The initiative will support two voluntary pilot programs involving several councils in western and south-western NSW. One pilot includes members of the Western Councils Water Alliance along with Moree Plains and Narrabri councils, while the second pilot involves the councils of Balranald, Carrathool, Hay, Lachlan, and Wentworth.
The pilot projects will be delivered over a two-year period and will test practical collaborative approaches designed to address local water and sewer service challenges. The government stated that the pilots will focus on cooperation between councils rather than structural reforms, with the aim of developing locally tailored and practical solutions for regional communities.
The projects will explore options such as sharing specialist staff to manage common strategic risks and challenges, as well as coordinating critical infrastructure projects at a regional level. Through increased collaboration, the initiative seeks to improve service quality, strengthen drought resilience, and support more efficient use of available funding resources.
The NSW Government also noted that most local water utilities across western NSW are currently participating in a strategic planning review being delivered free of charge by the Department of Climate Change, Energy, Environment and Water. The review is expected to identify future costs, risks, infrastructure priorities, and investment needs, helping ensure that the pilot projects target practical and region-specific challenges.
According to the government, the pilot initiative forms part of a broader reform strategy aimed at improving water availability and reliability across regional New South Wales. The program follows recommendations from the Productivity and Equality Commission’s Review of Funding Models for Local Water Utilities, which highlighted collaboration between councils as a practical approach to strengthening water service delivery in western NSW.
The NSW Government has committed to exploring a new funding model for local water utilities as part of its ongoing reform agenda. Officials stated that a broader reform plan focused on delivering more consistent and long-term funding support for regional water utilities is expected to be introduced in 2027.
The government emphasized that improving regional water and sewer services remains a priority, particularly for communities facing ongoing drought pressures, infrastructure challenges, and increasing demand for reliable essential services across Western NSW.
