One of Australia's top scientists has urged federal and state governments to ''reset the Snowy Mountains scheme'' and run it with less water.
The cost of upgrading the scheme's ageing infrastructure, and increased competition following federal reforms to the national electricity market are also raising doubts about the future cost effectiveness and reliability of the Snowy hydro-electric scheme.
The head of the NSW Natural Resources Commission, John Williams, said a 60 per cent cut in water use across the Murray Darling Basin is required, and the Snowy scheme which diverts water for irrigation to the Riverina cannot be exempt from the push for water savings. ''The gold rush that was fed by water is over. The gold is drying up.''
Dr Williams, a former NSW chief scientist and head of CSIRO Land and Water, has called for federal and state governments to urgently renegotiate the volume of water diverted from the Snowy for irrigation.
The NSW Government is currently reviewing the Snowy Hydro Corporation's water licence, with Victorian independent MP Craig Ingram calling for changes to tighten licence conditions. The scheme is jointly owned by the Commonwealth (13 per cent), NSW (58 per cent) and Victorian (29 per cent) governments.
Mr Ingram, a former fisherman, won his East Gippsland seat from the Nationals 10 years ago with a high-profile campaign to save the Snowy. In a submission to the Snowy Hydro water review, he said the company ''has been manipulative, deceptive and has caused the NSW and Victorian governments to lose credibility with the local community''.
Mr Ingram said the river was being operated ''like an irrigation channel [with] no variability or environmental benefit''.
More on our State of the Snowy investigation in today's Canberra Times