THE NSW Water Minister Melinda Pavey hasn't ruled out passing the cost of the Dungowan Dam upgrade on to Tamworth residents.
Earlier this week, during a parliamentary estimates hearing, Ms Pavey was questioned by Shooters, Farmers and Fishers MP Robert Borsak about the cost recovery process of the project.
When asked by Mr Borsak if residents could "be hit with any charges to recover some of this cost or assist in the funding of this project", Ms Pavey said all avenues of cost recovery would be explored.
"In respect of the construction, we have commitments from both the state and federal governments," Ms Pavey said.
"For instance, Tamworth Regional Council is looking at hydro capacity. That might come with a cost.
"I am not going to rule anything in or out. It would be irresponsible for me to do that.
"There will be public and fair processes going forward to ensure that the community is engaged.
"The big cost of this is being stumped up by the state and the federal governments."
Tamworth MP Kevin Anderson said the new Dungowan pipeline was near completion and the project was a necessity for the region.
"This is project is of state significance and to me is still critically important," Mr Anderson told the Leader.
"Limited rainfall around the catchments means we're pushing ahead with that pipeline from Chaffey Dam through to Tamworth.
"It's near completion, which is great and we are looking at doing early works on Dungowan Dam later in the year."
Mr Anderson said he was eager to push on with the project and the subject of cost recovery would be addressed in the future.
"Just because we have had some rain and things are looking a bit greener, doesn't mean we can take our foot off the pedal," he said.
"It's about getting the dam built; my focus is about getting the dam built and getting water security.
"We will have those discussions down the track."
The state government plans to begin pre-construction work in October, which involves replacing the existing Dungowan to Tamworth pipeline.
That will then be followed by the construction of the dam, which is slated to start in October 2021.