Also known as the North-South Pipeline, the $A750 million Sugarloaf Pipeline runs from the Goulburn River near Yea to the Sugarloaf Reservoir in Melbourne's northeast to allow the transfer of 75 billion litres of water to Melbourne as part of the Food Bowl Modernisation Project.

Mr Brumby said “Our major water projects, including this pipeline and the desalination plant are the roadmap back from severe water restrictions.

“The pipeline is an integral part of the biggest investment in irrigation upgrades in 100 years with water savings in northern Victoria’s irrigation region to be shared with Melbourne to secure its water supplies.”

The Sugarloaf Pipeline Alliance is made up of Melbourne Water, Sinclair Knight Merz, GHD and John Holland.

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In addition, the Federal Government has allowed LinkWater’s Northern Pipeline Interconnector to proceed under national environment law, subject to strict environmental conditions.

The Federal Department of Environment, Water, Heritage and the Arts has completed its consideration of LinkWater’s proposal, the Queensland Coordinator-General’s assessment report and public submissions on the pipeline's potential impact on wildlife along the Mary River.

The department said that with mitigation measures in place and strict conditions imposed on the project, construction of the pipeline will not have unacceptable impacts on nationally protected matters, in particular threatened species in communities and migratory species.

A key component of the department’s approval includes limiting the transport of water from the Coles Crossing offtake on the Mary River to only 20 ML/d, with an additional 2 ML to allow for measurement error.

The department has also asked LinkWater to undertake further surveys and more management and monitoring plans to be approved by the Federal Government before construction can begin. Linkwater has also been asked to prepare an overarching environmental management plan showing how it will minimise impacts on nationally protected species along the pipeline route within three months.

LinkWater will also be required to submit annual reports, as well as be subjected to audits if there are any concerns about the amount of water being transported through the pipeline.

The Northern Pipeline Interconnector is part of the South East Queensland water grid and will initially link Baroon Pocket and Ewen Maddock dams to the Brisbane water grid. The project involves the construction of two sections of pipeline – one between Morayfield and Lander’s Shute, near Baroon Pocket Dam, and a second between Image Flat and Lake McDonald near Noosa. These sections will link into existing pipeline networks on the Sunshine Coast.

When completed, the new pipeline will have the capacity to move surplus water between Brisbane, Caboolture and the Sunshine Coast.