth mayor Col Murray said that may drop once geotechnical studies have been completed. At the moment, the worst-case scenario has been budgeted for.

"A lot of the blow-out in cost is because of the uncertainty of the underground," Cr Murray said.

At the NSW Farmers conference, Ms Pavey said a range of water infrastructure projects would go ahead as fast as possible on her watch.

"When you have inflows in those valleys at 1.5 per cent of the long term average, you know you have some issues," she said.

"The pain, the anguish, the mental issues that communities are facing during this drought are with us."

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