MidCoast Council is counting the cost after 1.7 kilometres of pipeline for the proposed temporary desalination plant at Nabiac was vandalised during the weekend.
According to a spokesperson, the repair bill is unknown at this stage, and council is weighing up its options on whether to repair or replace the damaged pipe.
The damage, which occurred between Saturday and Sunday, included a number of small holes drilled into a long section of the specially manufactured pipeline.
"While council will be working through this issue with the contractor and insurers, it will result in a delay to the vital project," the spokesperson said.
"This will place pressure on the delivering of MidCoast Council's drought response plan and the security of the water supply for the entire Manning and Great Lakes area."
NSW Police is undertaking an investigation into the matter and council won't comment further.
The propose plant will be located in the Wallamba River near Darawank.
Manning Great Lakes Police District has appealed for witnesses after a near two kilometre section of pipeline was damaged at the site of a temporary desalination project at Nabiac.
About 2pm on Monday, January 13, contractors noticed a large number of small holes drilled along the pipeline near the Nabiac Aquifer site on Elliots Road.
Officers attended and began an investigation.
It is estimated the damage will cost in excess of $150,000 to repair.
It's believed the damage occurred between Sunday night and Monday morning.
Anyone who may have seen or heard anything suspicious in the area during this time or may have information which could assist detectives is urged to contact Crime Stoppers on 1800 333 000.