"It allows us to keep the overall progress on the project rolling forward whilst we work within the construction site of the reservoirs on appointing another major contractor to continue that work," council's director of infrastructure and engineering services, Rob Scott said.

A recommendation from MidCoast Council staff to proceed with the completion of the Gloucester Water Reservoirs and Mains Project using a hybrid delivery model was passed unanimously by councillors at the meeting.

Related: Gloucester water project on hold - contractor in liquidation

Work was around 50 per cent complete when the contract was terminated after the contractor, FB Contracting, went into liquidation.

The report tabled at the April council meeting recommended an alternative contractor undertake the majority of the works at the Cemetery Road Reservoir site and MidCoast Council undertake all other works, as well as managing "key elements of equipment supply" to the alternative contractor.

The report recommended that tenders be sought from the previous tenderers or associated entities for works exceeding $1 million.

As a result of the disruption caused by the liquidation of the contractor, the project is now expected to be completed in late 2023, 12 months longer than originally anticipated.

"This project has been on the books for over 10 years and it was really exciting once this was getting started," councillor Katheryn Smith said.

"This is unforeseen and I'm really confident in that staff that we've got and this option moving forward that it's going to get back on track again.

"I want to thank the staff for picking up the pieces on something that no-one wanted to happen, and I've got full confidence that this project is going to be fantastic.

"It's just a big speed hump that we've had to come across," Cr Smith said.