The Mid-Western Region will join the Wellington and Warrumbungle Shires to prepare a joint submission on Cobbora once the environmental assessment is released.

Mid-Western Region general manager Warwick Bennett told ABC all three councils share the same concerns and will be expressing their views forcefully to the state government.

“The main issue that we're concerned about is water, the use of water, the transferring of water licences etcetera and ensuring that the amount of water that Cobbora does use does not have a significant effect on other industries and people within our respective communities,” he said.

“We all have very similar issues with the coal mining application and so rather than duplicating a report three times at three times the cost, we can all work together for a constructive and positive response to such an application.”

The government’s decision to develop Cobbora and supply discounted coal to privatised power generators has been roundly condemned by the opposition, green groups and industry figures, who question how the government will manage the mine after pulling out of coal mining eight years ago when Powercoal sold its coal mines to Centennial Coal.

State-owned utilities Macquarie Generation, Delta Electricity and Eraring Energy have formed an unincorporated joint venture called CCP Holdings to back the project.

The state government will seek to mine 30 million tonnes per annum of raw coal and produce 20Mtpa of product coal from Cobbora. Open cut mining is slated to start in 2013 for a life of 21 years.

NSW treasurer Eric Roozendaal is pushing ahead with the power asset privatisation – which is seeking to raise $8 billion – after negotiations with Whitehaven Coal to develop Cobbora collapsed over the price of coal.

It is now estimated that the discount price the NSW government will offer for coal from Cobbora would be $35 per tonne, effectively a taxpayer funded $1 billion discount over a 17- year life of contract to the generators.

Councils are also questioning the impact of drawing water from the Cudgegong River on the local economy.

Mid-west regional councillors said CCP Holdings had applied to build a pump station at the river that could threaten the area’s water security, tourism and rural industries.

CCP Holdings’ application to the NSW Office of Water includes two 385mm axial flow pumps, each capable of pumping 336 litres of water a second – enabling it to pump 2 gigalitres of water a year from the river, half of the project’s yearly requirements.

Some councillors believe the 2GL of water CCP Holdings proposed to pump equalled the water allocation for the entire Mudgee township.

CCP Holdings is proposing to process the coal through one 20Mtpa coal-handling and preparation plant and also seek approval for two water pipelines and a 25km rail spur line.

In its preliminary environmental assessment, consultancy Environmental Resources Management Australia estimated the Cobbora mine will need 4GL a year for dust suppression and to operate the CHPP.