The ACT government has lodged a development application for works that would see five fire hydrants installed in a village of 13 houses, as well as extensive landscaping works on the banks of the Murrumbidgee River.

The proposed $950,000 development includes two in-ground concrete water tanks on the banks of the river south of the Tharwa Bridge, a pump-driven water main to a standpipe behind the village's general store and a truck turning area on Naas Road.

A brick shed housing the pumps is described as a "lookout" over the Murrumbidgee River in the development application, but residents of the village told The Canberra Times they had been told there would be no lookout constructed.

A spokesman for Transport Canberra and City Services said there was an opportunity to use the tops of the tanks as a lookout in the future.

The Tharwa Village Plan, which was released in September, said development in the village should "maintain the river corridor to the benefit of the environment, local community and visitors to Tharwa".

But residents said the water infrastructure would damage the river corridor, and storing diesel on the site for generators was an environmental hazard.

The development was inconsistent with the plan's principles and an upgrade to the current water system would better serve the community, residents said.

The directorate spokesman said the project would supply firefighting operations with water "when required" and the proposed shed was needed to house pump infrastructure securely.

"Non-potable water for firefighting will be accessible to tankers if there is disruption to power," he said.

"The necessary environmental protection measures will be in place to ensure the safe and secure storage of diesel."

At a meeting on January 17, the Tharwa Community Association agreed the proposal did not address the firefighting or water-supply needs of the village.

Residents expressed concern the site of the proposed development, off Naas Road south of the intersection with North Street and Tharwa Drive, would see drivers speed around the blind corner and risk crashing into slow-moving trucks pulling out from the site.

The directorate spokesman said the development application met Australian standards for vehicle safety and an independent assessment had determined the project was unlikely to make a "significant adverse environmental impact".

A submission from the residents' association said better value for money would be achieved by upgrading the current, community-owned water supply and village firefighting infrastructure.

"The community does not support the development of a stand-alone water supply capability that is only for the filling of fire engines in emergency situations," the submission said.

Local farmer Michael Lonergan said pumping water uphill from tanks to a dead-end pipe was "ridiculous" and the proposed development did not take the experience of the 2003 bushfires into account.

"It ignores the concept of gravity which can be utilised – and virtually always is – by storing water at available higher levels," he said.

"Gravity is not affected by fuel shortages or power blackouts – it is there 24/7."

A spokeswoman for the Emergency Services Agency said the system would serve bushfire and urban firefighting units, and a gravity-fed system would not provide the necessary flow.

"The tanks and pump are connected directly to the hydrant system which will keep them primed and pressurised ready for immediate use," she said.

Furniture designer and craftsman Myles Gostelow, who helped defend the village in the January 2003 fires, said that the first thing to go in a bushfire would be power, making the proposed water supply unsuited to fighting bushfires.

"For every truck they can fill up from their hydrants, more houses are going to be saved by people having good water pressure in their hose," he said.

Karim Haddad, who runs the Tharwa Valley Forge and owns Cuppacumbalong Homestead, said the development would destroy the area near the river.

"It's going to eat up a large part of the village green and a large part of the community space that's there," he said.

"This is a huge overkill that ignores the master plan."

The president of the Tharwa Community Association, Kevin Jeffery, took over the village store after his father, long-time Tharwa advocate Val Jeffery, died in 2017. He said the ACT government often did not understand the needs of Tharwa, and the flaws in the development application reinforced his view that this was the case.

The association's submission to the development application said there had been insufficient consultation regarding the new water supply and that better outcomes for the village could be achieved by spending less money.

The 2016-17 and 2017-18 ACT budgets provided more than $1.4 million dollars for a water system that would pump non-potable water from the Murrumbidgee River to Tharwa for firefighting.

The community-run water supply, which provides river water to households for garden maintenance, is pumped to a tank on private land behind the village store and is gravity-fed through a network of ageing galvanised pipes.

Water-supply issues have plagued the village since the 1980s, when a National Capital Development Commission report found the water system, then owned and operated by Val Jeffery, was nearing the end of its life.

Kevin Jeffery said he had been told by ACT government representatives that no funding was available to replace this system, which has been patched and maintained by the Tharwa community since the commission's report, because the ACT government wouldn't build infrastructure on privately owned land.

Tharwa residents collect rain water for drinking or buy water that's trucked into the village to top up supplies.

The public comment period for the development application closed on Thursday, January 31.