Upgrade works on the reservoir at Rockmount near Miltown Malbay are expected to be completed by the middle of next year.
It follows the replacement of the water main between Mullagh and Miltown earlier this year, with the area having experienced frequent disruption to supply in recent times.
Preliminary works at the West Clare site are already underway, with the reservoir set to be operational by the autumn of 2022.
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Clare Independent TD Michael McNamara, who received confirmation of the news from Irish Water, says the reservoir will act as a back up for the town and surrounding areas.
