A TAMWORTH councillor has told the state government to keep its hands off Dungowan dam, amid fears an upgrade would see council lose control of the valuable asset.
The NSW government has revealed a multi-million dollar plan to get the $484-million project shovel ready.
However, councillor Mark Rodda is concerned that the state government may only invest in the massive upgrade on the proviso that it gets control of the dam.
"It's possible that they say, because we are the major funding partner, it belongs to us now," Cr Rodda said.
"I'd love to knock it on the head now and confirm that an enlarged Dungowan Dam will belong to the people of Tamworth Regional Council, not the NSW government."
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As a council-owned dam, all the water in Dungowan is reserved for Tamworth and surrounding villages. Cr Rodda said if council lost control of the dam, the city would once again be fighting for its fair share of water.
"We can't have a situation like we have now, sharing the resource with other water users like we do in Chaffey, not knowing if we have enough water to sustain our current or future populations," he said.
"No one has been impressed with the state government's management of water storages. Chaffey was full three years ago, yet now it's at a critical level.
"I think if they got control of an upgraded Dungowan dam, they would see the water in it as another source of revenue to be sold off."
Tamworth mayor Col Murray said the matter hadn't been decided yet, and would be part of future discussions.
"Keeping it would certainly be our first choice," he said.
"Dungowan has always been a Tamworth city water supply dam and hopefully that's the way it unfolds in the future. Council would certainly be able to maintain and look after an upgraded Dungowan."
Over the last three years, council has spent an average $315,000 per annum on the operation and maintenance of the dam.
NSW Water Minister Melinda Pavey did not respond to a request for comment.