The Insurance Council of Australia (ICA) says a proposed increase in the Warragamba Dam’s capacity would only be used for flood control, and opponents of a wall-raising project may be over-estimating upstream impacts.

“ICA understands that this zone is not intended to be used for water storage and appropriately drafted legislation should ensure this does not occur,” it says in a submission to a NSW Parliamentary inquiry.

The area upstream would only be fully inundated during significant events when there is a need to prevent catastrophic flooding of the Hawkesbury Nepean Basin.

“ICA estimates that this could occur at a probability of 0.2% in any given year, or in colloquial terms ‘rarely’,” it says.

“We are concerned that there may be significant misunderstanding or over-estimation in the community with respect to how the mitigation may impact the surrounding landscape.”

Environmental and community group submissions to the inquiry have highlighted concerns over impacts on the surrounding landscape and sites of cultural significance.

The NSW Government is completing an environmental impact statement on the proposal.

ICA says a serious weather event would “lead to significant community impacts and threaten life safety in many locations” and reducing the Western Sydney flood risk is of paramount importance. Other mitigation proposals, it says, would be less effective.

“Decisions that could lead to rare flooding of environmental resources are fundamentally regrettable to all, but must be balanced against the greater community need,” it says.

“Where sound analysis shows that there are no reasonable alternatives, those difficult decisions must be made in a timely fashion in order for work to commence in time for lives to be saved and property protected before the next serious flood event.”

The Legislative Council Select Committee on the Proposal to Raise the Warragamba Dam Wall will hold hearings on November 22 and 25.