Water Minister Melinda Pavey last week put back the estimated deadline for completion of the project's business case to the end of year. It had been previously expected in June.

The member for New England expects a federal election later this year, which could mean a Labor government.

Incoming governments are entitled to cancel funded projects that are "uncontracted" - infrastructure schemes which have not begun. But they're bound by contracts signed by previous governments.

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That means the only protection against the political threat to the project is starting it, he said.

"I fought for and got a quarter of a billion dollar grant for Dungowan Dam. If you go forward and say look, I've got a bit of a concern about whether we should be taking your quarter-of-a-billion dollars, the government will say beauty, don't have it, we'll take it back.

"I want to see this thing well under construction by the time the federal election comes.

"Because I'm always fearful that if we lost the election - of course I don't want to - the incoming government has the capacity to wipe the books of any uncontracted capital expenditure. They could wipe the books of Dungowan Dam, and that would be it, I'd be gone.

"I'm not going to spend another eight or nine years of my life, because I won't have it in politics, to get the money back."

It wouldn't even be the first time a new government shot down an infrastructure project in the electorate.

The upgrade of the notoriously dangerous section of the New England Highway at Bolivia Hill was cancelled after a past federal election by a Liberal government, Mr Joyce said.

Funding was later allocated to a new, larger-scale project to make safe the same section of road near Tenterfield.

The federal MP said he hopes a business case hold-up won't mean project delays.

Asked if the state government was dragging its feet on the project, he said he didn't want to pick a fight with the state minister.

"Having been around government for a fair while, in fact longer than any other person in the National Party federally, I know how these games work. People come up with excuses to stop because they don't want to spend the money.

"If you really think through this you've got to be very careful that you're not giving fuel to the fire to stop the construction of the dam."

Melinda Pavey was contacted for comment on this story, but did not respond.

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