Water management reforms in NSW could be undermined by pressure from "certain important stakeholders" and insufficient funds and staff, according to a former official tasked with investigating water mismanagement in the state.
Ken Matthews, tapped by the Berejiklian government after ABC's Four Corners aired allegations of water theft in July, released his final report on Thursday. Community concerns had "if anything, intensified" since his interim review in September, he said.
Mr Matthews said that while the government had acted quickly on some advice from that initial report - such as setting up a new Natural Resources Access Regulator - other steps were in doubt.
"I am concerned ??? about the risks of unwarranted 'watering down' of the reform measures as implementation proceeds," he said, noting ill-defined boundaries between agencies could repeat past compliance failures.
Among the hindrances was the lack of a completed master plan and a lack of staff, he said.
Perhaps more important, though, was the increasing pressure by some key stakeholders seeking changes to plans for better water monitoring and more transparency of water usage.
"[If] too many 'adjustments' accumulate, there is a risk of gradually losing the current unprecedented opportunity to achieve long-overdue remedies to NSW compliance problems," Mr Matthews said.
He recommended the government announce now its intention to conduct an independent audit of results against ministers' targets in 12 months' time.
Niall Blair, the Minister for Regional Water, said the government was "firmly committed to delivering these reforms", adding the government plans a comprehensive response next month.
"We're committed to the Murray Darling Basin Plan and will continue to work with the MDB [Authority] and other Basin states to fully implement this package of reforms," he said.
The Matthews report was released on the same day a major review of the entire Murray-Darling Basin Plan by the Wentworth Group found the $13 billion reform "at great risk".
NSW accounts for more than half of the annual water use of the basin and yet had meters for only two-thirds of that extraction, the Wentworth report found. A form of "institutional corruption" threatened to undermine the plan's success, one author told Fairfax Media.
Mr Matthews noted that Gavin Hanlon, a senior NSW bureaucrat who had taken part in select teleconference with irrigator groups - audio of which was aired by Four Corners - had resigned on September 15 before his investigation had been completed.
Mr Matthews' interim report said the Hanlon-led group had met "on at least four occasions", resulting in "a potential loss of confidence in the professionalism and even-handedness of Department of Primary Industries, and therefore the wider NSW public service".
The final report noted the department secretary had terminated the employment of another senior executive a week later.
"This executive had allegedly been involved in certain events reported in the Four Corners program, including the teleconference," it said.
A department official declined to comment on individual employees.
Separately, Mr Matthews said in his letter accompanying the final report that he was "disappointed that decisions have still not yet been taken about whether to proceed to prosecution in the several alleged cases of non-compliant irrigation activities aired in the Four Corners program".
He added that WaterNSW had briefed him on the "practical reasons" for the delay.