The NSW government is going ahead with plans to expand Sydney's desalination plant to ensure the state isn't left "flat-footed" should the drought continue.
The Kurnell plant can currently supply drinking water to 15 per cent of the city, but will double its supply capacity under the planned expansion.
The states continues to be crippled by drought with Sydney’s dam levels dropping to 43.3 per cent on Wednesday.
“We need to be as prepared as we can so we aren’t left flat-footed should this drought continue – which is why we are looking at this as one of Sydney’s insurance policies,” NSW Water Minister Melinda Pavey said in a statement to AAP on Wednesday.
“We have never seen dam levels drop this fast in Sydney, so we need to move as fast to shore up our supply.”
A competitive tender process will determine the potential cost of the expansion before the government decides whether to proceed.
The state’s pricing regulator has also been asked to investigate the pricing impact of the expansion on residents.