Riverina Water has finished the earthmoving stage at Willans Hill to clear the way for new four-storey-high tanks.
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Explosive blasting and heavy equipment has shifted about 60,000 tonnes of dirt and rock from the Wagga hillside.
Riverina Water engineering director Bede Spannagle said the $6 million project aimed to provide residents with a safer and more efficient water storage than the current open reservoir.
"It's taken about nine months to get to this point; it was supposed to take six months but we hit some hard rock and had to do blasting," he said.
The 40-megalitre reservoir will be retired in favour of two above-ground tanks with a capacity of 11 megalitres each.
Mr Spannagle said the tank would avoid the open reservoir's leaking and evaporation issues as well as allowing the water to be rapidly turned over, resulting in a fresher product.
"The tanks are a cast in situ concrete design (poured into a mould on-site)," he said.
"One of the problems with the old reservoir is that it's open to potential contaminants and they leak like a sieve.
"These new tanks will be fully enclosed with an aluminium roof."
Shifting to storage tanks will also reduce Riverina Water's use of chlorine top-ups to treat reservoir water.
"What the community will get is a much more secure system to prevent anything getting to the water and less evaporation, which can lead to a big expense keeping the chlorine levels up."
Riverina Water expects to finalise the plans for the tanks with its new contractor and see the start of construction within four to six weeks.
"We're managing the whole project and our own staff will lay the pipeline," he said.
"The contractor will build the tanks."
The new tanks are expected to open by March 2020.
Riverina Water is currently covering the overburden banks beside the future tank site with topsoil to and in landscaping and re-vegetation.
The plan is that the site will eventually resemble one continuous wooded hillside when viewed from residential areas below.
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