The update came after Swansea MP Yasmin Catley called on the NSW government to get on with the work, a year after funding was confirmed.

The government said in December the work was a priority and would start in the new year, but has now confirmed a contractor is still yet to be appointed.

Transport for NSW Maritime did not answer why the project had been delayed, but that it was "working as quickly as possible" to complete investigations and approvals before awarding a contract.

A Review of Environmental Factors will go on display for the community to have their say.

Transport is aiming to publish the review next month and finalise it in September before work starts.

Ms Catley said the work was "well and truly overdue".

"A year has now passed and the only entry and exit point into the largest salt water lake in the Southern Hemisphere remains un-dredged," Ms Catley said.

"Swansea Channel is in a dire state and local and visiting boaties are unable to travel through the Lake for recreation and boating events, which hinders our region's economy.

"It is time for the Government to deliver this crucial dredging program."

Ms Catley said the situation had affected the success of local sailing events like the Heaven Can Wait Charity Sailing Regatta, which took place in February.

Toronto Royal Motor Yacht Club vice commodore Mel Steiner said the lack of dredging had affected its Heaven Can Wait Charity Sailing Regatta as large vessel operators are not even trying to enter the lake due to the risk of becoming grounded.

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