On 21 June 2019 the New South Wales Government announced $5.3 million will be used to complete water security projects that will extend essential town water supply to Tamworth, Moonbi and Kootingal. The works related to these projects will be carried out by WaterNSW.

When water is released from Chaffey Dam for the Tamworth, Moonbi and Kootingal town water supply only a percentage of the water released down the Peel River reaches the Calala Water Treatment plant. This is due to a variety of transmission losses including evaporation. The best way to minimise these losses is to pump the water through pipes from point A to point B.

WaterNSW have allocated $3.4 million to construct a temporary block bank which will create a weir on the Peel River near Dungowan. Water will be released from Chaffey Dam and will flow down the river until it reaches the weir. The water will then be pumped from the weir into the Dungowan pipeline. This project will reduce the transmission losses and extend the Tamworth, Moonbi and Kootingal town water supply.

The remaining funds will be used to plan for a long-term water security solution involving a proposed pipeline from Chaffey Dam to the Dungowan to Tamworth pipeline.