The Shoalhaven Water Scheme (Scheme) on the Shoalhaven and Kangaroo Rivers was announced in 1968 by the Metropolitan Water Sewerage and Drainage Board. The aim was to help drought proof Sydney Metropolitan Area. The estimated cost of the Scheme was $117 Million.

The Scheme included building a Dam across the Kangaroo River and pumping stations at Bendeela to lift water to the Fitzroy Falls Reservoir and thence water could be transferred to the Nepean Dam and supplement the Sydney and Wollongong water supplies. The Tallowa Dam was built across the Shoalhaven River and thus water from two rivers was collected to enhance Sydney water supply.

The Electricity Commission of New South Wales got wind of this project and suggested an enhancement of adding a pumped-hydro power generating system. This idea was adopted and the Scheme now included the first pumped-hydro system after the Snowy Mountains Scheme.

The construction of the Tallowa Dam and the resulting Lake Yarrunga would have and did have a major impact upon the Kangaroo Valley Community including the displacement of many farmers in Bendeela.

Warwick Deacock called a meeting at Chakola on the 22nd July 1969 to form the Kangaroo Valley Conservation Society (KVCS). A prepared constitution was adopted and Warwick appointed President. The objective of the KVCS included:

• To make every effort to ensure the land and water of Kangaroo Valley are used with wisdom and foresight and that competing demands upon them are resolved in the long term best interests of the community.
• To foster conservation of distinctive vegetation and fauna and important natural and archaeological features of the valley.

Warwick wrote to the Metropolitan Water Sewerage and Drainage Board (MWS&DB), the NSW state government body having overall responsibility for the delivery of the Shoalhaven Water Scheme, asking about the recreational use of Lake Yarrunga accessed from Chakola.

The reply of August 1969 included “I have to advise that the recreational use of waters that will be impounded in the Shoalhaven Water Scheme has received further consideration but no decision has yet been reached” and “if the current restrictive policy is relaxed, present thinking is that it could take the form of allowing surface use of the water, such as canoeing etc., but not swimming”.

Warwick wrote letters to Australian Conservation Society, other local conservation societies, National Parks and Wildlife (managers of Morton National Park), MWS&DB, CSIRO, The Council of the Shire of Shoalhaven, etc seeking educational material in effort to unify the differing interests of recreational activities and farming in Kangaroo Valley.

At meetings in Kangaroo Valley presentations were made from the Shoalhaven Water Scheme, National Parks and Wildlife and conservation societies about the impact of the Shoalhaven Scheme upon Kangaroo Valley. In October 1970 the question of “whether or not the public should be granted right of access to Morton National Park once the dam is completed” still remained.

At the end of October 1970 the KVCS wrote to the MWS&DB and to other authorities including the following KVCS motion passed at a meeting on the 23rd October.

“The Kangaroo Valley Conservation Society believes that in view of the increasing population pressures to be exerted from the A.C.T., Wollongong and the South Coast, it is in the best long term interest that the people of Kangaroo Valley and of N.S.W. that the waters of Lake Yarrunga to be formed by the creation of Tallowa Dam in 1975 should be available for public recreation. This point of view is reinforced further in the fact that a large part of the catchment is a National Park and that the catchment contains considerable human settlement which is unlikely to be removed and we believe this should set a precedent in liberalization on land use policy.”

Mr Jack Beale, Member for South Coast and Minister for Conservation replied acknowledging the receipt of the motion passed by the KVCS and has taken the matter up with the MWS&DB.

The MWS&DB acknowledged the letter. The Minister Assisting the Minister for Trade and Industry in Tourist Activities wrote back suggesting writing to the NSW Minister for Tourism, the Hon. E. A. Willis for his consideration.

The Illawarra Natural History Society replied agreeing with some passive activities but disagreeing with activities such as speed boats and water skiing because of the detrimental effects upon wildlife and natural environment.

The Council for the Shire of Shoalhaven responds on the 30th November 1970; “Council at its meeting of the 23rd instant, received with interest the resolution of your Society regarding the use of the waters of Lake Yarrunga, and wishes to advise that it supports the move by the Kangaroo Valle conservation Society for the use of the proposed Lake Yarrunga for recreational activities.”

The MWS&DB reply included “that it should be possible for a firm decision to be made on the future recreational use of Lake Yarrunga by about 1980.

By late November 1970 there is no likely outcome as to whether recreational activities will be allowed and it seems that no decision will be made until 1980.

On the 18th December 1970 the National Parks and Wild write: “In general, the constitution and aims of your organisation, as expressed in the last part of your Newsletter No. 3, are in agreement with the policy of the National Parks and Wildlife Service, and the Service’s support for controlled recreational use of impounded waters can be expected.”

The Hon E. A. Willis, Minister for Tourism, writes “….I would like to therefore consider the problem more carefully before replying to your specific proposal.”

On the 3rd July 1978 the MWS&DB write to the KVCS that “… facilities are now available and the Board is pleased to advise that Tallowa Dam has been open for public inspection since the evening of Friday, 9th June, 1978. In addition, toilet facilities are now available for picnickers who may wish to visit the Bendeela area, where access can be gained to the Kangaroo River upstream of Bendeela Pumping Station.”

Warwick Deacock had visualized the potential of Lake Yarrunga and surrounding catchment as being suitable for recreational purposes and fought for his vision.

The above is a small part of the work of the Kangaroo Valley Conservation Society. Records from the KVCS are kept at the Kangaroo Valley Historical Society.

An accident during the construction of the Scheme required urgent medical attention. The decision was made that an Ambulance station was required in Kangaroo Valley owing to the time to get medical attention from either the highlands or Nowra. The ambulance service started then continues to function today.

The employees of the Citra and Leighton Construction performed volunteer work. Typical of this work was helping in the building of the Kangaroo Valley Swimming Pool in conjunction with the Apex Club and the relocation of the Selby Rock from Clinton Park to the Pioneer Museum grounds.

More than $1.5Million was spent on the construction and upgrading of roads to Tallowa Dam, Bendeela Camping Ground and Jacks Corner Road.

In 2011 a pipeline was built from Wingecarribee Reservoir to the Goulburn Water Treatment Plant to supplement Goulburn in times of drought. Now, water from the Shoalhaven Scheme could be pumped from Fitzroy Falls Reservoir to the Wingecarribee Reservoir and thence to Goulburn.