The Insurance Council of Australia (ICA) says other flood mitigation options will offer better long-term protection in the Hawkesbury-Nepean Valley than raising the Warragamba Dam wall by 14 metres, after the NSW Government elevated the proposed extension to “critical” status.

ICA has previously backed the proposal but changed its stance last year due to concerns that evaluations had not properly taken into consideration cultural heritage values of the dam’s site and surrounding areas.

“The significant investment required to raise the Warragamba Dam wall, potentially after a considerable period of further studies and complicated environmental approvals, could be spent immediately on a range of other mitigation measures in the most vulnerable areas of Western Sydney,” an ICA spokesman said.

The spokesman says further development on the Hawkesbury-Nepean floodplain must be avoided.

“The Government’s own report states that the greatest risk is further planned development,” the spokesman said.

“We need to learn the lessons – particularly of the past nine months – and not repeat the mistakes of the past.”

Last week the NSW Government declared the proposed 14-metre extension of the Warragamba Dam wall as Critical State Significant Infrastructure (CSSI), meaning it is essential to the state for economic and social reasons.

The NSW Government has already identified the project as state significant infrastructure under NSW legislation.

The Perrottet Government says the proposed wall extension would “future-proof” western Sydney from flood risks despite significant concerns of environmental and cultural impacts.

A statement from the NSW Department of Planning and Environment says the CSSI declaration does not impact the rigorous assessment and stakeholder scrutiny the proposal would need to go through.

WaterNSW, on behalf of the state government, is seeking planning approval for the proposal. The proposal is one of nine outcomes identified in the government’s Hawkesbury-Nepean Valley Flood Risk Management Strategy.

The Warragamba Dam supplies around 80% of Greater Sydney’s water.