A NEW $480 million dam at Dungowan is set to secure Tamworth's water supply for the future with the mayor claiming the city is open for business.
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It's taken one of the worst droughts on record for them to do it, but the state and federal governments will fund the new Dungowan Dam - the first dam to be built in NSW since Split Rock Dam near Manilla in 1987.
Mayor Col Murray said the city has been hamstrung without a second secure water supply - something that changed on Sunday.
"I would suggest that we would maybe be one of the most water-restricted cities in regional Australia over the last 10 or 15 years," he said.
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"This announcement [on Sunday], I believe, will halt the businesses that have looked at investing in Tamworth and have gone away to invest elsewhere because the water security just hasn't been here."
He said big business - some of the biggest employers in the food processing cluster in Tamworth and surrounds - could have confidence to stay in town.
"We've had discussions with those business leaders and worked very closely with our state agencies and Water Minister and Deputy Premier on shoring up their confidence and ensuring that they stay investing in our community," Cr Murray said.
"I'm very, very happy today to say that [on Sunday] and report back to those Thomas Foods, to Baiada, to Teys Cargill, to say our water security is now in the bag."
Tamworth council owns the current Dungowan Dam, and after years of lobbying for an upgrade, purchased all the land downstream it needed for a new site. That, couple with the pre-planning, "political will" of the state government, and the federal government coming to the funding party, will see a new dam constructed and finished by 2024.
The new 22.5 gigalitre storage will be built downstream from the current Dungowan Dam.
New England MP Barnaby Joyce - one of the key drivers of the project with Tamworth MP Kevin Anderson - said "the construction of dams is a statement confidence into the future of cities and the towns that are growing".
"If we want to decentralise Australia we must invest in this sort of infrastructure so that the Baiadas come to town; so that the concrete batching plants keep working; so the tourism industry with the country music festival can be supported," he said.
"This is a clear statement, we mean business. We are dealing with the drought, we hear you, we hear what you're saying and we are delivering."
Deputy Premier John Barilaro has been pushing the state's dam construction push to shore up water supplies in the crippling drought and said pipeline, bores and upgrades to weirs were first. Now dams are the agenda to support communities.
"We believe this is the infrastructure that one grows the economy, creates jobs and stimulates local businesses but at the same time gives us long term water infrastructure," he said.